Coronavirus: What can large organisations do to save mass redundancies?

Long lines at Centrelink offices illustrate the toll coronavirus has already had on the Australian workforce. With hundreds of thousands of people now out of work – and potentially millions by the time the virus has run its course – small and medium businesses are feeling the full force of the crisis.

As a larger organisation, however, you have a bigger arsenal to draw from in order to continue doing business and reduce job losses. Here, we explore some of your options to avoid mass redundancies and help your team hit the ground running once the virus has passed.

Rising unemployment rate

Before the new year, Australia’s unemployment rate was looking rosy at just 5.2%. By the end of this year, however, experts like Westpac’s chief economist Bill Evans predict that figure could soar to more than 11%.

Smaller organisations and sole traders will be hit hardest – and with greater restrictions on non-essential businesses shutting down, it’s likely we’ll approach Evans’ unemployment figure sooner rather than later.

Large organisations are in a different position. With multiple teams and offices spread out across the country – and in many cases around the world – all interconnected digitally, business is able to continue for many companies. While the coronavirus pandemic will undoubtedly affect profitability this financial year and next, there are ways for business leaders to curb the brunt of these uncertain times and limit the number of enforced redundancies.

Redeploy your staff elsewhere

Hearing warning bells about reduced workloads while still maintaining a full workforce can send senior management into a tailspin – but your first reaction shouldn’t be to lay off hundreds of employees.

Instead, look at other departments that are perhaps much busier due to the pandemic. Is your customer service team inundated with calls but lacking the capacity to keep up? Your client-facing sales team could be the perfect people to temporarily transfer over to that department.

If redeploying staff to other internal roles simply won’t work, why not look into talent loaning? It’s a way to ‘lease’ your staff to another company who needs their services – but has neither the time nor the manpower for recruitment – while freeing up much-needed cash for your company.

Reduce employee hours

No one wants to take a pay cut, but even worse is being without a job entirely. Many Australian businesses are already working with their employees to reduce their number of hours while still keeping them on payroll. Even AFL players have accepted a massive pay cut.

It’s important, however, to take this step in a formal, legal manner. That means reducing work hours on a case-by-case basis, getting the amendment in writing in each worker’s employment contract, and then having both parties sign it. Failure to do so could cause big headaches down the track, leaving you open to litigation for unlawful deduction of staff wages.

Encourage your team to take long-service or annual leave

Annual leave won’t last months, but experts are warning us to brace for major disruptions through to the end of the year and likely into 2021. That means if you plan on getting your staff to take annual leave, it’s better to stagger those times, and focus on periods where you will be hardest hit – i.e. when the margins will be tightest. Make sure you give your team plenty of notice about when you want them to take this annual leave, however.

Alternatively, speak with your longest-serving employees and, if they are in a non-essential role, ask if they would be willing to use up some of their long-service leave. It means they can stay on the books and you won’t have to part with a significant amount of money (as you would if you were to make them redundant).

Make temporary layoffs

As a last resort, some organisations have taken harder steps to reduce their workforce. The most significant so far has been the airline sector, with both Virgin and Qantas temporarily laying off tens of thousands of staff – although Qantas is in talks to redeploy a number of their laid-off employees to Woolworths in order to support the now-understaffed grocery chain.

Be aware that Australian Government has outlined what support is currently available to employers impacted by the COVID-19 coronavirus. Also, the Fair Work Ombudsman clearly outlines the rules around standing down staff, redundancies, changing work hours and transferring employees to other positions. Avail yourself of the information so you can treat your team and your business properly.

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