Next month marks the end of the Coronavirus furlough scheme (31st of October to be precise). For startups who have furloughed workers over the past few months, the end of this scheme may result in a shock to the system as well as the bank balance.
Next month marks the end of the Coronavirus furlough scheme (31st of October to be precise).
For startups who have furloughed workers over the past few months, the end of this scheme may result in a shock to the system as well as the bank balance.
When the virus hit, it impacted businesses both big and small, new and well established. It didn’t discriminate. For that reason, it was understandable that many startup founders didn’t view their subsequent business struggles as a personal failure, but instead viewed them as a collective problem. It was through no fault of their own that their business had taken a hit. It was the virus’. And not only had the pandemic negatively impacted their own establishment, it had wreaked havoc on countless others too.
However, it seems that this ‘we’re all in the same boat’ viewpoint may have temporarily offered some founders a false sense of comfort and security. Many founders battened down the hatches when choosing between fight, freeze or flee and who could blame them.
There’s definitely a great sense of comfort in knowing that you're not the only one experiencing hardship during this awful time. Furthermore, there’s no doubt that people are reluctant to make business decisions when economic forecasts are still quite uncertain, albeit inevitably grim.
In many cases, startup founders may be aware that they might have to scale back their operations or cut resources to stay afloat. However, as this may entail making loyal staff redundant, for example, founders may be putting off these decisions for as long as possible.
I’m not a business owner so I’m in no position to advise one what they should do during these unprecedented times. However, as a freelancer and a former full time employee, I will say that I’ve always appreciated transparency from my employers and appropriate notice about any potential changes to my contract.
Longtime employees can become good friends and therefore I can completely understand why businesses may delay inevitable redundancies. You want to protect your employees and you feel that it’s your responsibility to do so. I salute you for that.
However, if you really want your business to survive this extremely volatile period, you need to take action. And not in a few months time. You need to do so now.
Once the furlough scheme ends, redundancies will likely increase fairly dramatically and as a result there will be a massive rush for jobs. If you know you won’t be able to afford to keep on members of your team, there could be a strong case for letting individuals go sooner rather than later, so that they can get ahead of the job rush that will no doubt come once the scheme ends in October.
Finally, when making tough but necessary decisions about their businesses over the next few days and weeks, startup founders should bear in mind that the government has promised to pledge a £1000 bonus to businesses who retain furloughed workers until the end of January 2021. It’s an option worth considering if your startup’s in a position to do so.
Andy Grove, one of the founders of Intel famously said “Bad companies are destroyed by a crisis, good companies survive a crisis but great companies are defined by a crisis.”
Good leaders take action. If you’re a startup founder it’s time to come out of the pandemic mindset and into action mode.
The businesses that will survive and even thrive over the next few months aren’t the ones putting their problems on the long finger, they’re the ones tackling them head on right now.
While knowing others are experiencing similar struggles to you can be of comfort during stressful periods, it’s important to act in a way that ensures your business weathers this rocky period.
Now’s the time to figure out what you need to do to protect your business and kick on. Don’t wait around to see what others do first. Ask yourself the hard questions, make the difficult decisions. You’ll thank yourself in time.