In the last few weeks, the global economy has felt the pinch of coronavirus in a major way. The stock market has been dangerously volatile, and the federal government has announced a multi-trillion-dollar bailout.
While the media focus has been primarily on the economic impact for large corporations and mom n’ pop shops such as small retailers and restaurants, some of the biggest pain is being felt right in the middle of those two worlds – among early stage or growing businesses who were just getting their feet under them when the COVID-19 outbreak began.
For business, finance, and HR leaders at VC-backed startups or boutique companies that started small and bootstrapped up to business relevance, this is without question a time of tremendous uncertainty. Moving forward, we’ll explore:
- Some of the biggest challenges facing growing or early-stage businesses right now
- Ways growing businesses can address, manage, or outsource these challenges to preserve core function and the ability to keep the work going
How COVID-19 is Creating Challenges for Growing Businesses
During this time, it’s crucial to fully dedicate yourself to protecting your team as individual employees while also protecting the health of your business overall. That requires recognizing each individual challenge and addressing it effectively.
Here are some of the most complex, relevant problems that the leadership team at any growing business must address to weather this storm:
Increased Impact of Each Illness or Leave
Growing businesses operate with lean teams out of necessity. That means each professional manages more individual responsibilities and has a greater impact on overall business function than they would in a corporate setting.
That model works well when you’ve built a great team and everybody is healthy and engaged, but in a scenario like the COVID-19 outbreak, in which employees may need to take weeks off at a time due to severe illness, it is without question an area of weakness.
Creating an effective coronavirus response plan at the early-stage or growing business level requires creating a comprehensive strategy for how you’ll plug holes, rotate responsibilities, and maintain the quality and consistency of your core function.
Required PTO & FMLA Expansion
The Families First Coronavirus Response Act, which goes into effect on April 1, requires that any business with 500 or fewer employees must provide:
- Two weeks (up to 80 hours) of paid sick time at their normal rate for employees who are sick with, experiencing symptoms of, or awaiting a diagnosis for COVID-19
- Two weeks (up to 80 hours) of paid sick time at 2/3 their normal rate for employees who are caring for someone with COVID-19 or providing childcare for minors whose schools or normal daycare facilities are closed due to COVID-19
That means a lot of growth-stage or medium-sized businesses will need to pay employees for significant time during which they are minimally productive. Tax credits to cover these increased expenses have been announced, but that does little to help smaller organizations who may experience short-term cashflow or liquidity issues during this pandemic.
In the short term, you need to be ready for employees to go on leave (as we mentioned above), but you also need to gather your core finance team and figure out how you’ll provide the leave your team members need while protecting your business’ ability to maintain operations in a way that keeps you afloat.
Exposing Lack of HR Scaffolding
Most growth-stage businesses do not have an internal asset dedicated to the Human Resources function. In fact, many early-stage companies have their CEO or CFO also managing CHRO responsibilities.
That system can work well under normal circumstances, but it certainly wasn’t designed to manage a time like this, when HR communication, employee benefits education/accessibility, and leave request processing are so crucial.
That means you need to protect, strengthen, and expand your core HR function and resources to ensure you’re able to address and meet all employee needs during this time. Make no mistake: HR is a critical function within each individual organization working to combat COVID-19. The better your HR function (whether internal or outsourced) is able to understand and address employee health needs in a timely fashion, the stronger and more informed your COVID-19 response can be.
How You Can Get the Outside Support You Need
As we’ve uncovered, there are a variety of areas in which the COVID-19 pandemic is hitting new and growing businesses harder than nearly anybody else in the business space. We’ve also seen that most of those challenges are directly connected to business function and require extensive leadership planning and attention in ways that can be quite intimidating to lean teams with little or no HR bandwidth.
If you’re in one of those leadership positions, things can feel pretty discouraging right now, but the good news is there are resources you can tap into to get the answers you need, shore up your business, and maintain the productivity of your healthy team.
Start Working with a Trusted HR Partner
Growing businesses with internal HR resources typically have highly functional HR leaders who specialize in wearing a variety of hats and working around the clock to get things done. In these types of organizations, one or two people frequently do the job of what would be a fifteen-plus person team in the corporate world.
However, no matter how great they are at their jobs, those professionals need support right now. They need an extra sets of eyes over their work to ensure they’re complying with the latest guidance. They need HR technology that makes it easier and faster to view and process employee requests. They need the human support that makes them feel confident that if they become sick or need to leave work to care for a family member who is ill, they won’t be abandoning their employer to fall apart.
The best way to connect with that support quickly is by contacting an HR consultancy or management firm. They can step in to provide leaders and employees with the latest guidance and educational materials, provide a fresh perspective to enable best practices for human capital management, and pick up the slack on day-to-day HR tasks, empowering your core team to focus on leadership and taking the pressure off those key stakeholders to stay healthy and stay at work.
Connect with Proven Leadership Coaching
Many departmental and overall leaders in start-ups and early-stage companies skew younger. That’s part of what makes the start-up scene so vibrant and energetic. What young leaders don’t always have, however, is vast experience – and they’ve certainly never seen anything like this before.
That’s why it can be so valuable to reach out to veteran business leaders who’ve moved into consultancy. Their perspective can provide valuable emergency response management strategy, both in terms of short-term communication/leadership and planning long-term ways to emerge from this ordeal stronger and better than ever.
They say that two heads are better than one, so when it comes to tackling one of the biggest, most complex business challenges of our time, why wouldn’t you reach out to someone who has navigated an entire career of workforce challenges and complexities?
Launchways is Here to Help!
Based in Chicago, Launchways is the Midwest’s most forward-thinking provider of human resources support and employee benefits brokerage. We have 10+ years of expertise in the fields of employee benefits, business insurance, payroll, human resources, compliance, and more, and we’ve always taken great pride in the work we do both locally within the Chicago startup community.
During this time of incredible need and uncertainty, we’ve been doing what we can to keep our clients, partners, and community business allies up to date on the latest information about COVID-19 and connected with the most impactful possible pandemic management strategies. We’re pretty proud of the resources we’ve created, including…
- Our free, best-practices focused webinars for leaders seeking centralized COVID-19 resources
- Our comprehensive COVID-19 Emergency Resource Center clarifying expectations for business at this time and providing executive summaries of emerging regulatory guidance
- Our toolkit of templates for HR communication, simplifying furlough and layoff notifications
- One-on-one support with our CEO and leadership expert, Jim Taylor, who has over 15 years of HR and benefits experience (book time to chat one-on-one with Jim)
If you’re a growing or early-stage business feeling the pinch of the COVID-19 pandemic, contact Launchways today to see what we can do to strengthen your HR function and empower your leadership in difference-making ways.
Launchways partner and the most active early-stage investors in the Midwest, Hyde Park Angels, has put together a resource center specifically tailored to the needs of growth-stage businesses. Please visit their COVID-19 Resource Center here.