Business after Lockdown: Where do we go from here?

BUSINESS AFTER LOCKDOWN: Where do we go from here?

With a third of the world now in some form of government lockdown, many organisations are starting to plan for “Business after Lockdown”.

Key to business planning is understanding the timeline and triggers for an end to lock down and the recovery of both social and economic activity. Whilst clearly the government is exploring a range of options, they are less forthcoming about what they are and when they might be in place. The absence of clarity creates issues for businesses trying to navigate their way out of crisis whilst avoiding bankruptcy.

Viral Pandemic: a crisis without precedent in the modern world

The reality is that we have never had such a large-scale viral pandemic and there is no precedent on how to act. At this point, no-one can predict or guarantee how and when we in the UK will emerge from this crisis, but it is important for CEO’s and business leaders to develop multiple plans based on different scenarios that can be activated immediately as the picture becomes clearer. Planning is more important now than ever before. Many businesses have effectively been put on “life support” through the UK Governments “furloughing” scheme. Once the Government withdraws the scheme, businesses need to be ready to implement their “recovery” plans rapidly or run the risk of bankruptcy.

So far only one country has emerged from a lockdown, Wuhan in china just announced that after 11 weeks the lockdown is coming to an end. Analysts have stated that within the UK the infection rate (“R nought”) is about 2.6 pre-lockdown and will potentially go down to .62 if people comply with the rules. If R0 goes below 1 then the disease will eventually die out (assuming borders are controlled) but this would likely require the lockdown to continue for 12 weeks (in line with China).

UK Lockdown: one…two…three months

Whilst the UK government won’t speculate, the 12 weeks/3-month period seems to be a recurring theme with those who are at most risk told that they will have to remain inside for 12 weeks and the government furloughing scheme initially fixed for 3 months. Other European countries have either extended their lockdown or will be slightly relaxed the rules (though most of these countries have often had tougher restrictions than the UK).

The risk of course is that if you end the lockdown too soon, you end up where you started; exponential increases in spread, a collapsing healthcare system and a huge body count. However, this must be balanced against social unrest, non-compliance and huge economic damage. Many governments are between a rock and hard place and are placing their hope on science to find a way forward.

Whilst this weekend the UK is likely to see some positive impact from the 3 weeks spent on lockdown, it is very unlikely the government will bring the lockdown to an end and Churchill’s words Now this is not the end. It is not even the beginning of the end. but it is, perhaps, the end of the beginning.” are perhaps as relevant today as they were in 1942;

There are possible solutions, but many aren’t ready, and all come with many unknown variables;

  1. Vaccine – This is unlikely to be ready for 12+ months

  2. Anti-virals – Leveraging existing antivirals that could significantly reduce mortality rates and turn a deadly disease into something more akin to the flu. Whilst trials are already in progress, it is likely that it will be month or more before we know if any prove to be effective.

  3. Antigen tests: Tests that confirm if you have Covid-19 would enable the government to perform community testing and to target lockdowns on specific geographical areas. However, we will not get to 100,000 tests a day until the end of April. If new tests could be available that were “instant” (it takes at least 24 hours currently) and self-administered then restaurants/airports could open to customers who test negative at point of entry, but again this technology is not available yet.

  4. Antibody tests: These test if a person has had Covid-19. The government is actively exploring this option as it would potentially mean that those who test positive could be provided with a certificate and again able to work/visit restaurants and other establishments. However, so far, these tests are too unreliable to be distributed and we don’t yet know the degree of immunity – and how long it last for – in patients who have had Coronavirus.

All the above options have merit and potential but unfortunately uncertainty and – as of now – lack availability. Until these become real the government has limited options; a) Tweaking the lockdown in combination with additional measures (face masks mandated, 2 metre distancing in the workplace, mandatory alcohol gel stations), b) Progressive Herd Immunity (relaxing and then tightening lockdown restrictions to ensure that the NHS is not overloaded) or c) maintain the lockdown until the infection rate falls to such a low level that it can revert to its “track and trace” containment strategy.  

Survival after ‘Life Support’

Whilst there is significant uncertainty on how or when we will emerge, the above demonstrates that many businesses are likely to remain on “life support” for perhaps 3 months or more. But the critical business planning is what happens after lockdown. Many businesses are only surviving due to the governments furloughing scheme, but what happens when the government withdraw the scheme?

Suddenly the cash-flow issues that were “just under control” during lockdown will re-emerge again. For those businesses without a plan, they will be firefighting and without the cash to buy time to come up with an effective plan. Hence the essential need to plan for recovery and plan NOW.

For many businesses the headache will come with remobilisation of staff and the associated costs.
Every business is different, but key considerations are;

  1. Training – if colleagues have been furloughed for 3 months, what refresher training will they require?
  2. Depending how the recovery is achieved, there are likely to be changes made to the workplace (distancing), facilities (High Hygiene), and processes such as Certification checks (If Antigen tests used) and/or onsite testing.
  3. Staffing and Scheduling. There may be a need for redundancies, part time working, phased return or annualised hours depending on the specifics of the business. This is not a simple task and requires effective planning and scheduling. Reducing the headcount or hours requires effective re-rostering to ensure the business can still serve its customers. Annualised Hours is another popular solution. It does not reduce the salary of the employee but enables the employer to vary the hours worked over the year. This enables the employer to ramp up/down the hours as the recovery takes hold.
  4. There are many tools and technologies available which could be deployed to address these issues and enable rapid mobilisation.

HFX is a market leader in Cloud workforce management solutions with a wide range of modules including:  Time & Attendance, Flexitime, Annualised Hours, Home Worker, Access Control, Visitors’ Registration, Workforce Optimisation.

Visit our website www.hfx.co.uk or call us on 0333 447872 for more information

Dear Annualised Hours

Dear Annualised Hours – Happy Valentines Day

Valentine’s day marks the first of many calendar events of the year often bursting with merchandise to loosen the cash from our wallet. After Valentine’s, will be Easter, then Halloween and Christmas. Each dispensing perishable and non-perishable goods that need to be produced and delivered on time.

Whilst we take it for granted that the shops will be stocked full to brimming with our seasonal goodies, the reality is that myriad of UK companies will be working overtime just in planning the resources required to deliver the goods we demand to celebrate the occasion.

For some companies, these events are where up to 50% or more of their profits are made. Getting it wrong can even lead some into bankruptcy. For the seasonal businesses, there is no option to have a fixed level of resources no more than they would have a warehouse full of Easter eggs all year round.

Planning is essential both to meet demand and stay profitable during the quieter period of the year.

Companies have deployed various approaches to meet variable demand and cope with the “peaks and troughs”;

Some employ seasonal workers (though this is getting harder post-Brexit) or agency workers (again rules around agency workers have recently become more complex) and a few have tried Zero Hours contracts though these often don’t yield the expected results. There is also the traditional overtime approach but is much more expensive for low margin businesses.

One very successful model is Annualised Hours. This is where workers are contracted to do a fixed number of hours in a year (e.g. 1900) but the actual hours deployed in any period will vary based on business demand.

Thus, during quiet business periods staff might only work 100 hours a month and in busy periods 250 hours per month. The employee still gets paid the same each month regardless of the hours worked (up to the annual contract) but the company can align those resources to seasonal demand.

This approach has many advantages. The company can leverage its skilled, experienced and committed workforce rather than rely on the availability of agency/seasonal workers whose loyalty and skills can often be variable.

However, it does require careful planning. Annualised Hour workers are guaranteed the fixed number of hours whether they are used or not, so management need insight not just into team hours, but each individual to ensure some are not over-deployed resulting in a protracted break whilst other colleagues have a positive balance that could not be deployed before the end of the Annualised period (resulting in wasted hours).

It was these additional management overheads that historically slowed the widespread adoption of Annualised Hours, but with the introduction of cloud-based Rostering systems with Annualised Hours calculations, there is now a compelling reason to adopt this approach to address seasonal and variable business demands.

With Valentine’s day approaching, there is no better time for Seasonal businesses to get re-acquainted with Annualised Hours as a way of delivering on time, every time.