The travel industry is on course to be one of the most impacted sectors in the wake of Covid-19. As lockdowns grounded airlines and quarantines kept people indoors, travel firms were forced to shut.
Now, with furlough schemes coming to a swift end in October, the sector is likely to face some even tougher decisions — and many will likely turn to workforce cuts. Fortunately, there are several alternatives travel companies can take before heading down the road to redundancy.
According to The Chartered Institute of Personnel and Development (CIPD), 4 million redundancies were avoided via the furlough scheme — a positive that could come entirely undone at the end of October. As the UK comes out of lockdown and some semblance of normality resumes, the government intends to discontinue the furlough scheme. As a consequence, CIPD estimates that over a third of UK businesses will make redundancies in Q3.
This is likely to resonate within the travel sector. With 9.4 million jobs being placed on furlough so far, the travel and accommodation industry has the highest take-up rate of the furlough scheme — with 87% of employers in this sector furloughing at least one employee. As soon as the job retention scheme is severed, job cuts will surely follow.
The sad truth is that, with workforce cuts saving an estimated 25% annually, it’s no surprise redundancy is such a popular option. However, organisations need to tread extremely carefully before making cuts. Mass redundancy is always a sensitive matter, but this time around, it’s far more delicate.
With unemployment at a decade high, no one is looking favourably on redundancy — no matter the circumstances. As such, company action plans will be scrutinised like never before. If redundancy is chosen without the appropriate due diligence, reputational damages could ensue.
But what are the alternatives?
Reduced hours, reduced pay and buying holidays
One popular measure is a reduction in work hours and a proportionate reduction in pay.
A four-day work week has been floated as a practical alternative to the typical 9-5 for decades. And while it could help mitigate redundancy, it may also increase productivity and employee satisfaction. Last year, the Japanese subsidiary of the major tech firm Microsoft implemented a four-day work week, finding that with a 20% reduction in working hours, productivity skyrocketed by 40%, and employees took 25% less time off. Moreover, electricity usage fell by 23% — further sparing the company’s bottom line.
With additional pressure on those needing to tackle childcare, flexibility in working hours is likely to come as a welcome choice.
In Australia, this method is already taking off. Back in May, Flight Centre, one of the largest retailers of travel down under, advised staff to take one less working day per week and a pay cut.
More recently, and slightly closer to home, staff at Durham University in the UK opted to reduce their pay and working hours voluntarily.
Interestingly, both Flight Centre and Durham University urged staff to take, and even buy, extra holiday as another alternative to redundancy.
Buying annual leave is a relatively modern concoction, which may help to buy time before considering redundancies. The approach works similarly to voluntary sabbatical, only unpaid, and for a shorter period.
Much like a four-day work week, employees are offered additional annual leave in return for a reduction in pay. However, it differs from the previous alternative as it allows for more choice and control. Rather than a predetermined day off per week, employees can pick and choose the dates — providing greater flexibility. The leave is unpaid, with the cost docked from the employee’s salary.
This method could be particularly beneficial within the travel industry. With lockdown easing and the UK’s quarantine exemption list published, travel is slowly coming back on the agenda. As such, prolonging redundancies until such a time where a company can function, could make a world of difference in salvaging jobs.
Reskilling and reassignment
Some employers may be able to reskill staff and reassign them elsewhere within the organisation. Not only can this alternative reduce the need for redundancy, but it can help bolster parts of the company that are lacking, which is particularly valuable during a recruitment freeze.
For travel businesses, this could include reskilling and redeploying some personnel to customer services, an area likely to be inundated with queries, especially in the coming months.
Some travel companies have even redeployed workers to entirely new positions outside of the industry.
It was recently revealed that the UK’s largest independent travel agency, Hays Travel, was subcontracted to provide support for the NHS’ coronavirus Test and Trace programme.
Another, slightly more extreme example of travel sector redeployment, was witnessed in late March. Volunteering cabin crew from Virgin Atlantic and easyJet were retrained and reassigned to support NHS staff at the newly constructed Nightingale Hospital. With a firm footing in administering first aid, flight attendants were seen as a sound choice to help bolster staffing requirements.
Data-guided perspective
While any or all of these alternatives could help reduce redundancy, it’s imperative, for both staff and the organisation, that none are taken lightly. Every business is different, and without a comprehensive understanding of real-time reward data, organisations remain unaware of the real impacts of these cost-saving strategies.
One way of shoring up response plans is to engage these methods in a simulation or wargame before application. Wargames enables companies to test out radical ideas and evaluate their impact in a safe environment, without risking resources or facing reputational damage.
With normality slowly resuming, it’s unlikely these measures will need to stay in place for too long. Delaying may be all that’s required for the travel sector to get back on its feet. Thankfully, with the appropriate data and preliminary testing, these measures could buy all the time the industry needs to avoid redundancy altogether.
Ken Charman is chief exeutive of uFlexReward, a global HR and rewards data platform, developed for and used by Unilever.
Dr Susie Holdsworth PhD – is a scientist with a background in health.
The pair worked together for four years at Kings College London as visiting senior research fellows in the Department of War Studies developing wargames to test strategy for global business, governments and agencies.