The Covid 19 impact is yet to be felt, but the writing is on the wall. Industries are shut, companies working at 50% of capacity, demand has dropped and the ensuing sales at the minimal level. The future is uncertain especially due to the lack of projections around the business as usual which continues to be a distant dream with the number of cases increasing day by day.
The fear of lay off’s, salary reductions, forced sabbaticals, selective downsizing, and general shutdown are already in the air. Investors have already lost millions and millions of dollars, and while these will recover in due time, the uncertain timeline will cause additional distress. In such a situation, the company culture, the principles of the founders, owners and the board, as well as the flexibility shown by the employees will play a key role to lay the foundations for a prosperous future. So what options are actually available to companies?
- Take a pay cut – look at all levels in the company and implement a pay cut of 10-20% with a commitment that the same will be restored once the situation became better.
- Hold off all salary increases, bonus payouts, non critical promotions, you will end up saving 10-15% of your salary cost.
- Discuss with the employees and agree on 4 paid days for every 5 days worked, that way we save 4 days a month in terms of salary cost per employee.
- Open up options for LWP, Sabbatical, Education leaves, etc to employees who are interested in taking a career break.
- Hold off on adhoc costs e.g. Employee linked budgets, CAPEX, Travel costs, Sundry expenses etc. The COVID 19 impact has already trained teams to work virtually, hence travel and meetings etc. should be easy to execute.
- Sell of parts of the business that do not fit into the overall strategy of the organisation – a capital influx could help sustain the business while it bounces back to full productivity
- Lastly, look at lay off’s but focus on the non critical and high pay individuals first – you don’t want to let go of too many employees should you need them again.
In summary – we are going to rebound sooner than later, as the demand is out there, and this is a break of sorts. We cannot afford to lose our resources. We need to protect them, build on their capability and keep them ready for the time when it goes up again.
Disclaimer – These are my personal views and have nothing to do with where I work or the people I am associated with it.