The coronavirus outbreak has forced many businesses to reduce and even cease their operations, thus impacting their revenues. Economic downturns are making it difficult for companies to manage their finances. Paying workers has never been more challenging. But there are five ways companies can deal with financial issues and keep their workers paid.
1. Reduce Non-Wage Costs
This is the right moment to pause all non-essential things. Pause on unnecessary purchases such as unprofitable products. Pause on expansion and investment ideas. See where you can get cheaper deals on essentials like utilities, debt, and insurances. Analyze your financial reports to figure out where you can cut your spending.
2. Tap Into Government Support
If you are struggling with cash flow, you can contact the Ministry of Manpower (MOM) to find suitable assistance for you. Lucky for all Singapore’s companies, a 75 percent wage subsidy under the Jobs Support Scheme for firms in all sectors will be extended till May, as “circuit breaker” measures are extended by four weeks.
Under the Jobs Support Scheme, the government will co-fund the first S$4,600 of gross monthly salaries paid to each local employee. The scheme was first announced in February’s Budget and further enhanced in what were termed the Resilience and Solidarity budgets.
Most firms would originally get 25 percent of wage subsidies, with those in the food services sector getting 50 percent, while the aviation and tourism sectors were already receiving 75 percent.
Similarly, to help employers keep paying foreign employees, there is a foreign worker levy rebate of S$750 for each S-Pass or Work Permit holder employed as of Feb 29, which has now been extended to cover those employed as of May 1.
3. Keep Revenue Coming In
In order to keep cash flowing, you should keep your business operations running from home. Utilize a collaboration and communication tool to get everyone connected. With HashMicro’s Work-from-Home ERP Software, you can manage your entire business remotely from home. It allows you to manage attendance, accounting, sales, projects, inventory, and many more through a single platform.
4. Trim Salaries with Care
If your company is severely hit by COVID-19 and there’s nothing else you can do to save your workers and keep your business afloat, trimming salaries can be your last option. However, it must be implemented with the consent of your employees.
Note that MOM will investigate complaints against employers who willfully disregard the advisory and put their workers on extended no-pay leave or other cost saving measures without engaging or seeking the consent of their workers. Aside from that, MOM may also suspend JSS/FWL payouts to these employers until investigations are complete.
5. Soften Impact on Low-Wage Workers
Any wage adjustments may hit low-wage employees harder. Therefore, employers should give ‘special consideration’ to them – especially if they’re frontline workers. As suggested by MOM, employers should also allow and support their local employees to take on a second job in companies or public agencies that could keep operating during the Circuit Breaker to make up for the employees’ loss of income and mitigate the negative impact on their livelihood.
As a leading ERP consultant, HashMicro is more than happy to provide your business with the right automation solutions during the COVID-19 pandemic.