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Significant proportion of catering equipment workforce could face redundancy after furlough ends

FEA survey furlough redundancy crop
40% of respondents to FEA’s survey said they would have to make redundancies at the end of the furlough period.

The results of FEA’s ‘State of the Market’ survey could prove to be a concern to many in the catering equipment industry, with the association looking at redundancy intentions.

The 30 respondents to the questionnaire were drawn from a cross-section of manufacturers, distributors and importers, resellers, dealers and service companies, with 93% of them falling into the small to medium enterprise bracket of fewer than 250 employees.

FEA’s chief executive Keith Warren revealed the survey responses during this week’s Specifi webinar, called ‘Ready for the Reinvention’. This showed that 30% of respondents had furloughed 80% of their staff during the coronavirus shutdown. A further 8% had furloughed 90% of employees, with 50, 60 and 70% furloughing each carried out by 15% of respondents.

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Warren commented: “These figures are not untypical, but slightly heavier than those reported by Make UK for the broader manufacturing base. We have to recognise that furloughing of staff was to avoid the need to make staff redundant very early on in the process.”

But when the association asked the question of how many employers would support the furlough cost of 20%, as the government’s contributions gradually reduce over the remainder of the year, or make staff redundant, 40% of those businesses reported they would have to make redundancies.

However, Warren analysed: “The good news is that more of the employer base, 60%, said they would support that salary costs carrying the furloughed staff through, and I think that’s indicative of the economic outlook of a staged recovery that industries have a need for well trained, experienced staff to benefit from the recovery process when it comes.”

The survey also studied other governmental support for those in the sector. 32% of respondents had applied for a grant, but only 38% of those were successful in receiving one.

According to Warren: “Certainly there was a differential between the way in which this was interpreted by local authorities. We pressured the government hard to try and provide some clarity for our industry to be available to receive the grants, given that we are 100% dependent on operators, who had effectively closed down.”

Furthermore, a huge 96% of Covid-related insurance claims from respondents were not successful.

Nevertheless, a higher proportion of survey respondents were successful in having loans approved. Out of the 36% that applied, 53% of their cases were authorised.

But Warren cautioned: “The challenge with loans is the debt overhang that this brings with it. There is a feeling that the effects of deferrals of VAT, loan deferrals through the civil scheme and other loans that businesses may have, means that it may be challenging next March or April when business starts to recover.”

Other panelists in Specifi’s ‘Ready for the Reinvention’ webinar on 24 July comprised include Jack Sharkey, MD, Vision Commercial Kitchens; Scott Jones sales and key account director EMEA, True Manufacturing; Graham Kille, sales director, Rational UK; Nic Banner vice president sales UK and Ireland, Specifi and Bob Wolters, CEO, Specifi Global. More coverage from the event will follow.

Tags : FEAredundanciesSpecifisurveywebinar
Clare Nicholls

The author Clare Nicholls

2 Comments

  1. A difficult time indeed but a time to make sure that as somebody in a sales role you are doing just that – selling. With so many great products and solutions available now is the time to sell, sell, sell. The process maybe different, the audience maybe less but the skills of a top quality sales person will be there to see……anyone can sell on price………only the few can add the value

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