To most people, their jobs are their lifeline. Our world moves with money; it sways with money, almost everything has to be bought by money. With that being said, losing a job or even just the mere thought of losing a job can make people feel frantic and anxious. Nobody wants to be put out at sea without a lifeline; the feeling of uncertainty can be enough to make you panic.
This is precisely the reality UK workers face these days. With the situation surrounding the Coronavirus not normalising any time soon, many employees are in danger of losing their livelihoods. Even if businesses have no intention of letting their people go, the current circumstances are pressing them to make drastic decisions. With the entire nation under lockdown, it is simply too challenging for businesses to sustain payroll with no sufficient income coming in. This makes the possibility of a job retrenchment all the more likely at this time.
But wouldn’t the aftermath of a job retrenchment also backfire to businesses?
With no stable source of income, people would be more reluctant to make purchases. They would try to limit their expenses so that they can stretch their savings until they can get a stable job again. During this time of extreme uncertainty, you would expect them to show more reluctance towards spending as well. After all, nobody knows when the situation will calm down, and we can only hope for things to get better soon.
Anyway, job retrenchment will create a negative ripple in the market. When unemployment rates go high, the market activity will go slow. The relationship between them is indirectly proportional. This means that if too many businesses decide to layoff workers, they’ll lose business also.
Instead of looking for ways to cut costs through layoffs and retrenchment, we should focus our energy on how we can preserve the status quo. We must figure out ways to buffer the impact of the increasing rate of unemployment and weakening of markets. Here are some examples of how we can slow down the rise of unemployment amidst COVID-19:
The UK government believes that this is a significant cause of concern as well and may further deepen the impact of the impending recession. SMEs (Small and Mid-sized Enterprise) are crucial to local markets, but so is employment. This is why they decided to launch Job Furloughing Schemes to counter the effects of the lockdown period.
The Furlough Scheme should help employees who are currently put on leave due to the market interruption. Since most businesses remain closed, many workers are compelled to stay home. While some companies continue to operate under a skeletal system, some employees are not required to report for duty, leaving them unable to support their families during this sensitive time.
Under the furlough scheme, furloughed employees will be receiving cash assistance from the government, which amounts to 80% of their salaries not exceeding £2,500 per month. This cash grant aims to support the immediate needs of employees and their families while they are unable to work currently. While furloughed, employees are not allowed to do any paid work – although this may change in the following months.
However, after the furlough period, companies are not obligated to rehire any furloughed employees, which means that jobs are not guaranteed. The good thing about this, however, is that it can buy companies some time to settle and adapt to this new market environment, which brings me to my second point.
Diversify & Adapt Business To The “New Normal”
As I previously mentioned, nobody knows when exactly this entire situation is going to blow over. It is safer to assume the worst possible scenario and plan for it rather than take the current situation lightly. Many companies are already preparing their businesses for the “new normal.”
After all, even after the immediate threat is averted, we are looking at months or even years of recovering from the effects of the Coronavirus. We are heading into a deep recession; this much is evident given the data made available to us at this time.
Case in point, if you want to stay in business, you have to consider diversifying your products and services so that they would be useful and effective in this new market environment. Etsy, for example, has managed to turn the situation to their favour by having over 50,000 sellers create and sell face masks and other protective gear instead of their usual crafts. Although a lot of changes had to be made, especially with their system’s algorithm, this development has indeed turned the tides of luck to the company’s side.
By creatively diversifying your products and services to adapt to this “new normal,” you can give your business the chance to thrive in this new market environment. If your business survives and flourishes, so will the people. If most companies learn to adapt to the current market situation, we might be seeing fewer job losses. And businesses that can adapt to the current situation likely have what it takes to adapt to any situation, which ensures the survival of the company for the long-term.
As a business, you shouldn’t limit yourself to thinking about how you’re going to survive the Coronavirus situation. You have to think beyond that because even though the UK government is hoping for the market to “bounce back” right after the crisis is resolved, the chances of that happening right away are unlikely. It will take a while before we can return the economy to how it was before the pandemic. It is best to anticipate the recession happening and prepare for it in advance.
If you want my advice regarding how you can keep your business afloat financially during and beyond this pandemic, you can get in touch with Annette & Co. through any of our socials. If you have questions that you want to be answered in real-time, I’m also inviting you to join me on a LIVE Podcast, Uncover Wealth Radio, which airs every weekday at 11:00 AM. I’d be more than happy to answer your concerns to the best of my abilities.