Next month marks the end of JobKeeper, so what should HR professionals be doing now to prepare?

The deadline for the end of JobKeeper is looming and will be front and centre in the minds of many who work for companies that have relied on it to stay afloat during these deeply uncertain times. 

As the March 28 deadline draws closer, companies still relying on JobKeeper will need to make hard decisions about the future of their business and how that impacts their staff. 

HRM speaks to an HR expert about how best to prepare your employees and business for potentially turbulent times ahead.

Important dates to know about

The second extension period for JobKeeper started on 4 January 2021 and extends until 28 March 2021, after this JobKeeper comes to an end. 

This will be a tough time for a number of businesses. As Catherine Cahill, principal consultant at Worksense, says, “[a number of] businesses affected by last year’s lockdown are still affected now”. 

Many of Cahill’s clients had to make the hard decisions of letting go of staff last year during lockdown, and the end of the wage scheme could see other businesses face a similar fate (as well as dealing with the survivor’s guilt of those who remain).

“The difficulty with COVID is that it has been going on for so long and everyone is sick of it,” says Cahill. 

“If businesses haven’t been able to get back to full capacity, they are probably looking at more permanent solutions [to help them recover].”

Cost-saving to avoid redundancies

By now, the majority of employers will have already considered a number of other cost saving options to avoid redundancies. These may include reducing the office footprint by working in a smaller office space or negotiating your lease.

You could also consider cutting discretionary expenses – such as travel, food and beverage and training and event costs – renegotiating contracts with suppliers and temporarily cutting out services and subscriptions you no longer need. 

Once such options have been exhausted, many employers will have little option but to look at reducing their staffing costs, including more creative ways of keeping existing staff on board without being forced to make redundancies (such as offering retraining and redeployment opportunities or standing employees down for a short period).

However, as Cahill states, you can’t force your employees into a working arrangement without negotiating with them first. If you want to reduce overhead costs by asking employees to take leave, work reduced hours or to take leave at half pay, they have to agree to the request; it can’t be forced on them.

“The current industrial relations system doesn’t allow you to do anything [that changes] people in their current conditions, other than stand them down or make them redundant. Anything in between has to be a negotiation between employer and employee,” she says.

Communicating during uncertain times

The majority of employees working in companies still relying on JobKeeper should be aware by now that the end of the subsidy may mean changes within the organisation, but that doesn’t mean you still shouldn’t offer clear and consistent communication about your organisation’s financial position and plans for the future.

This will inevitably bring up feelings of uncertainty or anxiety, says Cahill. At such a time, she believes honesty and kindness will go a long way, especially if you’ve built up goodwill with your employees last year – you don’t want to see that go down the drain for making a misstep this time around.

“Sometimes employers don’t have conversations because they don’t have answers or think employees are going to be angry, or burst into tears, and that will probably happen.” But that doesn’t mean you should sugarcoat anything, she adds.

“Sometimes a business leader will have a motivating conversation with people and make them feel like everything is OK when everything is not OK – and that’s not helpful,” says Cahill. “Be as honest as you can be, and don’t forget that employees may have suggestions of what you might be able to do.”

[Read HRM’s guide to talking about job insecurity here]

When redundancies are inevitable

It’s never easy to make redundancies. In her many years of working in HR, Cahill is keen to emphasise that this part never gets easier. 

“The best thing you can do when you are approaching an employee with news of a redundancy is to be prepared and accept this is going to be a difficult conversation,” she says.

Want to brush up on how to have difficult conversations with ease? AHRI has a short course designed to help. Find out more.

It is also important to ensure you have gone through the proper procedures and have all the relevant information to hand. Cahill recommends looking through the Fair Work redundancy page when you’re first considering making anyone redundant.

Don’t forget that a redundancy is only valid if that role is no longer viable or doesn’t need to be performed anymore. And it’s not a ‘last in, first out’ situation either – decisions cannot be based on tenure. They must be based on the needs of the business. 

Cahill says that, “You’re allowed to look at performance. If you have ten people [performing the same role, for example], you can pick your best five based on performance; but be careful of your wording – don’t tell them that they aren’t valued based on performance. There is no reason to add any extra pain to the conversation.”

Instead, make it clear that the business no longer requires this particular role to be performed because, as HRM has previously reported, mislabelling underperformance as a redundancy can backfire.

“Once you’ve had the hard conversations with your accountants about what you can and can’t afford to do, you need to speak to the people being impacted. Go in well prepared. Resist the urge to be vague… don’t fluff around. Be brief. People know something is going to change. How they react is a reflection of what they’ve been thinking about. So be prepared for it to be emotional.”

People have a range of emotions they display when being confronted with the news of job loss – especially during the precarious times we’re living in. However, if things get too emotional be prepared to arrange another time for the employee to come back when they are able to talk through things rationally.

“If things get ‘too big’ – if there’s a big emotional response – you have to be able to say, ‘I can hear that you’re emotional, maybe now is not the time to continue this conversation. Let’s come back when we can talk this through better.’”

This is a tough time for everyone involved. 

“You need to be as kind as you can. If the person is stressed and upset, you’re still responsible for them at that moment – you still need to get them home safely. Try and put yourself in the employees shoes,” Cahill urges. “You never get used to having that conversation, so don’t forget that it is important to look after yourself as well.”

JobMaker – light at the end of the tunnel?

Despite the end of JobKeeper, the Government is still looking for ways it can continue to support employers to navigate their way through the continuing economic uncertainty with the launch of the JobMaker Hiring Credit scheme.

In summary, this is a new subsidy that will be offered to eligible employers who employ additional job seekers aged 16-35. It applied from 7 October last year until 6 October this year.

The scheme is designed to not only help young people find their way into the job market, but also help to provide a pathway to re-employ new full time workers at a subsidised and more affordable rate than in the previous year.

It is, of course, not an ideal scheme considering it only supports a young portion of the workforce back into employment, but the additional funds that could be unlocked might help some employers to find a way through the challenges of the year ahead, and emerge stronger on the other side.