To furlough, or not furlough?

Agency leaders are divided over whether to take advantage of the government’s Job Retention Scheme unless it is urgently required. Has the idea of furloughing staff become too stigmatised?

More than 140,000 companies applied to the Government’s Coronavirus Job Retention Scheme on its first day of operation.

In recent weeks, several agencies – and particularly larger holding groups (Omnicom, WPP, Publicis Groupe and M&C Saatchi, to name a few) – have announced their intention to place staff on furlough and make other cuts where necessary to keep businesses afloat. 

Many smaller comms agencies are also eyeballing the government assistance, particularly those specialising in hard-hit industries such as tourism, travel and hospitality.

One of these businesses is PRWeek’s International Agency of the Year, Manifest Group.

In an honest op-ed, founder and group chief executive Alex Myers spelled out the reasons why one of the more successful PR agencies of the past year has had to place “a minority” of the Manifest team on Furlough, including junior campaign executive Rosie Humphrey (see below).

This includes securing the future of all employee’s jobs, preserving the integrity of its long-term business vision and being as flexible as it can to support its clients during the crisis.

Myers points out that Manifest has already lost 40 per cent of its expected income between March and July due to the coronavirus crisis.

He said the decision to furlough is not a sign that Manifest is struggling, but more a pragmatic decision to ensure the long-term integrity of the business. In addition, the agency has cut discretionary costs, made “operational efficiencies” and maximised revenue opportunities through service diversification.

Myers raised an interesting point about ‘furloughing’ becoming stigmatised and how this is “bravado” is potentially damaging to the long-term prospects of British business.

“When I’ve discussed this subject with friends and colleagues (in the now familiar Zoomiverse), there appears to be a belief that admitting staff are on furlough is somehow an admission that you are ‘struggling’,” he said. 

“I’ve even seen business owners publicly declare ‘taking the hit’ despite their staff not being able to do their jobs, as if that’s a badge of honour. In reality, it will be their employees that will need to make up the deficit in the future, and those statements form a dangerous contribution to a stigma that has no positive value to British business.”

PRWeek approached other business leaders to find out whether they would also furlough, and if not, why.

Matt de Leon, managing director at food and drink specialists Richmond & Towers, said: “It’s all too easy to criticise the Government for mistakes they’ve made during this crisis, but we should also be applauding what they’ve done well, and the Job Retention Scheme is one example.

“Some [of our clients] are struggling though, and have cut budgets quite extensively, the result of which is that we’ve had to furlough a small number of colleagues who were working on those accounts. However, we made the decision to top up salaries, so all furloughed staff are still receiving their full amount. 

“Transparency has been key in making these decisions, and as the UK’s first 100 per cent employee-owned PR agency, they were made with the backing of the whole team.”

More than 140,000 businesses applied for Rishi Sunak's furloughing scheme in the first day. (Photo: Getty Images)

Furloughing: 'not about margins'

Creative comms agency Dont Cry Wolf has decided not to furlough staff at this stage.

Founder John Brown told PRWeek it isn’t the case that the agency is afraid of furloughing.

“The question is, is there enough work for everyone? If the answer is yes, then we don't use the furlough scheme. It may change in a week, but we keep an eye on it, and that staff/revenue equation gets looked-at each week,” he said.

“What's critical is that the scheme is not used as a way of squeezing more out of fewer people in a bid to bank cash. It should be there to relieve disruption, not increase margin. 

“All that will lead to is burnout, and just when you need to nurture resilience and strong mental health in a team, you'll be left with exhausted staff, pissed-off clients and a lack of options.”

It’s a sentiment shared by digital PR agency Bottle, which has reported delayed campaigns and a reduction in retained income since mid-March.

The agency has decided not to furlough, but streamlined its operations were possible, and placed all of its staff on 80 per cent salary from April.

“We decided against furloughing – this isn't a stigma thing, but it wrestles uncomfortably with a unity, in-it-together approach for us,” managing director Natasha Hill said.

“Some clients have cut back and some are busier than ever and getting great results. In the same period we've also won three pitches, so furloughing wasn't really an option. 

Hill said her team has been “super-resilient”, and found “creative ways to work smarter at home and staying motivated”. 

She added: “The hardest part is the unknown; you can't plan for that, so we’re just working on the things we can change today. And next month could bring another set of challenges."

While some agencies have been open enough to share their views on furloughing, a majority treat the topic with sensitivity and caution, particularly for fear of causing distress to their affected staff.

Should furloughing be viewed as a fallow period, such as that often used to regenerate farmland? (Photo: Getty Images)

‘The fallow period we need’

But should furloughing only be viewed as a negative for those involved?

Junior campaign executive Rosie Humphrey does not think so. She is one of the Manifest staff placed on furlough and has written extensively about the first few weeks.

Humphrey believes the furlough period could be the fallow period the ‘always-on’ industry needs to regenerate from a burnout culture in which “you are congratulated for the bones that you break and only then are you permitted to enjoy a holiday because you’ve earned it”.

“Rest is treated like the protective buffer between full-blown exhaustion and turning up for work on Monday, when in reality we should factor this period into the daily grind, even if we don’t think we need it,” she said.

Much as farmland needs a fallow period to allow it to regenerate, Humphrey contends: “Maybe this is the wake-up call that, for the most productive, creative and, more importantly, sustainable mindset, we all need the fallow.”

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