The job retention scheme, or furlough, has amounted to an astronomical cost to the government with the second furlough at approximately £6 billion per month, £200,000 per day and a total of £41.4 billion as at 18 October 2020 to the economy (figures from HMRC). Let us also not forget the staggering human cost that both furlough and redundancies have had across the employment industries.
The Human Cost
The following graph shows the number of employees furloughed from the start of the scheme, through to mid-October, the numbers have levelled out at 9.6 million.
When someone is furloughed this raises a number of concerns about the future security of their job. Will their job still be available to them once the furlough period ends? Will their employer invest in and employ new technology that will ultimately make them redundant?
The next graph depicts the number of furloughed employees who are retained after furlough. We can see a gradual decrease in employee retention as time passes.
What are the implications for the Real Estate sector?
In the real estate sector, the furlough take up is greater than average, so a bigger percentage of real estate professionals are on furlough compared to other professions.
The line graph shows the trend of furlough take up in the real estate profession, topping out at almost 150,000 real estate workers on furlough in May during lockdown 1. The step effect you can see is in line with payroll month ends, so a cohort of employees are taken back on for the start of a new month. The statistics are not yet out for the lockdown 2 but we can expect to see another jump up.
Furlough by Age & Employer size
Whilst there are many trends to the furlough statistics, the statistics shared here focus on furlough by employer size and by age.
The graph below shows the correlation between employer size and the percentage of firms taking up furlough, this is represented by the bars, orange shows the percentage of firms of differing sizes eligible for furlough and the blue bars are the percentage who have utilised the scheme. 25% of single employee firms took up the chance to furlough, in essence closing their business for the period, 43% of those employing 2-4 staff furloughed at least one of their employees. The bigger firms furloughed higher percentages of employees. They will have seen a drop in work and could spread it out among fewer staff and furlough the rest, this is much less achievable with a small workforce, where it is likely each employee has different specialisms.
This next chart shows that it is older employees who are more likely to have been furloughed, although this could in part be down to the fact that they make up a larger percentage of the workforce to start with. Another factor could be a resistance or less ability to learn the technology that makes home working possible.
The Problem of Furlough
Whilst on Furlough, employees get at least 80% of their salary, but this potential drop in income is not the only issue.
The stress of being uncertain if you will be retained after furlough can hit hard, and if you are an APC candidate, the ability to gain experience in all the required fields such as inspection becomes impossible during lockdown. The most recent APC cohort has seen the highest level of referrals ever, the lack of experience, stress of furlough and pressure of homeworking is highlighted by this.
Psychological impacts are immense. Feelings of loss of purpose, lack of routine and loss of connection all play a part. If you are used to working and engaging with a large team, a disconnection can create a loss of creativity and team camaraderie.
Employment is seen as a key driver of wellbeing, providing purpose, identity, financial security and routine.
Cambridge Finances Helping Hand
Cambridge Finance understands the many uncertainties surrounding furlough and we want to play a part to tackle this ongoing problem. We are therefore offering those affected a 30% discount on our upcoming course: ‘Understanding Commercial Property Valuation.’
This offer is strictly limited to those on a) furlough, b) who have been made redundant or c) are APC candidates. We will require proof of one of these statuses prior to booking, and any bookings must be made between 23rd and 27th November 2020.
Understanding Commercial Property Valuation will take place 7th-11th December over 4 sessions. We are offering you this course at a discounted cost of £696.50 over the full price of £995. This is truly a great opportunity for those looking to learn new skills, or a refresher course to get you geared for 2021.
Statistics taken from HMRC – https://www.gov.uk/government/collections/hmrc-coronavirus-covid-19-statistics