As the coronavirus pandemic continues to affect the United Kingdom there are fears that the economy will suffer the largest single year deficit in peacetime.
The Office For Budget Responsibility predicts that the British economy will shrink by 35% in the second quarter of the year with around two million people facing unemployment as small businesses go under.
These stark warnings illustrate the challenge that small businesses are facing amid the Covid-19 crisis. However, there are small steps that companies may be able to take, as well as plans put in place by the government, in order to minimize the risk that they face.
Many businesses will already be aware of the government’s coronavirus furlough scheme, which applies to any employees who are temporarily sent home because there is no work available for them. ACAS explains that businesses must inform employees eligible for furlough and must be clear about exactly how much money they will receive during this time.
There must be no discrimination made regarding which employees are chosen, and certain rules apply about the during for which an employee can be furloughed. Employees who are furloughed will receive 80% of their salary up to £2,500 per month, which is paid for via government support.
There have also been several other government plans put in place to ease the pressure on businesses too. It was decided that IR35 reforms would be put off for another year, for instance, whilst the CBILS (Coronavirus Business Interruption Loan Scheme) provides financial support to SMEs whose cash flow has plummeted.
These government decisions may alleviate some of the pressure felt by SMEs, but what can they actually do in-house to help the situation? It is important to run regular risk assessments to understand the extent to which the pandemic will hurt business, first of all. After that, businesses should ensure that the cash position of the business is kept under constant review to determine the day-to-day impact.
All the while, you should make sure that staff are remaining as productive as possible with capacity checks, project management systems and regular video conferencing. This level of contact should also be maintained with suppliers and clients too so that you understand their circumstances as well as your own.
During all of this, it is crucial that businesses continue to support their employees as much as possible too. Cash flow may be struggling and profits may be looking more alarming amid the pandemic, but staff should remain at the heart of the business.
Otherwise, productivity is bound to drop putting an even greater strain on your business. Furthermore, once life has returned to normal, companies could be facing another crisis as staff seek new employment.
HR teams should follow strict guidance to deal with whatever they might encounter with Covid-19, whether it is knowing their employee’s rights during school closures or what to do if a staff member is showing symptoms.