We are now two weeks into the lockdown and it is heartening to see the numbers of people recovering from Covid-19 are overtaking the confirmed new and/or probable cases, bringing hope that NZ will be in a position to move out of Alert Level 4 by the end of the four week period. As mums juggling kids and working from home reflecting at the half way point, it’s certainly been a case of “the days are long but the weeks are fast” for us, but we understand everyone will be experiencing this time very differently.
We are directly seeing the impact of Alert Level 4 on our clients, their business and their people. We are currently working alongside our clients, supporting their scenario planning and preparation for when we move out of Alert Level 4, and what this means for their business and their people.
We wanted to share some of our thoughts about what you could be considering from a people planning perspective over the next couple of weeks and beyond.
Firstly, a note on the wage subsidy. More than 1 million Kiwis have received the Covid-19 wage subsidy so far, with $6.6 billion paid out already. If you haven’t already done so, and are eligible, you should apply now. The Government wage subsidy is designed to support employers impacted by COVID-19 so you can continue to pay your people, and supports your employees so they can continue to receive an income and stay connected with you, even if they are unable to work. As an employer, you are required to agree that for the duration of the subsidy you will make your best efforts to retain your people and to pay at least 80% of their wages, and if you are unable to do so, pay at least the rate of the subsidy to your employees. For further information and the link to apply for the Covid-19 wage subsidy visit https://workandincome.govt.nz/products/a-z-benefits/covid-19-support.
For now, most businesses will be able to utilise the 12 week Covid-19 wage subsidy to pay their people and keep them employed for at least this period of time while they ‘weather the storm’ and work out what the world may look like for them coming out of this. In an ideal world, businesses would be back to work after the 4 week lockdown period, with their business picking up over a short period of time, keeping all their people employed. Sadly, some businesses may not survive. This has been particularly evident by those significantly impacted such as travel, tourism and hospitality for example, who have already needed to consider or move to reducing costs through restructuring and/or redundancies. However, it is likely that most businesses will be facing scenarios that fall somewhere in between.
It is therefore critical that you take some time to assess where you are at, gathering as much information as you can to plan and prepare. The situation is likely to change day by day as it continues to unfold, and the Government releases more information. Bearing this in mind, some initial questions you could consider are:
- Is the current situation likely to be short or long term?
- What are the chances of business recovery?
- If recovery is possible, when might this be?
- What might the business look like? Will it be the same or different?
- What options has your bank and/or accountant provided you?
- How are other similar types or size businesses coping and adapting?
- What can you do to cope and adapt?
Having thought through these overarching questions, you will need to start thinking about what your workforce might look like in line with the differing alert levels, described in detail at https://covid19.govt.nz/alert-system/covid-19-alert-system/. It is likely that we will be living within the levels of the alert system for some time, so familiarity of these levels and planning around each of these are key. At the time of writing, the Government has said that businesses need to start preparing for how they will operate at Level 3, and that guidance on what businesses could trade will be provided. In the meantime, some potential scenarios you could start planning for are as follows:
- What happens if we stay in Level 4 for the short, medium or long term?
- How can you prepare for a move to Level 3, in say 2 weeks, 4 weeks, 6 weeks, 12 weeks or longer?
- If we are able to open under Level 3, how will you contact trace everyone who comes through the door? How will you enforce social distancing?
- How can you prepare for a move to Level 2, in say 4 weeks, 8 weeks, 12 weeks or longer?
- What would happen if we needed to move back up a level, ie from Level 3 back to Level 4?
- What are the critical roles/people you need in your business at Level 4, Level 3, Level 2, Level 1 and what are the key areas of focus for these roles?
- Who will you need to come back to work and when/why?
- Who might not need to work and at what level does this change and why?
- How will the wage subsidy apply in each of these scenarios?
- What will you communicate and when?
- What is your Health, Safety and Wellbeing obligations at each of the Levels?
- What might your business look like in 10-12 weeks from now?
As a last resort, you may need to consider the possibility of restructuring, reducing hours and/or redundancies, dependant on how your business is impacted further down the track. We will write about this in the coming weeks.
Remember, any people related changes you make need careful consideration. We advise that you ALWAYS check your Employment Agreements before undertaking any changes and seek professional advice to make sure you are meeting your contractual and legal obligations.