The financial uncertainty brought on by COVID-19 is leaving many business owners at a loss for how to pay their employees. While some companies are furloughing their staff until further notice, others are hoping to meet their staff’s financial needs for as long as they can. Whether your business has had to temporarily close or has shifted to remote work, budgeting and wage issues will be a major thing you have to think about. The following four ways explore how businesses are handling their budget issues during these times.
Prioritize Your Expenses
Now is the time to reassess your budget. With most businesses operating in emergency budgeting mode, it’s time to prioritize one’s expenses. Take a look at your business checking accounts to monitor your monthly payments and current expenses. Eliminate all unnecessary subscriptions and purchases to make sure you can divert these payments elsewhere. By prioritizing your expenses and employees, your business will be more likely to stay afloat and also retain customer and employee loyalty. This is critical to the future of your business.
The goal of your budgeting at this time should be to create a bare-bones budget that will allow your business to operate as minimally as possible. This way, you’ll be able to use any available cash to continue to pay your employees. So prioritize your expenses and your essential workers.
Use Hazard Pay
When it comes to raising wages, employers that are considered “essential businesses” should compensate their employees with hazard pay. Companies that are requiring their staff to work throughout the pandemic can offer hazard pay in addition to continuing to compensate their employees. Businesses that are still open but unable to pay extra for hazard pay are offering perks like cash incentives, daycare services, meals, and similar benefits. While this may seem like it hurts your budget, offering hazard pay will help your employees be able to do their work without the added stress of sickness and danger hanging over them and will improve their morale.
Pay Salary Increases
While the future remains uncertain, businesses can take action to help their employees prepare for the economic downturn by paying out salary increases. Though many businesses may be unsure how much longer they’ll be open, many choose to put “people over profit” by offering to pay salary increases. If your business is able to do so, consider paying out your employees’ planned salary increases for the year. This may require some sacrifices on the side of your management team and CEO, but remember that your lower-wage employees are more likely to leave the company or struggle financially without expected pay raises.
Give Bonus Payouts
Bonus payouts are another option for employers hoping to help their staff members stay afloat financially. Companies with the financial means to do so are hoping that paying out bonuses now will offset the future financial problems brought on by COVID-19. Though it isn’t clear how long most businesses will be closed, most business owners hope that the likes of bonus payouts, hazard pay, and salary increases are enough to tide their employees over until things pick up again.
During these trying times, businesses must think innovatively to keep up with their financial obligations. To keep your business running, you may need to focus on employees and business essentials over profits. This will ensure your business weathers the storm and you and your employees will come out the other end stronger and more unified. Use these four suggestions to keep your business on track with your budget and employees’ needs.
Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most of her time hiking, biking, and gardening. For more information, contact Brooke via Facebook at facebook.com/brooke.chaplan or Twitter @BrookeChaplan