Ensuring Business Survival and Recovery

March 20, 2020

Businesses across Exeter and of course worldwide, are experiencing a sharp and immediate downturn in business as a direct result of COVID-19. We want to stress that you are not alone in this and we are doing all we can to help businesses make it through this unprecedented time.

So far Rishi Sunak has announced a support package of £350bn for businesses, on the 17th March 2020, with even more measures for the airline, retail and hospitality sectors. The measures include loan arrangements, business rates holidays and grants. All of the options available can be reviewed in our guide written by Kirk Hills partner Sarah Chamberlain. Just click here.

If after taking advantage of these measures your business is still under a lot of pressure, you need to know the steps to take for survival and then recovery once these times have passed.

Business Survival and Recovery

Survival

  1. It may be time to speak to your employees and explain the situation and see if they will volunteer to reduce their hours, pay or benefits during this time of business survival. More often than not, staff will agree to temporary measures in order to see the business get through a difficult time. It is important that you set these changes of contract out in writing, timescales will need to be defined properly with the option of extending the timescale included – you may need to take legal advice.
  2. Another step to take is to read through your terms of employment, considering whether they allow for lay off or short-time working. It is important to remember that if employees’ hours are reduced unilaterally for either four weeks continuously or six weeks in any 13 week period, they may be able to claim redundancy. For more advice on this please click here to get in contact with us.
  3. It may also be the case that you need to withdraw any new job offers you have made. However, if the job has been accepted it could already be a breach of contract which could mean you owe the employee for any loss they have suffered. What may be better is that you defer the start date and have an open conversation with the new employee about the current situation.
  4. A crucial step will be to freeze pay rises and promotions for a temporary period.
  5. A step that will most probably be met with refusal, is offering staff the ability to take a sabbatical, annual leave or a period of unpaid leave; currently your employees won’t be able to travel hence the unattractiveness of this option.
  6. A strategic step that can help your business in the future, is to explore the diversification ability of your workforce. Asking staff with skills they rarely use to focus on these if they will generate profit.
  7. A final step you can take is to conduct a lawful and compliant redundancy process, ensuring that appropriate pools for redundancy are created. In order to ensure that you can recover we advise reducing numbers of employees in areas where you are confident you can replace them when business levels return to usual.

 

Recovery

The crisis will pass, your business will then need to start thinking about bouncing back. The ability to take advantage of increases in demand or adapt to the change in business landscape are crucial elements you will need to be ready for.

  1. Retain your best staff.
  2. If they have had their hours reduced, stay in contact with them, staying transparent with updates and offering positive messages.
  3. Create a real-time communication group or similar.
  4. Always respond to any questions in a timely and honest way to eliminate any uncertainty.
  5. For the most loyal and supportive employees of the business let them know that they will be rewarded in due course.
  6. Consider incentives such as a bonus scheme, that sees the most productive rewarded for being so.
  7. Use recovery time to train staff in new areas you need them to feel comfortable in.
  8. Redeploy staff back into areas that you need them right now.

These are unprecedented times and there is a lot of economic fear for individuals and businesses. Remember that any decisions right now can define your company and will impact upon employee relations.

We are here to help advise and support you in all areas that we can, we are continuing to operate throughout this time just click here to get in contact with us.

Our recent blogs

Changes to Employment Allowance

February 10, 2020

From the 6th April 2020, eligibility rules for claiming the Employment Allowance (EA) are changing. This will mean that professional bodies will need to provide updates to their members, whilst tax agents and advisers need to make sure their clients are ready for the change; this is something we will be doing following this update.

Full Article

How much does it cost to hire an employee?

September 16, 2019

One of the most significant milestones that a business will run into is hiring its first employee. The growth that your business undergoes to get to this point just shows how successful you have been in getting your startup moving, so congratulations!

Full Article

Fraudulent Schemes During COVID-19

April 1, 2020

Whilst the current difficult times are seeing many businesses come together to help support and lift one another, there are unfortunately some who have taken these unprecedented times as a green light to begin pushing their fraudulent schemes.

Full Article

Can You Furlough Yourself As A Director?

April 2, 2020

Interpretation around furloughing yourself as a Director of a Limited company and being able to claim under the CJRS scheme is coming to light.

Full Article