Covid: A Corporate Tale
“When one gets in bed with government, one must expect the diseases it spreads.”
― Ron Paul
A man and a woman from West Yorkshire, England, were recently arrested in connection with a suspected £3.4 million fraud under the Coronavirus Job Retention Scheme, also known as ‘furlough’.
Regarding the arrests, the HMRC Protection Taskforce director said, “This is taxpayers’ money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.”
The UK’s furlough scheme is set to end in September of 2021. It was put in place to support those who were unable to work due to the restrictions placed on society during the pandemic, paying up to 80% of employees’ wages (to a maximimum of £2500 a month).
As of April this year, £61.3 billion has been claimed from the UK Government as part of the scheme, supporting over 11 million jobs. To put that into perspective, the furlough budgetary cost comes in higher than defence, transport, public order, and housing.
There can be little doubt, the scheme has saved many people’s jobs and kept people afloat as restrictions tightened, relaxed, and tightened again. However, where there’s free money, there is always corruption.
For some of the pandemic I have been working in senior management at a large company that has been catastrophically affected by the pandemic. The Furlough and Job Retention schemes kept a lot of its staff in jobs.
Sadly though, for clunking behemoths like this one, rather than encourage them to adapt and embrace efficiency, it has served more as a means to retain the status quo of bad practice, and management self-preservation.
This particular organisation, haemorrhaging cash as the threat of new ‘waves’ destroyed any hope of short term recovery, sought help to stay in business. As well as the government support, it also benefitted from shareholder loans, went through financial restructuring, and the inevitable ‘re-organisations’ to cut costs, resulting in mass redundancies.
Amidst the jettisoning of staff, and workers being kept at home and inactive for a year, virtually every senior manager stayed on, working 100% of the time, receiving full pay, despite the fact that for the vast majority, there is no one (and virtually nothing) to manage.
The reasons for this are both cynical and logical. They are never furloughed for two reasons; one is that when you are furloughed, in the corporate world you are often signalling that you are not essential. The second is, senior managers are the ones who decide who is and isn’t furloughed. It’s not fraud, but it doesn’t seem in the spirit of pulling together.
These senior managers, often earning more than twice as much as their subordinates, felt it was somehow fair to have multiple people with their hand touching the steering wheel, while no one was powering the engines.
When ‘flexi furlough’ was introduced in late 2020, for many it meant a kind of return to working reality, which allowed some employees to be brought back into businesses part time. Again though, it simply shone a light on the wild inefficiencies at play in many companies.
Several contacts at other organisations experienced scenarios where an employee is brought back to work for one day a week. One told me, “I do one day a week. That day is filled up with reading and replying to that week’s emails, attending a few calls talking about those emails, and all with very little context or ability to effect any change, and then I log off for the week.”
Which then begs the question, why do it? It barely benefits the employee, certainly not financially.
Sadly, at many organisations and companies at this time, there isn’t always a why. In a crisis, the headless chicken approach to leadership often takes hold, where it’s more important to ‘look busy’ than provide any value or progression.
Perhaps this is the issue with state pay-outs of this kind. They go to the business, and provide them with little incentive to use this time to modify practices, transform workforces, or think about the future. Instead they can engage in a massive exercise in job justification.
One doesn’t want to be ungrateful, or sweepingly judgemental; furlough has kept many of us ‘viable’ in jobs, and some companies will have behaved admirably to their staff.
Unfortunately though, it may also have enabled some to simply paper over the cracks of a fat, lazy, corporate colossus or two, frightened to take a look in the mirror or seize opportunities, instead pocketing taxpayer cash to merely stand still.
You can bet that if this were the company’s own money, there’d be a lot more accountability, thought, and explanation required.
Nationally there seems at times to be a collective disconnect from reality when it comes to furlough. The recognition that it is our money we’re handing over to companies, and we’ll have to pay it back at some point, seems to be a conversation we’re unable to have.
But with interest on our national debt repayments already at over £50 billion a year, that penny had better drop sharpish.
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