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The new #JobSupportScheme is only good for people earning less than the #LivingWage. Allow me to show you some maths that prove it.
Employee earns the living wage (£9.30ph) and works 40hr/wk. Their hours are reduced to 33%. They are kept on until January.
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Employee earns the living wage (£9.30ph) and works 40hr/wk. Their hours are reduced to 33%. They are kept on until January.
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Normally Employee earns £1612pm. Working 57.25hrs per week they now earn:
57.25hrs * £9.30 = £532.43
They didn't work 116.33hrs. Of this:
1/3 is paid by employer: £360.01
1/3 is paid by gov't grant: £360.01.
Employee is paid £1252.45
Employee earns £15.59ph, but loses £359.55
57.25hrs * £9.30 = £532.43
They didn't work 116.33hrs. Of this:
1/3 is paid by employer: £360.01
1/3 is paid by gov't grant: £360.01.
Employee is paid £1252.45
Employee earns £15.59ph, but loses £359.55
The cost to the company of this employee working 33% of hours is £892.44pm.
Over three months that totals £2677.32.
But they get the #JobRetentionBonus for keeping the previouslyt furloughed employee on until January, so they get £1000 from the gov't.
Now the cost is £1677.32
Over three months that totals £2677.32.
But they get the #JobRetentionBonus for keeping the previouslyt furloughed employee on until January, so they get £1000 from the gov't.
Now the cost is £1677.32
On a normal month, the company pays the employee £9.30 an hour.
But at 57.25 hr/m for three months with a cost of £1677.32, the hourly cost of the employee is £9.77/hr.
And this is the best case scenario!
But at 57.25 hr/m for three months with a cost of £1677.32, the hourly cost of the employee is £9.77/hr.
And this is the best case scenario!
The #JobRetentionBonus will not pay for the company costs of keeping a full time employee on the Living Wage at 33% of normal hours for three months.
If you make more than the #LivingWage, then it is unlikely that the #JRB will cover the costs imposed by the #JobSupportScheme.
If you make more than the #LivingWage, then it is unlikely that the #JRB will cover the costs imposed by the #JobSupportScheme.
So the #JobSupportScheme is basically a bonus to employees where employer payments are matched by the gov't.
Where is the company impetus to just give employees money? They could just offer a change of contract to reduce hours.
Cost of training!
Where is the company impetus to just give employees money? They could just offer a change of contract to reduce hours.
Cost of training!
Every job has a training and induction period. (Not to mention job recruitment costs.)
Let's say that a job ad costs £100 for this employee's job, and training takes 16 hours. That works out to a training/recruitment cost of £248.80.
Let's say that a job ad costs £100 for this employee's job, and training takes 16 hours. That works out to a training/recruitment cost of £248.80.
We worked out that the employee cost to the company was £9.77ph, compared to usual £9.30ph.
£0.47 * 171.75 total hrs worked = £80.04 extra cost of keeping same employee until January.
Compared to a £248.80 cost of a new employee, this is £168.74 cheaper.
£0.47 * 171.75 total hrs worked = £80.04 extra cost of keeping same employee until January.
Compared to a £248.80 cost of a new employee, this is £168.74 cheaper.
But it has always (almost) always been cheaper to keep a fully trained employee than sack them and hire a new one, and that hasn't stopped redundancies before.
If @RishiSunak is hoping to reduce unemployment figures, I doubt this will help.
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If @RishiSunak is hoping to reduce unemployment figures, I doubt this will help.
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