Navigating retrenchment, wage cuts and unpaid leave
Author: Bruce J. Little
Unprecedented financial times may not require unprecedented solutions.
During a global pandemic with far-reaching implications and challenges instore for every aspect of our lives, inaction will not help, finance experts seem to agree.
We are not merely hapless victims of fate, not as long as we have choices to make. Acclaimed American automobile executive and CEO of the Chrysler Corporation, Lido “Lee” Iacocca said: “In times of great stress or adversity, it's always best to keep busy, to plough your anger and your energy into something positive.” So, let’s take a look at a few ways to do that…
Hope for the best but prepare for the alternative
Despite the global crisis and many businesses being forced to come to a standstill as efforts to control the pandemic play out, this does not necessarily mean that you will be retrenched, be asked to take unpaid leave or be given a wage cut. Anxiety and panic will not help so trying to remain optimistic is likely to be of more use.
There was always a risk of these losses for anyone in any role in an organisation, due to the perennial unpredictability of business - even prior to COVID-19. However, many organisations have contingency plans in place or are receiving financial support that will allow for some job security in numerous industries.
In an article for The Banking & Finance Post, Zafar Imam, lead of OPPO Kash, a massive financial services platform, says that “in these times of crisis, it becomes more important than ever to take care of one’s financial health.” This means revisiting financial goals, not making any decisions from a place of fear; reducing expenses (fewer luxury items) and other financial obligations and putting aside money for “urgent” needs, if you can.
Such time also provide an opportunity for businesses to look at new synergies and possible mergers with other businesses.
Limited finance but a number of options
But what if you didn’t have much money to start with, or were living beyond your means before the crisis? How can you still manage financial insecurity?
Various types of financial aid and debt relief are available in most countries at this time. Get online or make some calls to any connections in Finance to see what you may qualify for.
Getting more information, in general, could help, explains Monica Torres, a “workplace, career anxieties and future of jobs” journalist for Huffington Post. “One of the top recommendations when working through a crisis like the coronavirus pandemic is to seek clear communication from your boss. You deserve to know what your employer’s (possibly evolving) pandemic-related policies are, including how you will be paid or not during this time.”
Iain Wardhaugh, founder and partner of Virgonomics, a Johannesburg-based accounting and tax practise with clientele ranging from sole proprietors and small to medium enterprises to international investment companies, offers the following advice:
“Businesses should use this time to redefine their outlook on the economy and the way they do business. They should take advantage of the resources available to them and the opportunity to do internal planning and strategizing for post-lockdown operating procedures and long-term recovery.
Individuals who are retrenched could take the time to improve their CVs, upskill online through courses (if they are able) and make themselves more attractive to employers (upskilling may be something employed individuals can do too to enrich themselves during lockdown). Another vital exercise is to relook and really analyse your budget and see where you can trim and tidy up on unnecessary expenses.”
Once you’ve come out the other side – keep it up
As a species, we have survived plagues, wars and numerous financial depressions. You have likely overcome several seemingly insurmountable situations yourself looking back on your life.
‘This too shall pass’, is a hard-worn adage for a reason: it’s a fundamental truth. You are likely to survive this and when you do, Financial Literacy Counsellor, Valerie Rind offers the following advice in an article featured on Forbes:
“After nearly three years on a drastically reduced income [a 75 per cent wage cut], I then returned to a six-figure salary as an attorney for a large corporation. But some of my frugal habits have stuck. To this day, I always buy the least expensive package of cheese and dilute my cleaning liquids.”