Covid-19 – Where to next?
Tuesday 14 April 2020
Preparing for our next steps
- Coming guidance from government
Helping you do the right thing
- Understanding where your employees are at
- Essential values to be applied
- Scenario – Lockdown continues but my finances don’t
- Scenario – We move to level 2 or 3 but I only need some staff
- Scenario – I cannot afford to keep all staff on – I must downsize
Essential HR here to help – and working from home. For ongoing help, you can contact Mike on 027 2808546 or mike@essentialhr.co.nz or Beccy on beccy@essentialhr.co.nz or 027 2909070 – and if you phone our landline 03 6590377 you can leave a message that gets delivered to us automatically. Please bear with us if you can’t get straight through – we are getting many calls! I’m happy for you to pass this on to others.
If you need to conference call, we are all set up with Zoom.
Preparing for our next steps
Guidance from government
We will find out only on Monday (20th) what is to happen at the end of lockdown at midnight on the 22nd. In the meantime, we have been promised a number of things:
- Today Treasury should produce some economic scenarios for the nation looking forward
- Tomorrow the Finance Minister is announcing next steps in financial support, in an online speech to Business NZ
- On Thursday we will receive more details as to exactly what restrictions will be in place for Covid Alert Levels 3 and 2 (including business, education, transport and recreation)
What can we expect?
I simply cannot envisage an immediate return to the way things were! And even if we rapidly return to level 1, our businesses may have relied on international movement of people or products – and they will not be returning to any sort of normality for some while yet.
Preparation for our next steps are vital and should not be left until you hear on the 20th – by then you should already know what you are going to do in each likely scenario, so that you have two days to get it organised.
You will identify your expected business levels and options in each likely scenario. You will work out your cash flow projections and financial sustainability needs. You will work out what other options you have for business development – and there will be many – I have heard people talking of making things here that had previously been sourced overseas – and of tourism industry focusing on local “tourists” rather than international ones.
And out of this you must determine what need you have for staff – what minimum needs, what degree of flexibility. I can’t help you with this big picture stuff – hopefully you have access to people who understand your industry who can help you work through this – and an accountant for your figures.
This is to help you do the right thing by your employees, given the situation you find yourself in.
1. Understand the place your people are in – whatever your situation:
a. Our mental health stresses may be higher than usual
b. We may have commitments that mean we are restricted on working – like children who aren’t allowed back at school yet; like dependants who are still in isolation and need some care
c. We may well be worried about the risks associated with coming back to work with the virus still around
d. Financially some of us will be really struggling
e. Some of us will be more self-focused than usual and yet situations mean there will not be equity in all things (like some people being paid subsidy alone and not working while some have to work in part and still receive only the subsidy)
2. Dig deep and exercise the following values – whatever your situation:
a. Be, and be seen to be, understanding and patient (keep reminding yourself of their situation in 1 above
b. Try not to dictate but consult as far as possible – while people need leadership and clarity in terms of direction for and needs of the business, insisting on your rights as an employer is less likely to generate the responses and support you need from staff.
c. Communicate – all the time – keep your employees (and quite possibly your key suppliers/customers) informed with ideas and progress. Give staff as large an amount of time as possible to prepare for changes to come and to contribute to your decisions.
d. Be flexible – be open to other ways of achieving what the business needs
e. Be honest – where things are tough, do not be afraid to say so. People expect there to be job losses and know it might be them – so if that is a distinct possibility, then say so.
3. Situation – Lockdown continues, or my business has to continue no more than partly inoperative. You may be unable to afford to keep paying at 80% (or whatever level you are currently paying at.
a. Explain the situation to staff and indicate your options – and here there is likely to be little time for consultation – but it is essential you do not just unilaterally reduce pay. The clearer you can be of the situation the better and it is essential you give them a chance to talk with you and the potential for taking leave.
b. Just don’t reduce pay below the level of subsidy.
4. Situation – We move to level 3 or 2 and I need some of my staff, but not all, at least for a while. For example, because your work volumes will be at best 50% you only need 2 of your 4 employees at work – or you need them to only work (and get paid) for half their normal week.
a. Tell them and consult over who and how much and for how long – this should be a proper consultation – set out your needs and rationale and how you propose to deal with it – or options for dealing with it and give them all a chance to consider and respond and get support.
b. Start the consultation now – do not wait until the 21st. If you consult over a partial return and then the lockdown continues it simply delays implementation – but if you wait until you know when lockdown will be lifted it will be too late to fairly consult.
5. Situation – I cannot afford to keep all my staff on – I must downsize or I will fail to keep financial sustainable
a. It is essential you run a formal consultation process (as in 4a above)
b. Ensure the process does not end until the subsidy does – unless your financial worries are so severe you cannot even afford to pay the 8% leave cost on top of the wage subsidy, and after seeking other financial help. If this latter is the case you must take advice, because you could be in breach of your subsidy obligations.
A word on redundancies – If your subsidy was applied for after 4pm on March 27th you have a commitment to no redundancies during the subsidy period. Even if you applied before this – to make someone redundant you would have to show that the cost of keeping them on, even paying them only the subsidy you receive, is unaffordable. This is likely to be difficult to prove unless you are closing down a business or part thereof.
And finally, I love this word of encouragement from Jacinda –
“Don’t squander a half-time lead”
– we’re doing well in the lockdown – let’s keep up the effort.