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Lockdown leave, pay cuts, reduced hours: what’s allowed?

Lockdown leave, pay cuts, reduced hours: what’s allowed?

We’ve been getting quite a few questions from our clients during Level 4 lockdown about the responsibilities of employers. We’re not HR specialists or employment lawyers, so we don’t have all the answers. Luckily, the Ministry for Business Innovation and Employment (MBIE) has been busy setting out all the information you need.

Two of the most commonly asked questions are:

1. Can I make employees take annual leave during lockdown?

The short answer here is no. You can talk to your employees and try to come to an agreement about how their annual leave might be applied during lockdown, but you can’t make them take annual leave starting immediately. The only time you can make an employee take annual leave is when an agreement cannot be reached about when the annual leave will be taken – and you must give them at least 14 days’ notice. Get all the details here.

2. Can I make employees take a pay cut during lockdown?

Again, the short answer is no. You can negotiate for a change in pay, hours or duties, but you need to reach an agreement with the employee. It must be set out in writing and the employee needs time to consider the new arrangement.

Remember, you can apply for the wage subsidy or other financial support if your business revenue is suffering under lockdown. Read more about your options here.

Where to find more information

The Employment website, provided by MBIE, lets you navigate all your responsibilities as an employer during lockdown. For instance:

If you’re concerned about your business’s finances during this time, we can help you identify what help you might be entitled to and apply on your behalf, so give us a call – we’re here to help!

How to build a best practice business through planning – A Case Study

How to build a best practice business through planning – A Case Study

Every Best Practice Business Has Value

Building a best practice business takes planning and the execution of documented processes and tasks. You must set goals, have strategies, tactics and action plans. If you are a business owner, then you will understand the driving forces behind competition, supply and demand.

But are you aware of what best practices your business needs in order to perform at the optimal level and stay ahead of the competition and meet your supply and demand expectations?

When there are more businesses for sale, lower prices result. With fewer qualified buyers, a buyers market ensues. In a buyers market, buyers can be selective and value driven – hence the importance of creating value by ensuring you have a best practice business

So, how do you go about ensuring your business has value?

You can start by becoming a best practice business through putting in place goals, strategies, tactics and action plans that build value into your business systems.

A business with good systems, that is not reliant on its owners, is important so that the business can always function seamlessly without the presence of its owners. Ultimately, your business will be more attractive to prospective buyers where you have the systems and processes in place if your plan is to sell at some stage in the future, or if you have a succession plan in place but still want to retain full or part ownership.  

A best practice business has all its systems and processes documented, and this includes your planning documentation, that should be regularly reviewed and updated.

Each unit of the business should be aware of its function with clear and concise processes that are organised into a ‘Manual Set’. Each business unit should have clear goals and objectives with strategies, tactics and actions plans to guide them towards achieving the goals. As a business owner, it is your role as the senior leader to ensure that each and every one in your team is equipped with the ‘tools’ to perform their roles so that the overall company goals are achieved. Each individual contribution is connected to the whole.

It is not your role as business owner to execute on everything, but ultimately, you have the overall responsibility to ensure that all plans, tasks and actions are executed. That is why it is important to have trusted lieutenants to help you with the implementation.

But, what are goals, strategies, tactics and action plans anyway and why are they so important because you have a business plan, right?

It’s a good question, and one we get asked a lot. But here’s the thing, when I ask a prospective client to share their business plan it often surprises me (well actually, I’m not surprised), how little detail they have in their business plans. More often than not, their ‘plan’ is just a ‘guide’ of where they want to be. While this is a good first step, a plan must have a detailed ‘road map’ of how to get to where you want to go.

The challenge that I see is that not every business owner understands the difference between goals, objectives, strategy and tactics.

A business goal should be the target of what you want to achieve i.e. a revenue goal – we want to achieve $1million dollars in total sales by X. 

Objectives are the specific steps you need to take in order to achieve your goals.

A strategy is the; What, Why, Who and How of your plans. I.e. What do we need to do, why are we doing it, who is responsible and how are we going to do it. In most business contexts a business strategy is driven by a competitive need.

The tactics, like in any competitive game, are the moves you make that support the overall strategy. 

The action plan defines who will do what and by when.

When you have these attributes clearly defined, then you have a solid business plan in which to guide your business in a best practice framework. 

I often get asked – well, thanks for defining what I need to have in place. So, how long does my business plan need to be? Well, here’s the short answer, it needs to be as long as you need to cover everything that you can think of to get you to where you want to be. And, once you are at that point, you can actually distill all that information into two pages. Two pages I hear you say incredulously – yes indeed, I say, only two pages. You can download our example here.

Case Study

We recently started a client on the path to building a best practice business. Our client is an engineering firm employing 12 staff and turnover in the $3 to $5 million range. 

Our client purchased an engineering business and merged with another to create a larger customer base with a new brand. The problem was that combining two businesses came with a number of headaches. Different systems and processes, pricing and ways of working all contributed to sleepless nights for the owner.

He knew he needed to make some changes and organise everything to become a best practice business – he just didn’t know where to start.

Our process to help our client involved streamlining systems and processes into having one set of documentation and one way of working across the entire organisation. 

We gathered the financial data and benchmarked performance using tools such as our Business Risk Assessment to work out the gaps and determined areas of focus. We guided the client on documenting everything and helped them pull all the information into a business plan distilled into the one-page-plan I mentioned earlier.

We worked with the client on the drivers of business value, namely: looking after loyal customers, benchmarking performance and working with staff to embrace the changes that had happened in the business.

The four key areas of focus to grow value were identified as follows:

  1. Increase the numbers of customer types that he wanted to do business with
  2. Increase the number of times customers returned for help with further jobs
  3. Increase the average value of each sale
  4. Increase the effectiveness of each process within the business that ultimately benefited the customer

A best practice business owner continually monitors their Key Performance Indicators (KPI’s), and we put in place KPI’s across all key focus areas and benchmarked performance against industry standards to ensure the business was reaching or exceeding its potential. Tracking KPI’s is the result of sound reporting principles and the ability to extract information in a timely and organised manner is crucial to establishing business value.

The Outcome 

It will come as no surprise that the biggest challenge for our client has come from his team adapting to change. Generally speaking, humans don’t like change, however when you put in place a structure that has a logical set of best practice principles, over time even those most resistant to change will come to see that process driven ‘change is for the better’ now each and every team member is clear on their roles and responsibilities and how this impacts the business and the customer.

We are pleased to report that our client is following the plan we created for him, and combined with ongoing monthly guidance from us through our Virtual CFO service and Board of Advice programme he is on track to growing the value of his best practice business

Want to know more?

If you know that your business could benefit from having a best practice structure but are too bogged down in the day-to-day minutiae, then get in contact with us today via email to organise a free no obligation chat. We will listen and then formulate the best strategies to help you achieve your goals. Alternatively, click on the Book A Call button now to get started.

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