Facebook Live Event 1: Managing Your Business Through A Crisis

Published March 31, 2020 Views: 7

19/03/20

Employsure founder and MD Ed Mallett discusses his own challenges as a business owner during the COVID-19 outbreak, and outlines ways of thinking clearly and strategically under pressure. He also answers commonly asked questions from employers regarding issues like employee leave, pay entitlements, flexible working arrangements, and quarantine.

To help your business navigate the COVID-19 crisis Employsure’s founder and Managing Director Ed Mallett is hosting live events on Facebook, to discuss the latest events, burning questions Employsure’s clients are asking and to offer business and management tips. At the end of every session, Ed will answer a few questions that come through the comment section.

Transcript

  • Facebook Live Event 1: Managing Your Business Through A Crisis

    Ed: I’m the managing director and founder of a company called Employsure, which helps small businesses with exactly the kind of issues that you’re facing, particularly as it relates to your staff. So that is dealing with how to treat your staff fairly through this crisis and also safely looking at their health and safety. And we deal with that day-to-day for thousands of small businesses. Indeed, outside my door here behind me is our advice team in Sydney.

    We’ve got advice teams across Australia, also down in Auckland, who today will help about 2,500 small businesses, answering questions about the COVID crisis. And it occurred to me seeing how busy we’ve been with that, but also because, like a lot of you guys, I’m a manager and a business owner. And I’m trying to suss out exactly what to be doing myself through this. These are challenging and new times. And I’m trying to go through the planning process as well. And it struck me that my own experiences in that combined with our expertise on how to manage your staff might be of interest to you, guys. And please let us know through the comments if it is striking a chord or otherwise. And we’ll see how we go.
    I wanna stress so before I launch into this that I don’t claim to be a management expert. I set up the business 10 years ago, and I’ve been learning all the way as so many small business owners are. And the experiences I’m gonna share here are, I suppose, the real ones of me in real time working through this crisis as well. I am an expert, though, in employment relations. And to that end, if you’ve got any questions at the end of this, please type them up. We’re fielding them here. And I’ll go through answering some of those questions. At the end of this session, see if I can help you with your specific problems that you might be facing at the moment.

    So, I mentioned, I’ve been managing through the crisis here. And the way I’ve been looking at it is this, is I’ve broken it down into four stages. And the reason I’m doing that is to try and follow this mantra that I like, which is T-CUP, which stands for thinking clearly under pressure. Another way of…or another phrase that’s relevant here, which is that worrying just isn’t thinking. So sitting here as a manager and worrying about the crisis is not gonna do me any good. It’s not going to do those that work for the business any good. And I’ve got responsibilities to them, to make sure I manage as successfully as I can through this crisis.

    So I’m trying hard to think clearly under pressure. And what I’ve done to achieve that is I started off by saying, “Look, what is the purpose of what I’m trying to achieve here?” And the answer to that is pretty simple. It is pretty much the same as it is for all of you that are watching this, which is that you wanna keep your business running as normally as possible throughout the COVID crisis. So, I stress throughout because it’s not just about today or what happens tomorrow, if you’re thinking like that, you’re stuck in the drama and the situation, you need to be thinking about next week, next month, next year. What does it mean for you?

    And that’s what I’ve been trying to go through myself. So that’s the purpose. That’s, if you like, why I needed to sit down and get back to some clear thinking. The strategy that I’m applying is also pretty simple. And I’d encourage you all to follow this as well. It’s a broad strategy, and that is that my job as the managing director of a business is to manage risk in the business, which, in these circumstances, means as simply as this, that you need to prepare for the worst and hope for the best.

    You really need to be thinking today about the very worst things that could happen, not what your prime minister might have said yesterday, not what you heard from your friends, but what is really the worst case scenario in order that you can start planning. And in that way, you should have a sequence of things that you’re going through, a sequence of stages, I’m calling them, in order to give your business the best chance of surviving in order to consequently help your employees and maintain your business success.

    So as I mentioned, there are four stages. The first stage I’m gonna call stage zero, actually, this is kind of before you get going. And you may not be there by virtue of the fact that you’re bothering to listen to this, but you may be. I was there last Thursday, I reckon. I was at stage zero. And what that meant for me is I’m still shaking hands. I’m still talking to people cynically, saying, “You know what? This is overblown. Most people don’t get that sick anyway, what does it matter? Let’s just get on with life.” And I know a lot of people are still there. But last Friday, I had a sort of a penny drop moment.

    And if you guys haven’t had this yet, I’d encourage you to look at it this way, that a friend who runs a small business said to me, “Why are you thinking like that? Your job is to manage risk in your business. You’re never gonna get in trouble for over managing that risk. But you will, you can get caught out by under managing it, under egging what’s going on today. You should be preparing for the worst and hoping for the best.” And that, for me, was a massive penny drop moment. It didn’t really matter what I thought are of crisis, what I think of the health risks, I’m not an expert in any way. What really matters is what everyone else around us thinks, what the governments are thinking, and it’s fairly plain by looking at any level of news that there is more to come from today. And there certainly was when the penny dropped for me on Friday and I started putting in place the first stage of our planning.

    So that takes me onto stage one, which I’m gonna call the crisis stage. So this is the stage that if you’re not in stage zero, which I think a lot of small business owners are still at stage zero, to be honest, I hope that they quickly get past that, and at least move into stage one, which is crisis. Now, stage one involves going through what the government requirements are and how they intersect, I suppose, with your business needs. So right now, in Australia and New Zealand, there’s not a requirement, for example, to shut an office, or a cafe, or a shop.

    There are some rules around self-isolation, depending on whether you’ve had contact with people in COVID. I’d encourage you all to stay abreast of your local department of health updates on that so you understand exactly how they intersect with your business. And the approach that I took is that I’ve got to run the business in accordance with that guidance as a minimum. Essentially, the government is saying to me, “This is what safety looks like at the moment.” If you’re not doing that, then you’re not treating your staff safely, which, as we all know, is a basic obligation of us as an employer, we’ve got to make sure that we’re treating our staff safely.

    So I looked at what those requirements were. I then looked at the intersection of my business needs. So looking on a fairly basic sort of supply and demand level, if you like, what I realized was that there was increasing demand for our services, i.e., people were ringing us a lot, asking us questions about how to manage their staff through COVID. And I recognized that what I needed to do was maintain my workforce to answer those questions. So the immediate thing that occurred to me in looking at those two problems was that I had to minimize the chance of my workforce causing each other to get sick.

    I’m not a health expert, again, but it’s fairly logical that if you put all of your workforce in one place, the likelihood of them getting sick, as a consequence, from one another is higher. So I took the decision on Friday. I took the decision on Friday to send people home as far as I could, except for our two core groups of frontline staff, which are those staff that are serving our clients day-to-day. We wanted them to be in the office this week, so that we could continue to understand the fluctuations in demand for the service. There was a massive spike in service need on Monday, for example. Had everyone been at home, it could have caused real shocks through the system. We needed to manage that, manage those responses to our clients to make sure we were doing as we promised to them.

    So I sent the first wave of people home on Friday, that was our accounting teams and so forth. And then over the course of this week, we’re gently feeding those other teams back home as well. So that by the end of this week, everyone should be at home. Now what are the challenges in doing that is, of course, sort of rumor and innuendo and the business not knowing what’s going on or why it’s going on and being bombarded with information. So I’ve done my best as a leader in the business to really over communicate with people.

    So I send out a post every single day to all of our staff, reiterating why we’re doing things. “We’re sending you home, not because Employsure has a problem per se with any health risks, but because we wanna minimize the chance of you catching COVID-19 at work, and therefore not being able to service our clients. We wanna protect your health and safety. That’s our obligation as an employer. We’re actually doing more than the government’s requiring from us at the moment.”
    So that was the crisis stage for me. The crisis state for our clients, which is what’s fueling most of these calls at the moment, is very, very wide ranging. It may be a slow down in business and you’re worried about having to terminate casual contracts, for example. What does that mean? Do I owe them any money? Someone’s rung up and said that they think that they might have had contact with someone who’s got COVID-19. What are my obligations about them coming to work? Someone’s already overseas. What happens when they get back and they get self-isolated and quarantined for 14 days? Do I have to pay them? What if the government shuts us down tomorrow? What if schools shut and, consequently, someone rings me and says, “I’ve got childcare responsibilities? I can’t come into work.” What are your obligations as an employer there? The list goes on. There are a myriad of questions as to what to do in stage one, the crisis stage. And those are the sort of things that are fueling those 2,500 odd calls that we’re getting outside here today.

    Stage one. So that’s crisis is stuck in the thick of it there. And my litmus test to you, guys, is that if you’re thinking properly you’re planning well, you should be just coming out of stage one. Now you should be pretty comfortable with the different scenarios that are playing out what that means to your business and your staff.

    Stage two is where I’d hope you’re starting to think, which is really scenario planning. And I’m gonna call it the planning stage. So you should be looking at every eventuality here, coming back to that strategy of plan for the worst and hope for the best. Plan for the worst, hope for the best in terms of scenario strategizing, I don’t have a crystal ball. All I can say is that we here are starting to say, “Look, what happens if over the next month, businesses are shut down, and that means we can’t do any new business, for example, what happens for us if, bearing in mind our clients are small businesses, they’re struggling to carry on paying for our services. How do we respond to that? What happens if that lasts for three months? What happens if it’s six months? What happens if it’s a year or more?”

    And we’re starting to do the financial modeling for that to understand exactly what that means, because that will then color how we plan day-to-day. What are the sort of costs that we might have to cut? Now fairly obvious cost that may come to bear for a lot of us is the question of how you manage your staff. That doesn’t just mean redundancy. It may well mean that and I’m already seeing it here on the floor, that the tone of the conversations are starting to change from stage one crisis to stage two planning, which means I’ve got a decrease in business already.

    I can’t afford to keep this person on, what do I do? What’s the process for that? Do I owe them redundancy pay? How do I consult with them on that? What are my obligations in a crisis? Things are moving so quickly. But it’s not just redundancy. Maybe it’s looking at job shares for people, maybe it’s looking at moving people to part-time work, maybe in circumstances where the government shuts businesses down, then there is a situation where you could stand people down without pay. Maybe you don’t want to do that, maybe you wanna carry on paying them, and you want to speak to us about how you do that and reprioritize. Again, there’s a myriad of questions that you could be going through.
    There are some really difficult questions that are gonna arise there, guys. Again, I don’t have a crystal ball. But I can tell you now already small businesses are contacting us about question marks around redundancy. If you’re not thinking about that today, or at least in the next few days and planning for those eventual scenarios, what will happen is that that will hit you like a train, and you’ll be left with a group of staff that you then have to go through a redundancy process, where if you’re not planning forward, and that will cause burning of cash whilst you’re having to catch your strategy is having to catch up with the circumstances that are around you. Your strategy as a business should be ahead of the circumstances around us. I think we all know, frankly speaking, that things are gonna get worse before they get better, they will get better, but they’re gonna get worse before they get better. What worse means you need to work out. So that’s stage two. The final stage before we turn to some questions, which I can see are coming through.

    The final stage is this, it’s opportunity, and that might be really hard to think about at the moment. But really good entrepreneurs, I think, are gonna be starting to look at that over the coming days. And there are ranges of opportunities here. So I’ll give you one that we’re experiencing already, that having had so many of our workforce at home over the last few days, productivity in various departments has actually gone up, which inevitably leads me to question, why have we got office spaces and so forth? Could we reduce those and have a greater portion of people working from home? We’re doing more video activity with our staff and clients and ever before.

    And is that a sufficient replacement to face-to-face visits now? And we’ll start to look at those questions is, suppose they’re cost saving opportunities. But you should also be looking at the fact that when we come out of this crisis, I will stress when, not if, when we come out of this crisis, you wanna be best placed to be the business that really takes off at that point. And that looks like getting organized, frankly, it means from an employment relations perspective, looking at ways in which you perhaps weren’t managing that risk brilliantly at this stage.

    Were you ready? Were you ready for the crisis? It’s very hard to be ready for something of this scale in true terms. But did you at least have a contingency plan? Did you understand how to manage your staff through this? If not, why not? What are you gonna do better next time? There’s already talk about this being an annual illness. It can be…it might continue for us. How are we gonna change to the new norm? How are you gonna make sure that you’re the business as well prepared for this, when you look at maybe your competitors who aren’t?
    So, guys, those are the four stages. I stress again that this isn’t stuff from a textbook. This is us working through this live as well. That’s what I’m doing to try and avoid worrying, not thinking. Try and think clearly under pressure, T-CUP, try and communicating to my staff so that they know what’s going on and they don’t go into the kind of panic that we’re seeing in the public at the moment. I think a lot of the panic is simply caused by poorer forms of communication, through governments and so forth. Communicate as much as you can with your staff. Be transparent, honest. Everyone understands that we’re in really new and uncharted waters, but don’t go into your shell with it. Keep talking to them as much as you can. Stages just for reference again, stage zero denial. Please don’t be in there any longer. Get out of there because this is happening, guys.

    Stage one, make sure that you are dealing with current crisis situations. What happens if school shut over the next few days? What are you gonna do about it? What your staff needs and so forth? Stage two, planning, looking forward over the next weeks and months as to what your costs are and what you might need to do. And then stage three, the final stage, is looking for opportunity going forward. So, guys, those are some messages from me. I hope, as I say, it’s not meant to be instructive.

    It’s just an insight into my world and what I’m having to deal with at the moment, and I thought it might be useful to people. If it has been useful, we’ll do it again. I’ll let you know how we’re going from the inside here. I’d love to hear from business owners about what they’re doing. I’d love to learn from them as well, if there’s things that I’m missing, that I could be doing, not just relating to our staff, but businesses generally, this would be a great time to share information in the business community. So over to a few question. I can see a few flowing through on here. I’ll do as I can to answer any of those. I’ve got a couple of guys here who are just gonna read them out to me. Stu, what have you got for me?
    Stu: Yeah, I’ll try and give you questions that sum up the general tone coming through. This is a major one. If I do have to stand down any employees, how do I do it? And how long should I stand them down for?

    Ed: So there’s a precursor question to that is, “Are you allowed to stand down your employees?” So assuming we’re talking Australia, not New Zealand for a moment, there’s a section in the Fair Work Act that does permit stand down where there’s a stoppage of work. Now you choosing to slow down your work or they’re being a slow down because let’s say, for example, you’re in a retail or hospitality and the footfall is lowered.

    That doesn’t equal a stoppage of work, but if the government came in and said all cafes are closed, that does look like a stoppage of work for which you could stand down people under the Fair Work Act. So that’s an example of the trickiness of this, like, don’t confuse the ability to stand down as a tool that you can use just because unfortunately business isn’t going as you’d planned. That’s quite a different thing. That’s really when you’re starting to look at cost cutting and potentially redundancies.
    Stu: Next question, I have a retail shop and we are experiencing a significant drop in sales due to the coronavirus. If I have to cut my staff hours or even lay them off until business picks up, what are my legal rights and what is the best practice?

    Ed: I’m gonna try and not answer all of these questions with depends. I know how frustrating that is to hear on when you’re getting advice. The situation there, though, is this. You’ll need to look at whether your staff are casual, part-time, full-time, and what are your obligations to them. There’s also be careful with casuals as well, if they’re regular and systematic casuals. They may have come in the eyes of the law to be looked at as being part-time or full-time. But the question then arises as to whether you can cut their hours.

    Typically with casuals you can without financial consequences, but you need to check awards and any enterprise agreements before you do. Full-time and part-time staff, you’d need to be speaking to them about varying their contracts as a potential alternative to more permanent reduction in hours, including redundancies. So redundancies become quite a last resort, and dealing with redundancies is something that any of us as business owners don’t want to do. No one started the business to make people redundant. But you will also have some difficult decisions over the coming weeks and months that mean you might have to do things like that.
    Stu: Interesting question, what does a government shutdown actually look like?

    Ed: No one knows. I can only reiterate that strategy that we’re going for, which is that we’re preparing for the worst. So in our view, and I don’t say this to scaremonger, we’re saying, “What does the world look like in which we are told that we’re not allowed to operate in our offices?” So we’re preparing for that, for example. And what does the world look like in which big volumes of our clients. Let’s look, for example, at the childcare centers are closed down. What does that mean for their funding and their ability to continue to engage us?

    Those are the sorts of questions that you’d need to ask in any government shutdown. But we don’t know yet. What a government shutdown might look like. It could be as draconian as you’re seeing in places like France at the moment. The UK is less than that, businesses is, still operating but businesses like pubs and hotels are really suffering in the UK because that people are being discouraged from going to those places at this time. So there’s a whole world of variants there that you just really need to prepare for the worst and hope for the best.
    Stu: Do you think this will impact all sizes of business, both small and large?

    Ed: Yes, frankly, if you asked me last Thursday, I was still at stage zero, denial. But it’s difficult if you think of any industry, to think of an industry that’s going to really get through this without some level of business impact. I’m sure if we thought hard enough, there will be businesses that might do well out of this. So I met, actually, a prospective client yesterday who’s in the contract catering, cleaning, and security business is of the belief that, again, they’re gonna carry on growing through this. Great if they do, really pleased for them. The vast majority of us are not gonna have that experience.

    Stu: This is a real topical called one, Ed. What if schools actually do end up being closed and an employee has to work from home, can they reasonably be expected to care for children and work from home? At the same time, how do you deal with this situation?

    Ed: Really good question. I think that’s really is, isn’t it? Just on that list, so the way it works from a technical standpoint is this, imagine the government close schools tomorrow. That’s arguably an emergency stoppage which…or an emergency which creates the right to carer’s leave if your employees are entitled to carer’s leave and have got it accrued. If they do, they’re allowed to care for their children and there’s a requirement to pay for them to do so up to a period of 10 days, or as long as that emergency lasts. So the gray area on that is, when does a school closure stop being an emergency? After day one we all know it’s happening. So there’s seems to be an incumbency on the employees to start finding alternative arrangements, at which stage you might be saying to them, “Look, you’re not on carer’s leave anymore, you’re required to come back to work.”

    That wasn’t quite your question. Your question was, what about caring for your child and working from home, which is also a valid second part of that question. So we’ve toyed with that internally here. Our first position was that we were gonna go to all of our staff and say, “If you’re working from home and required care for your children, this isn’t what the law says. But our policy is, if your child is under 10, you can’t do that because you can’t realistically work and care for your child.” And we debated it quite hard here. There was a view that we just need to say to our employees, “Look you’re adults, you need to bear in mind, if you can do your job that we’re asking you to do and care for your child home, great. If you can’t, and you let me to let us know and we can discuss the possibility of carer’s leave or other forms of leave during this time.”
    Stu: What if a business can actually pay their employees short fees?

    Ed: Really good question and one that we’re exploring at the moment. Look, we want to help small business, fundamentally, that’s what we’re about. We’re very well aware that over the coming weeks and months, there will be plenty of our clients who are really going through difficult times. We’ve got a range of options for those clients, we wanna carry on helping them. So what we don’t want to do is say, “You don’t pay our fees, and therefore you’re not gonna get help through these challenges.” So we’re already talking through our client experience team, about things like payment holidays. So I’d encourage any clients that have got problems in that regard, to give us a call, and we’ll talk to them constructively, about how we can continue to help them with these pressing issues, whilst also assisting them through any financial troubles they’ve got.

    Stu: This one’s coming through a lot in some form or another, how do redundancies actually work?

    Ed: Very good question again. Slight differences between Australia and New Zealand to be aware of and indeed need to get specific advice for the circumstances. But I’ll give you a general overview. Redundancies aren’t as simple as just walking into your employees or employee and saying, “I’m sorry, downturn in work. You’re off.” And there are consequences, oh, sorry, there are pre-emptory things that you need to do. So, for example, there’s an obligation to sit down and consult with staff members that might be at risk of redundancy, you’re under an obligation to consider alternatives to redundancy. So that might include that staff member taking reduced hours or reduced pay. And you’ve got to ask them for their opinion on that which we find employers quite often find a bit baffling that it’s their business that they’re trying to run.

    Why do they need to check how they’re meant to run that? But that’s the obligation under the law to consult their staff. And then to go through a fair process where you actually meet with the employee and have those discussions. You don’t just send them a text message, give them a call. I want you to actually meeting with your employees to speak to them about this and taking care. Now, I mentioned earlier, if you’re not planning, the risk is that you’ve got to go through those processes at a time when, you know, inevitably that you’ve got to cut costs. And it may be that you’re paying employees through a consultation period. When, if you’d been planning today, then you could have saved that time and money by starting to consult at an earlier time.
    Stu: Here’s a hot question from the person who works in manufacturing is a manufacturer. What if there is a case of COVID-19 in my workplace and everyone must self-isolate for 14 days, would this be classed as a stoppage in which the staff could be stood down?

    Ed: So I think first things first, there’s a bit of confusion around what the government is actually saying on that. So in Australia, that’s not the government’s advice. The government advises that, if someone has COVID-19, you stand them down and they go home under sick leave. And then you essentially wait and see. So a lot of people are confusing that and thinking everything must stop immediately. From there you’re looking for symptoms in other staff members. And I know some companies have gone well above the government advice on this and said that they’ll shut premises down if someone shows flu-like symptoms, let alone having a confirmed case of COVID-19. I’d urge you all to look carefully at government advice on this before you do that, because you could be unnecessarily interrupting your business here.

    Let’s look at the practical realities of this. If someone presents to you with flu-like symptoms today, you send them home. Such are the cues on testing at the moment that it may be weeks before you actually hear back as to whether they’ve got COVID or not. So if you shut your office or workplace facility down, manufacturing plant down today, just because someone felt a bit sick, you may not find out for weeks whether that is a confirmed case of COVID or not. So be very careful on this, follow the government advice, go straight to the source on it, don’t just take my word for it go, and have a look at the government advice through your department of health. They’re very clear on it and intercept that with your own business strategy that’s your duty as a business manager.
    Stu: This situation is clearly changing rapidly.

    Ed: Yep.

    Stu: How rapidly? What should we expect?

    Ed: I like to put it this way. I was at stage zero last Thursday. Today I’m living this every day losing sleep just as people watching this will be about what my obligations and what the outcomes of this will be. I think it’s gonna be more rapid than any of us are expecting is the honest truth. I haven’t yet seen a piece of news or media that I used to doubt and is now starting to actually play out in business. So prepare for the worst and hope for the best. Don’t underegg at this stage. But don’t panic. Think clearly under pressure. Do this with planning. There’s a very, very big difference between panicking and thinking the worst all the time and not doing anything about it. But systematically, looking at how you can be a better business manager through this crisis.

    So, guys, I can see that there’s quite a few questions still coming through. Really pleased that this is highlighting challenges of people that we can help with. What I’m gonna do is, I’m gonna stop the live stream now, but we’re gonna carry on answering individually each of those questions as they come through. And we’ll pause and take stock of this if it’s been useful to people. We’ll set this up regularly. And we’ll keep you posted on our Facebook page and over social media as to when we’re doing it. And I’ll give you a live insight into how things are going for me. And letting you know how I’m going through each of those stages, I’m at the end of stage one now, starting to look at my planning processes as I mentioned, and I can let you know a bit more about stage two as we come into the coming days and weeks.
    Stu: Ed, just before you go, can you possibly remind people that we do have a resource hub, employsure.com.au/coronavirus?

    Ed: Absolutely. So, you might have heard that employsure.com.au/coronavirus. There’s free information there guys, including guides, downloads that you can use in your workplaces, free for you to use, please go ahead. I stress that we really wanna be helping small businesses at this time and I hope that, like I say, that you guys can perhaps give me some feedback on this as to how we can be better at that. Thank you very much, everyone. I’ve really enjoyed that and I hope you found it useful to a degree. Cheers.

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