Adopting a ‘People First’ approach to COVID-19

Contingency planning in the form of alternative and innovative employee engagements

As the impacts of the Coronavirus continue to unfold, adopting a ‘people first’ approach to operational decision making is more important than ever to ensure the resiliency of our business. As company leaders, we must act with empathy, compassion and transparency, keeping our team’s health and safety as the highest priority. The ultimate goal for the startup ecosystem through this turbulent time is to keep as many people working as possible, for as long as possible whilst continuing to build sustainable businesses. This means adopting a ‘retention over termination’ people strategy whilst still lowering operating costs, given the challenging economic climate.

Observing the current conditions, we find ourselves operating in an artificially suppressed market with revenue targets that have become unachievable (with no clear line of sight on when this will turn around). To survive and thrive, we need to act quickly to align talent with available capital and our costs with expected revenue. Implementing innovative employment arrangements to adapt, challenge and improve the way we work enables us to reduce burn, retain top performers and continue to build a growth business. To do so successfully requires a thoughtful, pragmatic and calm approach from our leadership teams.

Through the global financial crisis, businesses acted on a knee-jerk reaction to cut costs and, as a result, people were unprepared and under-resourced to return to business as usual once the market corrected.

Learning from this period, any contingency planning in the current climate needs to be strategically executed with integrity and honesty, and not rushed with panicked and reactive decision-making.

Business leaders should prioritise clear communication and consultation with employees to bring them along on the journey, maximise engagement and productivity levels through the downturn.

Through adopting a ‘people first’ approach and remembering we are all in this together, your team may surprise you with their uptake of and advocacy for new initiatives. In short, they would rather be in-the-know and in a role right now, than in the market looking for one. With the right messaging, clear action and a people support plan we can ensure a highly productive and positive return to business as usual, once pandemic-related disruption is behind us.

Creative ways to retain valued talent whilst keeping costs low:

1. Flexible working days. Some employers have adjusted their working fortnight from ten to between seven and nine days, pro-rating salaries accordingly. In doing so, ensure the manager of the affected individual reviews the scope of roles/job expectations and reduces goals accordingly to align expectations. This must be clearly communicated with the employee. Where possible, allow them to choose their preference such as nine-day fortnight versus a four-day week or a four-day week versus a shorter working day of 1.5hours. One interesting approach to this is ‘No work Wednesday’ or ‘Free Friday’ — a company wide four-day work week. In fact, there is research suggesting a four day work is more than sufficient; eg. Microsoft 4 day work week boosts productivity
2. Leave options. Encourage non-critical staff to take leave to get it off the books or even consider leave without pay. Review leave policies such as extended leave and parental leave, as well as encouraging people who experience symptoms to actually take sick leave and those looking after others to utilise compassionate leave.
3. Stand downs. In the limited circumstances where staff cannot be usefully employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible you can ‘stand them down’ and send employees home without pay. The advantage of a stand-down compared to a redundancy is that employers have the option of being able to re-staff and return to normal pretty quickly if the conditions that shut them down recover. This should be considered over terminations so you can return to business as usual once the market corrects, your employees would much rather keep their jobs and access the Jobseeker wage subsidy. However, it’s important to obtain legal advice before attempting to use this option as there needs to be a significant impact on the business from an external event and not just a reduction in sales and revenue.
4. Remuneration packaging. Exchanging salary for employee share options is an alternative structure, allowing you to retain the individual while still reducing overhead. You can also consider a bonus freeze to put all short term/long term incentive cash bonuses on a temporary hold. A salary reduction strategy requires a leader-first approach as it can help with overall employee morale if senior management takes a bigger cut than the rest of the company. Regardless, it must be communicated clearly as to why this is occurring, and that revised employment conditions will be reviewed on a monthly basis. Also consider making it a flat percentage reduction across your entire company, which won’t completely shatter your employees’ personal finances, but will give your business a bit of a financial break.
5. Contractors. If you have a contract or part-time workforce such as daily rate contractors or consultants, they are usually a more expensive resource by comparison and should be cut back before permanent employees. At the very least, minimise contract renewals once they expire.
6. Job Sharing. In order to consistently cover certain tasks, especially those that require fulfilment through the whole working week, consider cross-training and sharing responsibilities for specific roles.
7. Hiring Freeze. Many of the companies that deploy mass lay-offs are still placing job postings at the same time. In other words, they’re getting rid of valuable human capital to save money, while bringing in fresh blood at lower salaries (which is never a good look in the market). It costs less to retain employees than to replace them, so consider a hiring freeze as an alternative to layoffs.
8. Sabbaticals. Some employees might welcome a sabbatical, which is longer than a stand down option, but still guarantees that the person can have his or her job back afterward and you don’t have to replace the role.
9. Consider a virtual office. You can free up office space to rent or downsize by keeping essential staff onsite and shifting the rest of the team to a remote work model. Given most teams are work from home at moment anyway they will be well practised! Build a remote work playbook, maintain trust and regular communication with employees via Zoom and Slack.
10. Get the Team Involved. Now’s the time to start asking questions. It’s also the time for transparency in leadership. Let your team know about your company’s struggles, then ask for their feedback. Perhaps conduct an employee engagement survey to find out their preference and how they would they prefer you to handle the situation. Do they have any innovative suggestions that you haven’t already considered? They may surprise you and their involvement in the process will make them feel connected to the business and empowered.

Please note, if any employee is not amenable to these alternatives, you should seek legal advice before proceeding to implement any change to their employment arrangements.

In short, as leaders it’s on us to be creative in our approach to contingency planning, adopt a ‘people first’ mindset and empower your team to come forward with ideas to bring them on the journey.

This is a time to reinvent what’s possible and rewrite the rules to adapt to the uncertain future we are facing.

We are all in this together and if we continue to act quickly and pragmatically with compassion for our ecosystem, colleagues and each other, we will undoubtedly come out on the other side with a world-class, highly engaged team and perhaps an even stronger, more resilient organisational culture!