This year left several businesses fighting to stay afloat. Across the UK, employers continue to face a growing predicament amidst the uncertainty of the pandemic and a challenging economic climate.
While employers have responsibilities and a moral duty to protect the livelihoods of their people and support their changing needs, the financial pressures of payroll in the coming months will continue to be a key talking point.
The central dilemma most hospitality business owners faced this year is whether to keep staff on, furlough them or take them off the payroll completely.
The 'Should They Stay or Should They Go' Dilemma
Being forced to let an employee go is filled with stress and anxiety under normal circumstances, and made even worse during a crisis. As a manager, you don’t want to add to their stress by depriving them of their jobs, but sometimes you’re left with no other choice.
The economic support the Furlough Scheme offered to local businesses was an important success factor in the early months of the pandemic. By paying 80% of furloughed workers’ salaries (for up to £2,500 a month), managers could minimise their teams to keep the company afloat without taking away some employees’ entire livelihood. In light of England’s second lockdown in October, the government decided to extend the furlough scheme to March 2021 to help businesses cope.
The Furlough Scheme was effective to a degree. However, the unrelenting impact of COVID-19 and the costs associated with partial furlough agreements means it’s harder than ever for business owners to justify salaries for employees that the business may not have an immediate need for.
Responsibilities & Dilemmas Employers Face
Aside from the dreaded issue of putting someone on furlough, or having to lay them off completely, hospitality employers faced countless other moral dilemmas because of the virus.
(Employers have been faced with challenges on how to sustain their business during COVID-19.)
Getting Things Done While Offering Support
Trying to operate "business as usual" during a crisis is one of the most challenging jobs of a business leader. Part of an employer’s responsibilities to employees is to offer support and guidance and help them feel secure in tough situations. At the same time, managers have to keep the business going efficiently with everyone pulling their weight.
When faced with a crisis, it’s crucial to understand employees' anxieties - you have to help them rebuild their confidence before you can expect them to perform to their best ability.
More Questions, Fewer Answers
This year, employers had to answer an increasing number of questions from staff looking to understand how any business decisions will affect their employment status. Naturally, employees expect employers to provide answers, but with COVID-19 making business operations unpredictable, many business managers fail to do so.
Employers had to accept that they cannot always provide answers, so finding alternative ways to reassure their staff proved essential. The best way is to aim for consistent, honest, and adaptive communication to answer questions as soon as you have the information.
New Business Models
COVID-19 forced many businesses to alter their business models. Commercial airlines started offering cargo flights, restaurants began selling groceries, and stores expanded their digital platforms – all to try to stay afloat when normal operations weren’t possible.
Pivoting a business model improves cash flow but could cause employment disruptions as you may require personnel with different expertise, making some existing positions redundant. You won’t need waiting staff if your restaurant moves to 100% takeaway service, or shop assistants if you close your stores to transfer your brand online.
However, it’s crucial to plan for the length of this business model alteration. Is it a permanent shift or a temporary one until you can resume business as usual? If you need to rehire staff when restrictions ease perhaps consider training them to do the temporary jobs instead of hiring recruits.
Maintaining Your Reputation
Employers have the right to make cuts where necessary to favour the business, but ruthlessly letting go of staff can cause severe damage to your company’s reputation and the community spirit. Since 67% of young people want brands to keep them informed on how they’re supporting employees, they may choose your competitor over you.
To avoid damaging your brand’s reputation, think about future-proofing your business from both a financial and social standpoint.
(When making difficult decisions, always consider the social reprecussions of your choices in order to maintain your buisness's reputation.)
How to Set Your Business Up for Success in the New Year & Beyond
After a year full of uncertainty, now is the perfect time to reflect on what we learned in 2020 and prepare for 2021. As you look back on your professional experiences over the past year, think about how you can use the lessons you learned to future-proof your business.
It’s better to start planning sooner rather than later to help your employees focus on more long-term goals instead of the challenges you face now. However, it’s vital to remain realistic and not set the bar too high for next year.
Do a thorough SWOT (strengths, weaknesses, opportunities and threats) analysis to identify business opportunities or threats, where you’re performing well, and where there’s room for improvement. Also, keep in mind that while you may not need some staff now, you might do soon if the government restrictions change.
Therefore, it’s smart to think about how you can keep as many staff members as possible to save you from needing to recruit new employees later. Could they help renovate your premises or work on your social media presence?
Recruiting and training new staff is costly and time-consuming so think of other ways you could put your team to good use until business picks up again.
Help Sustain Your Business
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