UK managers forced to take pay cuts as virus put business on hold

Just under one-fifth of senior UK managers took pay cuts during the coronavirus pandemic and almost half said business had suffered as companies were forced to put operations on hold.

A poll of almost 2,000 members of the Chartered Management Institute on behalf of the Financial Times showed companies were gradually beginning to restart operations as lockdown restrictions were eased. 

However, many warned they were far from restoring normal operations, including a widespread return to offices or international travel, and Brexit was again on the radar for companies as they set out plans for the rest of the year.

Almost all companies in the survey had asked employees to work from home during the pandemic, according to the CMI, and one in five said none of their staff had yet returned. The majority of people polled by the CMI work in larger businesses, and more than 40 per cent work in public sector organisations.

More than one-third said they had started to bring workers back to offices and a similar proportion said they would do so before the end of the year. The slow return of mainly office-based workers will undermine efforts by ministers to encourage people to relinquish homeworking to support city centres and high streets.

One-fifth reported having to make redundancies and just under the same proportion said their organisation’s senior leaders had taken pay cuts as a result of Covid-19.

Almost half of organisations said that trading had been affected by Covid-19, with the vast majority of those saying parts of the company had ceased trading temporarily. Over two-fifths of those where business had been affected said trading had still not returned to normal. 

Ann Francke, CMI chief executive, said that despite support schemes rolled out by Rishi Sunak, the chancellor, to protect UK companies, “more job cuts are expected as these lifelines come to an end”. 

Close to 40 per cent of managers reported that their organisation had used Covid-19 support packages, the furlough scheme being the most common.

She added: “With the country facing mass unemployment and hiring freezes, businesses should explore pay cuts for high earners, shorter hours and other innovative measures to retain staff. Redundancies should be a last resort.”

Given continued disruption at airports, half of managers whose staff travelled internationally before the pandemic did not know when they would resume overseas trips for their business. More than four-fifths said their organisations had suspended international travel, and only one in 10 said they had resumed overseas business trips.

More than 60 per cent of managers said their organisation had an operating plan for when the UK severs its ties with the EU in 2021 at the end of the transition period. Almost three-quarters of these said plans covered how operations might continue if the two sides failed to agree a trade deal.

The top issues cited were delays in the supply chain and additional trading costs — which worried more than half of managers — followed by the impact on staff from Europe. One in 10 did not have a plan for next year.

Source Article

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