On Coronavirus: A Survival Kit For Entrepreneurs
March 19, 2020
Staying abreast of the economic fallout from the Coronavirus pandemic is like standing on solid ground that has suddenly turned to quicksand around you. Advising business clients on employment law in this quagmire is a challenge, because so little in the law is geared for the snap commerciality and responsiveness required from leaders in the last fortnight.
The answer to almost every question I am being asked by employers right now is a mixture of the law, commercial awareness, and an understanding of the emergency support being conjured up by the government daily. Not to mention a dollop of faith in human nature and, importantly, the decency of bosses trying to do the right thing at a time of extreme pressure.
The Governor of the Bank of England, Andrew Bailey, is urging employers not to make redundancies and insists he will be there to support their needs. But even if this support is coming, it may arrive too late to stem the first wave of reactive cutbacks. In fact, based on what I’m seeing, this has sadly already transpired.
There is a lot of general advice circulating at the moment, and plenty of lawyers to guide you on the specific impacts of the pandemic where needed. But what I don’t see is advice aimed at the immediate needs of businesses or, more importantly, those who lead them. What they desperately need right now is practical business advice and in this scenario much of the law comes a distant second.
So, let me attempt to plug the gap by suggesting a survival kit for the decisionmakers out there.
If you can afford to slow down, slow down.
If you have enough resources to meet the month end wage bill, then don’t rush to offload your workforce. Wait a week or two to see what the economic rescue measures mean for your business. Meanwhile, try to retain your staff with creative reshaping of the workforce and temporary reductions in pay and workload. If workers need to self-isolate or look after family members, talk to them about possible compromises and also consider asking them to take paid leave if that will tide them over. This could spare them the terror of statutory sick pay, if it’s even available, and most things are up for discussion with staff if you’re genuinely trying to avoid dismissals.
Seek out the promised government resources
The support for business is coming and you should be at the front of the queue for this. The British Business Bank is due to roll out the “Coronavirus Business Interruption Loan Scheme” (CBILS) for small and medium businesses from next week and the government will underwrite up to 80% of loans (upto £5m), with the first 6 months of finance payments also being interest-free. There are over 40 accredited lenders participating and the details are still being defined, but CBILS should be live very soon.
Turn to your trade partners for support
We are all in the same boat, and you should not be shy about reaching out to commercial landlords, suppliers and service providers for temporary concessions to tide you through the next few months. Be proactive and initiate dialogue with your trade partners, even if you don’t need anything for the moment. If they value your business (or maybe more importantly your revenue), you may be pleasantly surprised by how much flexibility is there for the asking.
Plan for the medium term
If the rumours of a forthcoming vaccination are true, maybe the pandemic will pass and quickly seem like a bad dream. But until that happens, it is smart to invest in contingency planning and prepare for an extended period of business turmoil. You should be forward planning for at least 6 months with your financial advisers, stress-testing your cashflow projections, and also staying in close contact with your bank manager regarding the needs of your business.
“Flexism” has had its day
If there is to be a silver lining to the pandemic, I think it will be the normalisation of flexible working. Even the most cynical and “flexist” bosses out there are currently turning to remote working and finding that this has little or no impact on productivity or deliverables in the modern workplace. The way we work is changing beyond recognition and this will be felt long after Covid-19 is consigned to history. Set up good accountability and oversight, harness the technology that’s available – and then trust your colleagues to go and work from anywhere.
Leaders must lead
Above all, business leaders should keep their heads in the midst of the current crisis. Coronavirus may be the greatest unforeseen threat of the modern era, but it will almost certainly pass soon enough. The decisions you make today in relation to the workforce and talent pool under your nose could decide how your business stands, and thrives, when that new era comes.
None of the above is intended to suggest that you should disregard the law, far from it. But I firmly believe that how you approach the pandemonium caused by Covid-19 is as important as the solutions that you settle on while guiding your business back to solid ground.
If you have any questions or need assistance with any of the above, my colleagues and I are ready and available.