Hiring during COVID-19
We are facing unprecedented times over the next 6 to 12 (perhaps 18) months as many businesses face an uncertain future, new challenges and ways to protect their staff and customers whilst maintaining viable business activity. What can we expect to see?
Global and local stock markets have taken huge hits with Monday 16 March alone seeing $162 billion wiped from the share market in the worst single-day fall in history. This will impact retirement plans for many and will see businesses scale back investment as well as hiring.
The RBA is predicting significant job losses however Governor Phillip Lowe has indicated “The scale of those losses will depend upon the ability of businesses to keep workers on during this challenging period. We saw during the global financial crisis how flexibility in working arrangements and limited job losses benefited the entire community.”
Unemployment rose from 5.3% in January and is set to rise still further with non-salaried jobs most at risk. AMP Capital Chief Economist Shane Oliver commented to Yahoo Finance “As the economy slows down particularly in areas where people gather together (like education, hospitality, traditional retail, tourism, entertainment) it will mean a rise in unemployment at least to 6 or 7 per cent and even weaker wages.”
In the recession that hit America in the late 2000’s, companies that emerged most strongly had focused on operational improvements rather than termination of employees. Laying staff off is costly and reduces morale resulting in a less nimble organisation as the economy picks up. Utilising unpaid leave and reduced working hours are options to be considered.
With the new $66 billion economic stimulus package announced by the Government, small businesses will be eligible to receive a tax-free cash payment of between $20,000 and $100,000 to keep their staff employed during the coronavirus crisis.
As for flexible working arrangements this may be a great way to move forward to unclog our cities of traffic and provide a better work-life balance for employees. Fortune 500 conducted research assigning 56 of their teams to either working as normal or having wide latitude on when and where to work. The outcome showed that ‘more flexible work policies that give workers more control over when, where, and how they work don’t hurt business performance. Instead, such policies can lead to less stressed, more satisfied employees who are less likely to quit.’ They found employees were less stressed and more engerised, were more productive, team members develop efficient ways to connect with each other and time that had been spend commuting turned into positive work-life balance opportunities.
Ultimately, we may see long-term employment trends where job security and career progression are highly valued, flexible working arrangements continue, Baby Boomers decide to exit the workforce earlier than planned, although some may need to work longer than anticipated to replenish retirement funds.
Whatever the final outcome, organisations that have looked after their employees as best they can, retained a strong and collaborative working culture and flexed with the changing economic environment will inevitably retain their valued staff and will attract the best candidates when we do turn the corner – as we certainly will.
Useful resources in a changing landscape
The health and safety of staff is a first priority and there are resources outlining health and safety issues HERE.
The economic response by the Australian Government is evolving and up-to-date information can be found HERE. Support is 4-fold – delivering support for business investment, cashflow assistance for employers, household stimulus packages and assistance to severely affected regions.
The Victorian Government is also providing support to the business community for updates click HERE.
By Kristine Ash, Director, OrgMent Talent Solutions