Would You Layoff Staff During The Lockdown?

Would You Layoff Staff During The Lockdown? If Not, What Are Some Possible Solutions Entrepreneurs Can Take To Help Their Business Survive As Well As Protect Livelihoods? RUPESH PANDEY MD, RP Group Nepal

Would you layoff staff during the lockdown?

This is a question that I am being asked by people almost regularly these days. My answer to this is a resounding NO. For me, the business that I am doing is a people’s business. My staff is not just employees but like my family and one does not leave his family in distress. Times like these make you think to the core, to your true values and I think it is with those values that one should take such decisions and not by numbers and thinking about money only. Money is here today but can be gone tomorrow. The people in my life are the ones with whose support businessmen like me grow. This is a team effort. I might be the captain of this team but in the end, it’s the team that wins or loses. If I lay off my staff during these times, then as a captain, I might win, but that win will be a very short one. Having said that, the reality on the other side is that such lockdowns make it extremely difficult to survive and businesses have to take some harsh decisions. If I am considering my people as my team, then if needed (god forbid) I might have to think of asking for their support in taking no bonus or lower pay for some time till the difficult time ends but I won’t be laying them off unless until there are serious issues with their performance.

What are some possible solutions entrepreneurs can take to help their business survive as well as protect livelihoods?

This depends a lot on the nature of business but still a few things hold true for all. I think the first and foremost, businesses need to clearly understand their financials – where does the money come in and where does it go. They need to find ways to continue to earn through other mediums during these difficult times and they need to curtail their expenses to any extent possible. A few of the expenses could possibly be deferred and many could be avoided. A bigger business should look at halting all their capex during these times. As it is said, necessity is the mother of all inventions, businesses need to sit and think of ways in which they can still serve their customers under lockdown conditions. I have heard a few businesses taking orders for their goods via apps. Ideas like these need to be explored. Going digital wherever possible will surely help business in these tough times as well as in longer duration. For many businesses a lot of funds are stuck in accounts receivables and they should do whatever is in their power to start getting these funds, even if it needs to be discounted. Also sometimes, drastic times throw some smaller pockets of opportunity and one could focus on that even if for a short time to make ends meet. Like in the Corona times, I know a lot of smaller businesses shut their core business and started working on producing, supplying or trading in essential items like sanitisers, masks, PPE kits, safety gears, sanitisation etc.. Money from these small but surely needed ventures helps to tide over. One thing is clear these days– Businesses that are rigid and not willing to change with times and sometimes change very fast with times will not survive for very long. AJIT BARAL Co-founder, FinePrint

Would you layoff staff during the lockdown?

I would hate to lay off our staff during a financial crisis like the one we are witnessing now. Companies depend on the time, energy, creativity and hard work of its staff to grow and prosper. So it is morally wrong for any company to furlough or lay off its staff even at a time when the company is feeling the financial pinch. But if the financial strain is so severe that a company cannot remain afloat without sending some of its staff on unpaid leave or packing them off, then I think the company should be allowed to do so. That is, the company should only lay off its staff if not doing so would jeopardize its very existence. Once fired, a laid-off staff member can find another job sooner or later, but if a company goes bust, it can rarely rise up like the phoenix from the ashes.

What are some possible solutions entrepreneurs can take to help their business survive as well as protect livelihoods?

A company will be rewarded with greater loyalty from its employees if it came to their rescue in difficult times. So it is in the long-term interest of companies to play the role of saviour. But this is easier said than done in times like the current Covid-19 pandemic and every company has to think of innovative ways to help its employees without putting its existence at risk. One way could be a cut in salary with the agreement to refund the cut later when the company gets back to sound financial health. Another option could be to cut down working days so that none of its staff is rendered income-less. Still another option could be to furlough staff on a voluntary or need basis until the business bounces back. If none of these things is is possible, then the company should identify staff members most likely to be hit hardest by the loss of salary and provide them at least something to tide over the crisis. Protecting the livelihoods of one’s staff and one’s future in the time of a crisis is a tricky business. Those who can balance the two will come out stronger from the economical disasters unleashed by the coronavirus pandemic. ASHUTOSH TIWARI Managing Director, SAFAL Partners

Would you layoff staff during the lockdown?

Running various businesses as the CEO or equivalent for the past 14 years has taught me that two things matter most for business success: (a) luck, and (b) a relentless execution of the business fundamentals. Given Nepal’s unpredictability with regard to supply chains, cash collections, government policies, and general market volatilities, I have always advised businesses and our clients to create and keep a rainy-day fund. Such a fund helps them weather difficulties that can last anywhere from three to six months, if not more. I have practiced what I preached. As a result, for now, I do not see lay-offs at my firm. As it is, we try to keep a small but highly productive team.

What are some possible solutions entrepreneurs can take to help their business survive as well as protect livelihoods?

Looking ahead, structural unemployment or unemployment of skilled people for a long time kills confidence and morale. It  makes the overall economy unproductive, thereby making everyone poorer in the long run. On lay-offs, I have advised other companies to negotiate mutually agreeable pay-cuts, furloughs and other means of keeping employment on without being cut off from the jobs altogether. Lay-offs can be efficient for the firms in the short run, but costly in the long run for both the firms and the society. The economy loses because skilled people are idle and unproductive. And the firm loses because once a trained employee leaves, all the organisational knowledge, know-how, networks and connections also leave with that person. Contexts vary, and that means that not everybody finds this advice practical. This is understandable. This is where the government needs to look ahead for macroeconomic stability, and step in to help businesses with some payroll support so that long-term unemployment does not weaken the productive capacity of the economy.

SHAILENDRA RAJ GIRI Managing Director, merojob.com

Would you layoff staff during the lockdown?

Laying-off may not be required in my company until all the staff cooperates and collaboratively works to bring back the company in an original or better shape. If things go worst beyond the capacity of the company, we will be left with no option than to lay off on a lot wise gradually.

What are some possible solutions entrepreneurs can take to help their business survive as well as protect livelihoods?

Leaders flourish in the time of crisis. This is also an opportunity for entrepreneurs to take a corrective action, re-align the business, innovate new product/services as per the possible new-normal, engage employees for learning and creativity, learn new essential skills and expand knowledge to get prepared for worst situation than this. Survive and revive should be the common goal of employers and employees to protect livelihoods of each other. BASANT BAJRACHARYA Managing Director, Basanta Adventure

Would you layoff staff during the lockdown?

We are not laying off any staff but trying to pay them at least half of their salary until we start business.