WHAT IT'S ALL ABOUT...
Immediately after the government’s Coronavirus Job Support Scheme was unveiled, MHR Analytics produced a ready-to-go planning model via our IBM Planning Analytics Salary & Compensation Accelerator module.
Right now, it means that users of the solution can already see the impact of the scheme on their payroll budget; they can plan, forecast and weigh up staff retention options with accuracy.
The instant rollout of this model demonstrates the ‘rapid response’ capabilities of IBM Planning Analytics in action. Whatever the future holds for organisations in terms of government intervention or internal budget requirements, the solution allows you to quickly create your own similar models, measure the impact, and adjust your plans accordingly.
On 24 September 2020, Chancellor Rishi Sunak announced that the existing furlough scheme would be replaced with a new Job Support Scheme (JSS). The scheme will continue for six months until 30 April 2021.
To be eligible for the scheme, an employee must have been on payroll on or before 23 September 2020. They must also work at least 33 percent of their usual hours to be eligible. For the actual hours worked, employers will be responsible for the normal contracted wage.
For hours not worked, responsibility for paying the employee is essentially shared between the government and the employer. The government will pay one-third of hours not worked, up to a maximum of £697.92 per month. This is reduced on a sliding scale the more hours an employee actually works.
Employers remain responsible for paying NI and pension contributions.
What is the planning challenge?
The scheme is primarily designed to make it more attractive to bring greater numbers of employees back after furlough. That said, the JSS can also be accessed to cover employees who have not previously used the furlough scheme.
Bearing in mind the impact on staffing budgets, key questions to ask are likely to include the following:
Who should we bring back to work?
What level of hours should staff be allotted, and how will an increase/decrease in hours impact the budget, bearing in mind entitlement to JSS?
Is it more viable to retain a fewer number of workers on full time hours, or a larger number on reduced hours?
In an ideal world, managers need the ability to explore different scenarios, assess the organisation-wide impact of workforce remodelling options, including being able to drill down to a departmental and individual employee level.
It’s also worth noting that employees can be brought on and off the scheme and do not have to be working the same pattern each month to be eligible. This means there’s scope for being flexible with it, according to organisational need.
What we did
For the new model, we used the Salary & Compensation Accelerator, one of the fast-start modules we have created for IBM Planning Analytics.
While the government’s JSS announcement was still hot off the press, we were able to take the details of the scheme - i.e. duration, sliding-scale entitlement, employer/government apportionment - and integrate this into a new model.
It means that existing customers can already measure the full implications of JSS on their staffing budget. Crucially, they can use this to explore potential scenarios and modifications to their workforce, including reduced/increased hours and which roles to retain, and immediately see the likely budgetary impact.
What it demonstrates
With legacy planning processes and technologies, creating this type of scenario planning is a major, time-consuming task. But with the Salary & Compensation accelerator, the hard work is done for you. A change is announced, you input the details into the accelerator, and you can immediately start assessing the impact.
This is not going to be the last government intervention we are going to see in the coming months. Indeed, there’s a suggestion that the requirement that an employee must work at least 33 percent of their usual hours may be increased from 1 February 2021. Also, the possibility of sector-specific schemes coming into play cannot be ruled out.
To make the right decisions on staffing - and indeed, the budget as a whole - organisations need the ability to test different approaches, and to do it instantly. This is precisely the level of capability that IBM Planning Analytics offers.
To discuss increasing your Salary & compensation planning capabilities and to discover how IBM Planning Analytics can be put to work within your organisation, speak to us today.
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