Finance Guides

Building staff loyalty in a time of crisis

When the economy is thriving, businesses prioritize compliance especially for the top obligations: statutory payments (taxes, NSSF), payroll, rent and other suppliers.

Building staff loyalty in a time of crisis

I left my company, we were fired, the company downsized..and such stories were the major conversations between peers during the hard biting C19 period. But could this have been more pro teams, looking at retention, working shifts or even innovating flexible work schedules such as part time or even remote working? These questions now fill the Board rooms as talents were lost in the struggle to keep ‘afloat’ in most cases selfishly by company top brass. 

Behind every company/business is an individual. Behind every individual is a family (direct and indirect beneficiaries). This validates the notion that people are the greatest asset of every economy. This article seeks to dig deeper into how loyal individuals are at the mercy of the ‘unloyal companies’ which abandon them at the time of need, creating a ripple effect that disturbilises the fabric upon which all economics is premised.

For an organization, the objective of vigilance is to ensure that the management gets the maximum out of its various transactions. In the field of purchases, it should get the quality product at competitive rates. In the field of sales, it should get the maximum realization for its products at the minimal selling cost. When it comes to employees, they should get the most productivity from their talent. 

When the economy is thriving, businesses prioritize compliance especially for the top obligations: statutory payments (taxes, NSSF), payroll, rent and other suppliers.

However, It’s clear that the Covid 19 after effects are beginning to bite, and bite hard. Businesses especially SMEs are struggling to keep afloat; 

  • Rental payments are falling behind and some have had to vacate there offices to work from home;
  • Employees with contracts have not been paid for several months;
  • Suppliers who had signed contracts with these businesses have moved down the priority list (these suppliers have rent and salaries to pay, let alone families to look after)
  • Back taxes are accumulating interest and penalties, putting a further strain on the cash flows and going concern status of most businesses.

In Uganda,Banks extended amnesty to their compliant customers who had been hit hard by the pandemic, this was a first and an appreciated gesture.

Likewise NSSF, knowing its core mandate and envisaging the pressure on its savers, stood tall and waged a war on Financial Literacy to ensure that citizens are better prepared to face unforeseen events. Ofcourse, the more people improve their relationship with money, the more interest will be in investments. And with the recent introduction of a voluntary savings scheme by NSSF, it’s a no-brainer that this initiative will increase membership, let alone quality membership(educated, positive and ready to invest). 

We should also acknowledge the mid term access initiative to give savers a life line to re-ignite their businesses, this is a welcome move as it provides options to individuals who have credible plans to multiply their savings and generate cash flows.

The question is, How have companies reciprocated these gestures to their most valuable assets-the employees?

It’s time for employers to treat their employees as real partners and not just view them as wages on which to maximize a return. 

At the height of the Pandemic, many employees were let go as businesses protected their cash runway. As the effects of the pandemic unfold, those who stayed behind in some cash strapped companies have job contracts but with no pay, with a call to keep the faith ‘until things become stable’. 

Most vigilant and loyal employees have run out of options as their emergency savings are exhausted and their hope of dignified employment is a far cry.

How can businesses make their employees’ time worthwhile in these uncertain times?

Here are some ways we could encourage this partnership to flourish:

  • Build trust; where there is trust, people naturally contribute more without feeling that they are being leveraged. Instead of asking, “How can we pay less and get more”, Employers should be asking, “How can we take the best care of our employees?”
  • Communicate effectively and regularly; Silence is a breeding ground for rumors and anxiety which creates a toxic work environment. The caveat here is that, as management requests employees to be patient for unpaid dues, they should be transparent and walk the talk. For example, hiring new staff when you are unable to pay salaries for existing employees is a NO,NO.
  • Find creative ways of meeting your employees’ physiological needs (food, transport, accommodation): understanding and utilizing Maslow’s “hierarchy of needs” can help employers understand a better path to success.

For example, provide meals to your employees, offer basic family needs hampers (e.g. food, consumables at a bare minimum), OR offer to write a letter of support to their landlords to ease the pressure resulting from delayed payments. Meeting the employees at their most critical point of need is something employees should practice in times of uncertainty.

  • Support the growth of employability skills development through continuous education, try out platforms like UDEMY, Coursera and edX for discounted offers given to employers.
  • Senior management can give up a portion of their salaries to cater for low level earning employees, this ensures you have catered for their basic needs.
  • Credit profile; Most employees with running bank loans are behind on their repayments which greatly impacts on their ability to access future credit. Management can assist by reaching out to respective banks so that employees are given a grace period. 
  • Opt in, opt out modus operandi should be considered so that employees can look for ‘gig jobs’ to make ends meet. 
  • If a company is a going concern, management can even consider giving an equity stake for employees who have demonstrated resilience during the tough times to ensure brand loyalty.
  • Offer Mental health rehabilitation camps: Just recently, off the Harvard review I learnt of a company that considered hiring a company Chief Health Strategist who is expected to ensure staff have the right state of being if they must be productive. This goes beyond medical insurance, and in many ways brings staff loyalty and commitment to go over more difficult times with the company they have given their energy, and intellect over the years. 

There is always exchange when you convene great talent that goes beyond money. Talent gives businesses an opportunity to leverage ideas, energy, inspiration,service, solutions, information, knowledge, wisdom, time, credit and goodwill. If employees perceive they get equal or more in one of the aforementioned forms for their skills and time commitment, they will feel fair exchange and good value, otherwise, they will feel ripped off. 

Unfair value exchange is not sustainable, the labour market is undergoing major disruptions as good talent now gravitates towards Employers who value it most.

If Management of businesses can demonstrate to employees that they are truly valued, we are bound to see the ripple effect in the economy. Higher employee engagement drives productivity  which results in sustainable businesses that can withstand economic shocks.

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