Wānaka Sun       

Level Heads and Silver Linings (Advertorial)

By Janice Hughes, Director, Aspiring Law

Posted at 4:25pm Monday 22 Jun, 2020 | By Aspiring Law admin@thewanakasun.co.nz


It's impossible to ignore the last few months in a column like this and so I want to take a slightly different tack than usual by sharing some of the things I have encountered. For me, the biggest lesson for business from the COVID-19 crisis is: how important it is to keep a level head and make calm, calculated decisions.

A lot of the work we've been doing recently at Aspiring Law is what I would describe as “crisis management”. Some of the panic, and associated knee-jerk reactions, are entirely understandable given the huge uncertainty we're living with as a result of the pandemic. 


What makes it doubly difficult for some people to cope with is the fact they've done nothing wrong. They've been forced into crisis mode by circumstances completely out of their control. I feel their pain, but I also think the pandemic is causing a lot of business owners to do things they wouldn't normally do and maybe, just maybe, it's time to take a step back and rethink.


I've heard some people comparing this situation to the Global Financial Crisis (GFC) and commenting that during the GFC some businesses took too long to react. With COVID-19, though, it seems the pendulum has swung completely the opposite way and some — and I stress the word some — businesses have acted very hastily when, perhaps, a more calm and measured response would be more productive. 


Three Reactions


I acknowledge that there are some businesses, for example tourism operators heavily reliant on international tourists, that absolutely needed to act quickly and take action to save their severely impacted business. I put them in a separate category because they clearly had a strong business case to make drastic changes and needed to move decisively.


We've seen some really great examples of businesses in this category pivoting and repositioning, which has been really fantastic to see. We've also seen some shut up shop, or hibernate, and that is also entirely understandable.


Then there are businesses who get most of their income from the domestic market. Their business case for making changes is vastly different. They might need to make a tweak, or two, but they need to think very carefully before deciding they need to completely overhaul their business model. A business in that category acting too quickly could unnecessarily cut their business off at its knees, and find themselves without the resources they need to thrive going forward.


Then there's the third category, the people I describe as jumping on the doom bandwagon. These are people who read the media stories, see everybody else restructuring and think everyone else is doing it so I must too. Many of those people have acted and made decisions in haste. They've been so focused, with tunnel vision, on surviving lockdown and thinking the world is imploding, they've failed to consider what the short, medium, and long-term future for their specific situation might look like. They also haven't considered what opportunities there are in front of them and what resources they need to take advantage of them.  If you are one of those people then pause, step back, and consider your situation with a wider future focused ens.  It's not too late to jump off that doom bandwagon.


The Yin and the Yang


Some businesses have significantly reduced the number of staff they employ, even when the work hasn't really dried up. Those businesses still have a significant amount of work in their pipeline and they have been asking the people left to take on the extra workload. Stress and burnout are issues on the horizon for some employees in those firms.


At the other end of the spectrum are those businesses who called on their teams to come up with ideas to ensure the business could survive and thrive during the COVID-19 crisis. Those businesses that worked together with their teams to come up with innovative solutions are now looking to a future with a group of highly engaged people working together for the collective good of all.


Have a think about which type of business you want to be.


The Wage Subsidy – the Good and the Bad


Many businesses have taken advantage of the government's wage subsidy. Some, rightly, have used the subsidy to pay their team and have paid them the usual wage. Then there are those businesses that have cut wages to $585 per employee, per week, the amount provided by the wage subsidy, and told their staff to take it or leave it. They've basically said: “That's all I'm paying you” even if staff were earning more than that amount before COVID-19. 


In some cases, employees whose wages were cut were still working, while in other sectors like hospitality and retail, the businesses were closed. Regardless of the situation, employers should have consulted with their employees about any change to their wages or employment terms and documented that discussion, and any change to the agreements. 


Businesses that have made people redundant or reduced their wages without proper and due process seem to have ignored a key provision of the wage subsidy, which states that "employment law still applies".


There are likely to be serious issues for some of these firms down the road with employees taking legal action. If you're one of those firms and you think you've made a mistake, you still have time to fix it and make good. If you've stuffed it up, fix it up. 


The other thing to remember here is that people have long memories when it comes to how they were made to feel. Businesses who treated staff badly during this period might find that those people look for alternatives where they will be treated more fairly. New Zealand is a small country and if you get a reputation as a bad employer, it sticks.  Use this time to build a positive reputation. Not the opposite.


Silver Linings


It may be difficult to be optimistic right now, but the reality is the fundamentals are still solid for our region and our country. We still live in the most amazing part of the world. The reasons to live here or visit this part of the world haven't changed. 


The concept of working remotely has been proven to work better than anyone could have imagined during the pandemic. That opens up opportunities for places like Wanaka as a base for remote workers. 


I was talking to a friend of mine who works for one of the Big Four consulting firms in Auckland and he told me that only 20% of their employees have put their hands up to go back to work in the office; 80% want to keep working remotely. That is going to have a massive impact on cities like Auckland and Wellington. Many will be looking to relocate and think, “Well, why can't I live in Queenstown or Wanaka?” The simple reality of it is that they can. 


We've already got lots of people in Wanaka who work remotely for large multinational corporations based overseas and they deal with people in different countries and time zones. If you're working in the same country and you don't have to worry about the time difference, then why wouldn't you?

This has been a challenging and traumatic time for many but there are silver linings if you look for them. Don't panic. Keep calm and carry on working for a positive outcome.




Please remember:  the information in this column is designed as a general guide only and should not replace specific legal advice on a particular issue.



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