Employee Retention Strategies for the Long RunPosted on April 27th, 2020
One of the biggest questions on the minds of small business owners today is how to retain their valued employees through this difficult moment. As many small businesses experience revenue losses due to COVID-19 and uncertainty about when and how to reopen persists, employers and employees alike are concerned about the future. That’s why it’s vital that business owners have access to the resources and strategies that can help them maintain their teams and be ready to get back to business when the opportunity arises.
Employers Have Options
There are several options available to employers during these trying times. Our common goal is to provide employees with the ability to meet their financial needs during the shutdown so that they are ready and able to return to work when it’s over. Don’t rush into a decision without examining the resources that are available. These include:
Paying Employees (with Federal Assistance)
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a $2.2 trillion stimulus package that provides tax credits, deferred tax payments, and loans through the Paycheck Protection Program (PPP), among others. Its goal is to encourage and enable eligible employers to keep their employees on payroll for the duration of this crisis.
My colleagues and I at e2E, LLC have developed fantastic COVID-19 Resources to help guide small business owners to the resources that best fit their unique situation, including a CARES Act Flow Chart that outlines which programs your business may be eligible for. I’ll briefly summarize the resources available:
As the SHRM explains, “under the PPP, eligible employers will be provided with partially forgivable small business loans to cover certain payroll costs, employer group health costs, and other employer incurred costs for eight weeks after the loan origination date.” A second round of PPP funding recently became available.
The CARES Act provides for advance payments through the SBA’s Emergency Economic Injury Disaster Loans that can be used “to cover the costs of providing paid sick leave to employees due to COVID-19.” These funds can be procured in addition to a standard EIDL.
For the duration of the COVID-19 pandemic, employers who are forced to fully or partially suspend operations “may receive a refundable payroll tax credit for 50% of wages (up to $10,000 per employee) paid during each calendar quarter.”
In addition, the Families First Coronavirus Response Act (FFCRA) expanded paid sick leave benefits for workers who are subject to a medical quarantine, caring for a family member in quarantine, or unable to work for other coronavirus-related reasons. The Department of Labor notes that “covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA,” including sick leave and health insurance coverage.
There may be other methods of assistance available that provide employers with enough working capital to continue to pay employees. I encourage employers to explore all the options for retaining their employees by speaking with a small business HR or finance professional.
Furloughing or Laying Off Employees
While this isn’t the decision any employer wants to make, for some businesses (and employees) it may be the best option during this uncertain time. The US Chamber of Commerce notes that some “businesses facing COVID-related closures must make the difficult decision to temporarily lay off or furlough employees.” If this is a necessity for your business, they offer sound advice on how to handle the process.
For instance, “if you are able to continue operating but simply need to scale back, it may be wise to design an “on-off” furlough plan so your employees are not completely without income for months on end.” If a complete furlough or lay off is inevitable, provide employees with information about the resources they need to maintain financial stability, which may include Pandemic Unemployment Assistance.
Discuss your options with an HR or finance professional to help determine the most favorable course of action for employees and employers alike.
Communication is Vital
Whether you are able to continue paying employees or forced to furlough or lay them off, clear and honest communication from business leaders will play a vital role in your ability to maintain your team and prepare them to return once this crisis has passed. Be honest about the reasons for your decision and the factors that contribute to its necessity. Be clear about what benefits, incentives, or severance you are able to offer and under what conditions.
Perhaps most importantly, demonstrate empathy for your employees. They are also struggling through uncertainty and need to hear that you understand and share their concerns. Keep communicating throughout the shutdown, providing updates on your situation when possible as well as psychological support. Maintain your relationships with valued employees through open communication in order to retain their trust and prepare them to return to work.
This is a difficult time for small business owners, but help is available. The subject matter experts at e2E, LLC are working hard to provide guidance and support during this time as resources and information continue to evolve. Please reach out to us to learn more!