Important Information - Returning to Work 28th April
Published and valid as: 20th April 2020
If you think the world has gone completely insane, you are probably correct.
Flicking the switch to reopen your business after the level four lockdown is unlikely to be straight forward.
Following is some important material which will be extremely helpful when you do return to work.
- Draft letter for staff regarding the seriousness of the current situation for businesses and the on-going economic consequences for everyone in New Zealand
- Agenda for meeting with staff immediately on your return to work
Sending this information to your staff in advance of returning to work will give them a chance to think about the challenging position all New Zealand businesses are currently facing prior to the first day back after the lockdown.
Everyone is going to have to work together in the coming months for a successful outcome.
Please be kind to yourself and everyone around you. These are very challenging times.
The "Draft Letter for Staff" & "Agenda - Meeting with Staff"; as below, are resources made available due to the current challenges New Zealand businesses face as a result of the COVID-19 level 4 lockdown of New Zealand. These are very challenging times for business. If you require certainty before making use of the material contained below, please obtain independent professional advice beforehand. We cannot accept any liability to any party whatsoever for the subsequent use of the material contained below.
Draft Letter for Staff
Dear Team Member
Re: Four Week Lockdown of New Zealand
The Government of New Zealand made an announcement on the 23rd March 2020 regarding a lockdown of New Zealand for a period of at least four weeks due to the COVID-19 Virus. The lockdown of New Zealand started at midnight on Wednesday 25th March 2020.
As a result of the lockdown all non-essential businesses in New Zealand were forced to close their doors for a period of at least four weeks. Non-essential businesses may account for over 90% of all businesses in New Zealand. This means 90% of all businesses in New Zealand are currently under various levels of financial stress at the moment from concerning to extreme.
Four weeks is a long time for a number of small to medium-sized businesses to go without $1 of sales yet still be paying wage and overhead costs. As each day goes by now, more and more of the 90% of all non-essential businesses in New Zealand subject to the lockdown will never re-open their doors.
Four weeks is a dangerous length of time for most businesses to go without making any sales and those businesses that do survive will likely have extreme cash flow problems. Sales and cash are like oil in a car motor to a business. When the car develops an oil leak it is only a matter of time before the engine blows up. The only thing determining when the engine blows up is size of the oil leak. In the case of the COVID-19 four-week lockdown the oil leak for businesses are wage and overhead costs.
On the 5th April 2020, the Auckland Chamber of Commerce advised that it had surveyed 1000 of its members' businesses. Of the businesses surveyed, 30 percent advised they are going to have shut themselves down, they will not survive. We would assume the same would play out all over New Zealand. The flow-on effect of this level of business closure to all businesses will be staggering.
Let's be very clear here, the announcement made by the New Zealand Government to lockdown the country and close all non-essential businesses for four weeks is a catastrophic event for those businesses placed into lockdown. Imagine if you had no money whatsoever to pay your bills and live on for four weeks. The time at which this becomes terminal for each business will dependent on how many weeks it will take for the oil to drain from the motor. For a number of businesses this will be just two weeks.
Does this mean the business failures have occurred as a result of poor business management? No, is the short answer. There are a number of reasons for this:
- The four-week shutdown of New Zealand is an unprecedented event that very few people alive will have experienced, and it is not something the majority of businesses will have planned for.
- Profit margins are generally tight for businesses now.
- Small business people often receive little more than a normal wage from their business for all their effort, which means they do not have the funds available to squirrel away for such an event as COVID-19.
Please take the time to pay attention to and understand what is currently happening with both New Zealand's and the world economies. This crisis must shape everyone's thoughts and actions now.
As with the 90% of non-essential businesses placed into lockdown and forced to shut their doors on 26th March 2020, this business is no exception. And just like the other 90% of non-essential businesses placed into lockdown we are currently fighting for our survival with the oil draining from the motor and fast.
Everyone will need to work together and act fast now to ensure this business moves forward from the current situation.
Please be kind to yourself and others at this extremely challenging time.
Draft Agenda - Meeting with Staff
Morning of the first day back
Hold a meeting with your staff for the first hour or so on the first day back
- Talk about health and safety risks around COVID-19; develop a written procedure; have all staff sign off on it - remember the Ministry of Health will be able to walk into your business, ask for a copy of the written policy and shut you down if there are concerns.
- Talk about the impossible situation during the lockdown, the reasons for your decisions during the lockdown and subsequently tidy up in writing any verbal agreements that were reached with staff during the lockdown period. Have staff sign off on what was agreed.
- Print a copy of the attached letter off for each staff member and hand this out at the meeting; use it as a basis to discuss the implications of the four week lockdown on New Zealand businesses generally and then more particularly your business.
- Work through with staff what needs to happen to restore your business viability, as applicable. Note, after the four-week lockdown ends a good number of New Zealand businesses will either not reopen or will be on their knees.
- Talk about workflows and the loss of any customer groups; for example tourist companies; camper van work; rental car work. Also, the impact from the general business contraction that may occur initially.
- Get staff ideas and feedback on how to move forward, particularly for the first couple of months after you return to work. This period is expected to be very challenging.