Budget 2021: what it means for your business

On an important milestone for the UK’s financial recovery from the Covid-19 pandemic, Rishi Sunak announced the new Budget for 2021 last night, with the Office for Budget Responsibility expecting the economy to reach its pre-Covid level by the middle of next year – six months earlier than previously thought.

So, what does this mean for your business? Commenting on the latest announcement, INTOO UK and Ireland’s Managing Director Owen Morgan said:

“With the Chancellors announcement that the furlough scheme will now run to the end of September 2021, the immediate threat of mass redundancies has receded. That is good news for those who are receiving furlough support however it may not be the salvation that it appears. Furloughed workers returning to their place of work in October 2021 may well, in some cases, have been in receipt of government support for almost 18 months – that’s an awfully long time to be away from the workplace and will have provided ample opportunity to reflect on future career direction. Equally, what they return to will likely be very different to where they left off in early 2020.

Employing organisations will need to map out very clearly how they bring individuals back into the workplace –  and on what terms. Have roles changed during that period and if so, how? What has happened to career-paths and succession plans over recent months? Will people be given the option of home-working? Have the skills requirements for certain sectors or industries shifted?  All  of these questions, and many more, will play upon employees minds. And with the Chancellor expecting a more positive economic bounce-back than previously envisaged, employers may need to be prepared for a significant degree of churn amongst their workforce once furlough support ceases. Workers may return however unless organisations can match their career-development aspirations many may well look to quickly move elsewhere in pursuit of improved developmental or financial reward as 18 months of pent-up ‘demand’ is suddenly released. Corporate leadership also will be under the microscope as people will start to give their verdict on how they feel they have been treated during the lockdown period – it’s certain that some organisations and leaders will be found wanting.

Employers can mitigate against some of these outcomes by ensuring that career-planning is clear and that line managers engage with workers in a positive and realistic way with respect to development opportunities – career-development support is already starting to be deployed to address these issues. Leaders too, may well look forward to having people back in the office and getting the company re-orientated towards the future, however, as always, unless they are able to create a compelling proposition as to why people should stay and work for their company, it’s likely that the furlough monies will have provided artificial life-support for jobs but relatively little else by way of employment continuity.”