April 14, 2020
A HR Dilemma: Keeping your people during a downturn
With the impact of COVID-19 now a stark reality in Australia, tough economic times have hit many businesses already, with more hardship expected in the coming months. The grim reality for majority of businesses is financial pain and pressure. This could mean potentially shedding staff despite the best intentions of the JobKeeper scheme. So what strategies can you try before you make that tough call to cut staff?
HR Option 1: Let staff take leave
Assuming cashflow isn’t your main concern (and let’s face it for most it is) if people have accrued leave, now’s the time to see if they’re willing to take it. Ask people with long-service leave or annual leave to consider taking it now for the greater good of the company. After all, this is a liability you were going to have to pay anyway. So it’s better you pay it out now if it means people can keep their jobs during this crisis. And to make this process easier most awards have been updated to allow people to take annual leave and LSL in more flexible ways – with a week’s notice.
HR Option 2: Move to a reduced-hours week
During the GFC, I saw plenty of companies shift to a three or four-day week with a positive effect. Employees were prepared to take a 20-40 per cent pay cut if it resulted in reduced hours, especially if it avoided redundancies. They were also more willing to consider a shorter working week if they saw their managers making this shift as well. The temporary JobKeeper legislation allows employers to make these changes systematically and fairly when underpinned by the wage subsidy benefits.
HR Option 3: Work shorter days
A variation of the above theme is to work shorter days. Reducing employees hours by two hours, especially in stand-alone roles where the business doesn’t need someone all day. During these times, some employees will appreciate finishing earlier, particularly if their partner is working and children are at home. Remember though, if you’re asking your team to go down this path you must be prepared to do it yourself.
HR Option 4: Jobshare
Often you’ll have more than one person performing the same role. For instance, you might have three salespeople where, due to a downturn, you may only need two. Rather than making one of these roles redundant you might consider job-sharing. Plenty of businesses I witnessed during the GFC worked out job-sharing arrangements. This meant two people would work 2.5 days a week as an alternative option, giving the business coverage.
HR Option 5: Tap into the flexibility of casuals
In the past few months many businesses have needed to stand down their casuals. However, the JobKeeper scheme provides the opportunity to re-engage with many of your long-term casuals. Taking a strategic approach to your workforce planning during COVID-19 and re-mobilising your casuals could result in a huge saving. Especially if you combine your planning with the options outlined above.
It’s all about being prepared
The most important thing to remember when you take any of these actions is to keep everything legal and above board. After all, when you change someone’s role outside of the JobKeeper legislation you may possibly trigger a redundancy. There are also leave accrual rules and notice period complexities to consider, so take care.
Where I’ve seen these approaches work best is in dynamic businesses with collaborative cultures and strong leadership. Usually there’s a strong sense of collegiality and people are prepared to save each other’s jobs as well as their own. There also needs to be a strong element of trust in the company’s leadership and it certainly helps if there’s a timeframe around any arrangements so that people have some level of certainty, even if its tough financially. At this stage JobKeeper will run until 27 September but if you’re not eligible for the subsidies then try and create some level of certainty for your people, even if it is just a commitment to review at a point in time.
If you have any questions regarding staff management during the current COVID-19 crisis, the JobKeeper scheme or you’d like some help with your strategic workforce planning at this time, then feel free to reach out to the Catalina Consultants team today.