COVID‐19 and the uncertain future of HRM: Furlough, job retention and reform – Stuart – –


Abbreviations

  • CIPD
  • Chartered Institute for Personnel and Development
  • CJRS
  • Coronavirus Job Retention Scheme
  • GFC
  • Global Financial Crisis
  • HPWS
  • high performance work systems
  • HRM
  • Human Resource Management
  • HMRC
  • Her Majesty’s Revenue and Customs
  • OBR
  • Office for Budget Responsibility
  • OECD
  • Organisation for Economic Co-operation and Development
  • ONS
  • Office for National Statistics
  • STC
  • short time compensation
  • STW
  • short time work
  • UK
  • United Kingdom
  • 1 INTRODUCTION

    This article argues that, in response to the COVID-19 crisis, job retention should be seen as a central aim and practice of HRM, rather than simply an outcome variable. Governments in many countries have sought to protect those in work in the face of lockdown of economy and society through job retention schemes. According to the OECD, by May 2020 as many as 50 million jobs globally were being supported by job retention schemes, a tenfold increase compared to the Global Financial Crisis (GFC) of 2007/08 (Scarpetta et al., 2020). In the UK, 11.5 million jobs have been furloughed under the auspices of the Coronavirus Job Retention Scheme (CJRS) (ONS, 2021). Unlike schemes in many other countries, such as Germany and France, that extend and adapt existing provisions, the CJRS represents a novel departure from the typical, liberal market response to crisis and potentially challenges the dominant hard, ‘calculative’ approach to HRM adopted by many UK firms (Cregan et al., 2021). In contrast to previous crises in the UK, where employment fell in step with lower output, furloughing has helped to maintain people in jobs: firms have retained workers as opposed to making them redundant. Taking the UK case as a point of focus, the article argues that this ‘turn to job retention’ offers important insights for both the theory and practice of HRM.

    Practitioner Notes

    What is known about the subject matter?

    • The COVID-19 crisis presents a challenge, and potential opportunity for human resource management (HRM), with a large number of workers furloughed around the world.

    • The UK government has sought to protect (up to 11.5 million) jobs through the crisis via the Coronavirus Job Retention Scheme (CJRS).

    • The CJRS is a temporary intervention: when state-support for furlough ends there is a danger that firms will quickly look to make workers redundant.

    • Furlough is not well-established in the UK compared to other countries, with the longer-term practice of job retention constrained by challenges around job security, good work and worker voice.

    What does the article add?

    • The article makes the case for job retention as a key practice of HRM, rather than as an outcome.

    • It details the context of the CJRS, explains how it represents a novel intervention in the UK’s market-based system of employment and situates it as a case comparatively.

    • It considers the benefits of job retention through a novel synthesis of the literature on strategic HR planning and the economics of labour hoarding.

    • The article argues the COVID-19 crisis prompts cause for reflection on the renewal of HRM, with job retention as a central priority.

    Implications for practitioners

    • Job retention should be considered a core practice of HRM.

    • As a practice of HRM, job retention should be seen as a central element of a wider investment-based approach to people management that promotes job security, good work and worker voice.

    • HRM practitioners should look to develop job retention strategies in partnership with wider stakeholders, as part of a renewal of HRM that looks to accommodate interests beyond immediate shareholder interests.

    The UK case is instructive for two reasons. First, with no history of furloughing within UK firms, the CJRS offers insight into how furloughing can potentially shift expectations and norms around retention management. Secondly, as a paradigmatic example of ‘market-led’ restructuring (Bergström, 2019; Gazier, 2008), the UK has a history of using redundancy as the default mechanism for dealing with crises. The introduction of furloughing is thus useful in showing how alternative responses to crisis can emerge, including those that mean firms hold on to workers in the face of crisis. Situating the UK case within a more comparative context, we use the example of furloughing to show how job retention can yield benefits to firms as well as workers.

    In this context, we argue that the current crisis provides scholars with the opportunity to reflect on established HRM approaches as well as future directions for research. Specifically, we argue that an…



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