COVID-19 - Act Now To Protect Your Business19 March 2020
While you will do all you can to look after your people and maintain employment, the reality is you will need to take whatever actions you can to protect your business and minimise overall job losses. You know that you need to keep good people to ramp up your delivery of products and services when some form of normality returns, but first, you have to survive to that point.
I’ve seen a few catastrophic situations in my time and the one thing I’ve learned is the need to be decisive and act early.
The Government’s support package will provide a certain level of assistance to maintaining employment, but:
- Before you can obtain the assistance available, you will need to establish a 30% drop in revenue, or a projected drop of that magnitude. Many SME businesses will be in trouble well before they get to that point.
- Even if you do qualify for assistance, you will be limited to $585 for each full time employee for 12 weeks to a maximum of $150,000. The fact is that amount will only cover around 30 hours per week on the minimum wage for about 20 employees for a period of 12 weeks.
You should start right now to minimise the impact of what is coming your way. This is a time to engage with your people and secure their support for a range of responses, so you will need to be transparent and explain the context.
Many of the options available will be more palatable than the alternative of more widespread job losses. Explain that as a group, you are all in it together and so you are asking for everyone’s cooperation to help everyone get through what is to come. You could consider graduated responses, including:
- Implementing a hiring freeze, effective immediately.
- Deferring pay increases until the situation improves.
- Using annual holidays and/or other leave entitlements.
- Working reduced hours (annual holidays could be used to top up to a full weeks’ pay).
- Taking unpaid leave.
The reality is that if at any point in time the above measures are not balancing resources to demand then, despite the desire to save jobs, you may have no choice but to institute redundancies, whether voluntary or compulsory.
In that case, you are still obliged to conduct a fair process, but exceptional circumstances justify exceptional actions and that may mean that the necessary consultation processes are compressed to deal with the commercial realities of each situation.
These are difficult times for everybody and the uncertainty of what lies ahead will cause anxiety. All you can do is deal with this one step at a time, but as I said earlier, experience shows that for the best outcomes you need to be decisive and act early.
For immediate advice on your situation, call us for a confidential discussion - 021 920 323, 021 920 410, 027 272 7295.