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How the furlough scheme can affect company culture and what to do about it

The UK furlough scheme extension signals how much longer it will be before we see a return to “normality”.

With millions of workers on the scheme, one issue many businesses are having to face is how to re-integrate a workforce comprising furloughed and unfurloughed employees.

What leaders do now will be important in the coming months as businesses emerge from the effects of the winter lockdowns.

The impact of the furlough scheme on company culture

Working with both groups of employees, we’ve seen misperceptions in both directions that in turn could have a negative impact on company culture.

The idea that furloughed workers are happy being paid to do nothing is a mistaken one.

As business writer Daniel Pink says, people’s desire to do something with meaning is a key motivational factor. Without this many struggle with a lack of purpose, as their normal routine is replaced with plenty of time to ruminate. Feelings of isolation, anxiety and uncertainty impact on our mental health.

Employees’ home lives vary considerably and their concerns will reflect this. For some a furlough scheme could be regarded as something of a relief – many people are juggling a work life with young children, caring for ill or elderly relatives or may be have concerns about their own health or welcome the chance to pause and reflect.

Conversely, employees still working for their business can be the subject of misconceptions too. They might be regarded as being somehow protected from the future when the reality may be very different.

A demanding work schedule, continued school and child care closure and uncertainty about jobs and the general economic outlook are creating anxiety. Work routines can often be subject to disruption or even reduced hours, causing other stress triggers.

Managers need to bridge the divide

In order to reduce conflict and misunderstanding, managers need to understand some basic principles of human behaviour around the way people communicate.

Using the SCARF model

Neuroscientist David Rock’s SCARF model is a useful tool to understand how employees may be affected.

Rock’s concept is based on brain research on five social domains – status, certainty, autonomy, relatedness and fairness. These all influence our behaviour and can trigger the same threat-and-response processes that our brains rely on for physical survival.

The theory behind Rock’s research is that minimising the perceived threats and maximising the rewards is the way to help people collaborate in a more harmonious way.

Remember, employees react to the same general situation differently. Using this tool gives managers a way to mitigate an individual’s state with a variety of solutions as outlined below.


A furloughed worker has had their employment status interrupted. It can result in feelings of not being valued. To counter this state, we recommend employers regularly stay in touch with their furloughed workers to encourage a strong, positive culture.

There is no restriction on social contact between furloughed workers and their companies, so consider pairing them up with current employees via a buddy system. Use this as a way to involve both groups of workers in social events. Having regular chats provides an opportunity to check in on how people are feeling too.

Alternatively, volunteering is one example of how they may use their skills through schemes like www.furlonteer.com.


At present it’s very unclear what is going to happen over the next few weeks, let alone this year. This can create a huge amount of anxiety for everyone.

One way of mitigating this is for leaders to be in regular communication with their teams. This links very much to the psychology behind crisis leadership, a theory called holding. Be open about the unpredictability, communicate principles and share plans regularly.

Be willing to acknowledge the stress and mixed reactions everyone is encountering without giving in to the powerlessness of the situation.

While no one has a crystal ball, the business is still making informed decisions on a regular basis so take the time to explain these and why some decisions are being given priority over others.

Keep a drumbeat going so as your teams prepare to come out of furlough, they feel fully involved with how the business is operating.


People like to have a sense of control over events. Many workers – whether furloughed or unfurloughed – will currently feel a lack of choice in their state of affairs. While it’s probably very difficult for companies to predict the future, making sure, where possible, you offer your employees choice as the situation evolves, will be an important part of it.

What do they need to know about what’s changed in the months they’ve been away?

One way could be to form a panel comprising both groups of workers and involve them various aspects of decision-making for the future. Can you jointly create a new project or marketing campaign for everyone to collaborate on, to draw a new line in the sand as your business moves forward?


This is the notion of how workers have a sense of safety among their fellow team members. If furloughed workers have been away, they may be feeling defensive if they perceive they are not core to business. Offering those employees a chance to upskill is a good way of maintaining positive work relationships. Be aware that they need to be paid minimum wage for training undertaken while on the scheme.

Before they come back to work, help them to avoid awkward conversations by making sure your teams know when they are due to return.


If someone believes something is unfair, it can result in a powerful threat response. Communicating a return to work needs careful handling. Managers will need to share the triggers that will bring people off of furlough. By doing so will help illustrate how decisions around furloughing are function-led.

Share the milestones that need to be reached with your employees where possible. Set up a shadow board made up of team members to gain staff feedback on company communications.


An inclusive approach is crucial as your company emerges from lockdown. By setting out clear plans for the road ahead, you’ll be in a better position to deal with those hidden potholes and restore your business position more strongly.

We have developed a number of workshops to help support employees during the Covid-19 outbreak. Please get in touch if you would like to talk through a particular issue or challenge you are facing.

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