JobKeeper has been a lifeline for employees and employers alike. A 12 month lifeline that is now coming to an end. The coronavirus made us all adapt to a new normal, but now that the safety nets are being withdrawn, is your business ready to stand on its own two feet?
The JobKeeper employee supplement ends on Sunday, March 28 with little to no chance of being extended. While it was been far from a party these past 12 months, has your business fully assessed the impact of a post JobKeeper hangover?
The End of JobKeeper Enabling Directions
Not only did JobKeeper provide a significant cash supplement to employers to pass on to employees, it also meant employers could alter the working arrangements with employees in what was known as the JobKeeper Enabling Directions. With the end of JobKeeper, so too is the end of these enabling directions, which may be more of an adjustments than some realise.
The JobKeeper Enabling Directions were an amendment to the Fair Work Act which gave extraordinary flexibility in working arrangements in an attempt to limit mass redundancies due to the pandemic. These directions enabled employers to among other things, change employee’s hours, their duties performed and even location of work subject to certain conditions being met.
With the end of JobKeeper these enabling directions also end. This may prove equally difficult to employers to adjust to, along with needing to return employees to their previous pre-JobKeeper salaries, now with no cash support.
The ‘new’ new normal
Along with staff, many businesses made adjustments to their business model during the pandemic. Whether it being going online, adding take away or delivery options, selling alternate products and running remote working. There were also rent holidays by landlords and debt deferrals by banks to soften the blow to cash flow.
Business owners need to now decide if the new operating model remains or if a hybrid model persists. And, with interest rates still at record lows, is investment an option to help return to the market with a vengeance?
For some, even a reduced JobKeeper has remained a vital lifeline for businesses hit hard by the pandemic. The ultimate end of JobKeeper may be the tipping point to force some tough decisions such as redundancies or even insolvency.
Getting the right advice
The right business advice can help you plan for both the worst case and best case scenarios. Management Accounting services for example can help provide business owners advice such as:
- What a restructure and reduction of staff could look like.
- Conduct a re-forecast of your cash flow.
- Scrutinise your costs and reduce any non-critical outgoings.
- Investigate your profitability on every product or service.
- Streamline your payables and receivables process.
- Build recurring revenue.
- Look at ways to access credit or introduce liquidity.
- Access remaining government support
While indicators a pointing towards a positive outlook, this doesn’t mean all businesses are doing well. If you are concerned about what your business outlook is following the end of JobKeeper, make sure you get the right advice.
Saige Accountants & Financial Planners offer management accounting services to serve businesses needing to make key decisions. They can analyse your financial data and suggest or forecast the impacts of key decisions so you are more confident in choosing the next steps for your business. Talk to us about avoiding a JobKeeper hangover.