Small business owners, as well as goliath corporations, face the same hurdle: how to save employees’ jobs during a global pandemic. Millions of Americans experienced hardship and turmoil due to the 2008 housing crisis, but the current economic fallout casts a long shadow across all industries. Yes, the healthcare field and the food market are essential, but certainly are operating outside the norm. There is also a significant risk poised to essential workers’ health and mental well-being.
As the repercussions of COVID-19 become apparent, it’s logical for employers to contemplate cost-cutting in the means of layoffs to preserve the bare bones of the company. After all, it’s difficult to anticipate and plan for a disaster of this magnitude.
StaffScapes, a human resource solutions center, specializes in payroll services for Denver companies as well as national organizations. Consequently, they’ve witnessed firsthand the catastrophic toll the pandemic has taken on company resources, operations, and personnel. Despite everything, there are measures an employer can take to mitigate job loss.
Below, StaffScapes reviews how to ease the pain of an insurmountable downturn and maintain payroll to help the economy recover.
The quality of leadership is tested in the worst of circumstances. Employers may think that transparency in turbulent times will frighten employees, but it’s needed now more than ever.
Employees are creative problem solvers, and if left to assumptions, their imaginations may run wild with peril. Reduce the stress of the situation and be upfront about the challenges that lie ahead. Provide transparent, honest feedback regarding the financial health of the company and take practical steps to come out on top of this.
Not every business owner is in a position to reduce or forego their salary, but for those select few, a temporary pay cut could make all the difference. On average, CEOs earn 278 times as much as the typical worker. Several CEOs in the airline and entertainment industries are leading by example and forgoing their salaries. Furthermore, this type of sacrifice will infuse the workforce with trust, loyalty, and respect for the leadership team.
Unconventional alternatives to layoffs may cause the bow to bend but not to break. Work-sharing or “short-time compensation” programs temporarily reduce work hours to scale down overhead and operating costs. Instead of a five-day workweek, employees work four-days or instead of eight hours per day they work six. Employers should troubleshoot and refine the process until they discover what makes sense both from the staff’s perspective as well as the economies of scale. Naturally, full-time employment is preferable, but as the US faces 20 million unemployment claims, work-sharing is a worthwhile short term inconvenience if it saves jobs and the company.
The American Congress recently passed the CARES Act, which contains several provisions to aid businesses via loans.
One of the more promising aspects of the economic stimulus package is the PayCheck Protection Program (PPP). Qualifying businesses, those with less than 500 employees, are eligible to receive benefits. The loan can be used for operating costs, but a portion or all may be forgiven if it’s primarily used for employee payroll for eight weeks between February 15, 2020, and June 30, 2020.
Business owners interested in applying should reach out to their preferred lender to clarify questions and concerns.
Employers running out of options should consider furloughing employees as a last resort. Furloughed employees are technically on temporary unpaid leave from work, but qualify for unemployment benefits and typically retain their health insurance. It also preserves employees’ jobs at the company so that once the economy reopens and stabilizes, people can return to work.
StaffScapes helps businesses in the Metro-North area and throughout Colorado navigate the complex landscape of human resource compliance, policies, and best practices. We customize our approach to each client’s unique needs and work with firms that run the gamut of business types, from family-owned service businesses to manufacturers to disaster recovery firms that send employees all over the country.