Depending on which business you are in, these times may either bring you unexpected opportunities or the prediction of a disastrous future. In either case your labour workforce remains your biggest strength or weakness.
So let us propose a 4 step approach on this issue which you may be called upon to discuss or react to as part of the Board of directors, management or leadership of your company.
Step 1 – Scenario building and business planning.
For larger companies, it is assumed that the exercise of business continuity planning and risk review for the coming times has been completed and you have been put before your options. For smaller companies, perhaps the place to start before considering HR issues, is that of revenue scenarios.
In short – do consider 3 options – How do you expect to react if your revenues and income of your business are reduced by 25%, 50% and 75%. In each of these scenarios, how would you react and what would you do to keep the business afloat.
From this, of course, comes the issue of how to protect cashflow, reduce expenses and tackle the HR issue, which is always sensitive and politicised.
Strategically, there are 3 different approaches that are most pronounced.
The wait and see approach:
Some corporations would prefer to maintain labour until they have more visibility on how the market will shape up for the rest of the year, even if income or revenue has gone down for a while. (Very typical of Mauritius specially with government intervention to partly support labour costs).
The Immediate response approach:
The other side of the coin is taking immediate action. Some corporations, and possibly smaller ones may react quicker since their lifeline depends on this, and reduce costs, including labour costs quicker in line with the reduction of their revenues drop, so as to be able to simply live longer in times of uncertainty.
The forward-looking model:
This focusses on a more granular approach on HR with a forward-looking approach to dealing with HR in the business, namely that you focus to retain those employees who will make a difference for you in what you consider to be your business future. You may need more sales and marketing than support staff; you may need more accountability and more micromanagement for working from home teams than in normal times; and you may ultimately need more people who get things done, than those with degrees.
Step 2 – The new HR
Keith Cunningham[1], a known business guru looks at costs in terms of Fat, Muscle and Bone. Lose the fat, and keep, as much as possible muscle and bone for your business to prosper in the near future. If you cannot hold muscle, at least hold the bone, since without this, your business may never take off or take long before it gets to normal again.
But then again, for labour access, these times are like the opening of Fort Knox. You will have choice. You will have access to talent which was previously taken up by other larger businesses, and you will have the opportunity of getting people to work for you as independent contractors and other such methods which reduces your outlay of capital and commitment for the future.
One of the options to look at is whether you actually close a department and outsource the whole workload to external operators. Business process outsourcing. Even if you are not going down this route, looking at each department with a return on investment lens may be the best thing you have done in some time. Consider your marketing department as an example or even your advertising and marketing external suppliers. For how long have you been stagnant in agreeing on metrics like how many hits online, how many billboards views, radio plays, TV commercials per month with no. of people views etc. Nothing in all this is connected to the money. So why not focus on metrics which link to ROI? E.g. “I am going to require an ROI of x% to be able to retain your services or your employment sounds like ‘the’ new proposition”. If you are a listed company, be prepared to answer questions from activist shareholders or be sued if you are not that focused.
In all cases, it is suggested that its best to have a comprehensive plan and to enact restructuring in one swoop rather than a lot of small operations. Do consider planning your communication plan not only for workers or employees but also for the press, major clients and of course Government and the Board (depending on your size).
Consider mitigating actions the business can take too. Executive outplacements? In any case, announce early to help affected employees to search and move on, and show that the company is working to help those hit.
Step 3 – Managing the HR legal positions
For once, this may be a time when the HR function decisions, at least on policy should be considered a business risk issue rather than one where you need the certainty of an HR department. In short, the suggested position is to know what you want, and get HR to follow business decisions in the restructuring than to consider bickering on what the law says and what is allowable. You may have been told that there is a lot of grey areas, but that is not going to change with external advice. There are plenty of things on which there is no jurisprudence, and no one knows how courts can react, except for the usual suspicion that the employee needs to be protected and that’s where they will lead to. Let’s take 3 examples on this to make the point:
- The employee will say they there is a breach of contract since they could not legally be told to work from home; the business will say, it had no choice to protect the interest of its staff, as its obligation to provide a safe place of work;
- The employee will say their transport fees is an acquired right[2], on top of which the stay allowance needs to be paid if you want them to work from home[3]; the business may suggest that since the employee is not travelling there is no need for any transport to be paid;
- The employee may say that your policies are part of their employment contract if it is stated to be so as implied terms, whereas the business will argue that it is part of management discretion etc.
One thing however is clear, the more a business waits before taking a call on the future of its HR, the more it gives time to Unions, public opinion and government to shape us resistance to stop the business from making changes. The suggestion is therefore to assess HR issues as a business risk and get on with it.
The unfortunate part is the lack of mobility in HR. You may not want to downsize as much as change the number of people in each department. For many of us, having a bigger marketing and sales team may be more important as we focus on bringing in revenue, and support departments such as HR, admin or compliance become less important for the future of the business. So managing the shift in focus of the company and the consequent shift in HR staffing also needs its own plan and be part of a forward looking HR solution.
A last comment on the downsizing planning, if this affects your business. Do make sure to contain risks of discrimination during the downsizing exercise, as this may be the most recurrent initiative terminated employees can take action. Do have a plan and justifiable support for any endeavours taken.
Step 4 – Working during COVID
It looks more and more obvious that the Government cannot maintain a lockdown forever. Some say, 15thApril, for some its end of April and for some it is going to drag into May. We would suggest that it will depend between the trade-off of how much money we have, or have taken on loan to support the initiative, with how many deaths we can save. A tough call for the biggest company of all!
In any and all cases, except for that miraculous vaccine arrival, businesses will be expected to get back to work during the COVID pandemic. So do consider planning for this, with new processes, training, supervision, and risk management planning, and of course for risks of having to replace key personnel because of infection.
Good luck and safe planning.
[1] https://keystothevault.com/
[2] Maurel construction Ltee v Froget (2008) SCJ 164
[3] Rule 12 GN…
