Queries around remote onboarding for new hires reach an all-time high

Remote onboarding, video interviews, and contract hires were the top three queries received by global recruiter Robert Walters in Q1.

Whilst video interviews and temporary hires dominated recruitment queries in February, this has been overtaken by employers asking around how to effectively onboard new hires remotely. So much so that queries around this topic increased by 37% in the last six weeks alone.

Chris Hickey, UK CEO at Robert Walters, comments: “Remote onboarding is not a new phenomenon to us and is something we have experience of when we have previously recruited for temporary or contract hires who are occasionally not based on-site.

“Whilst companies on the whole have been able to alter their recruitment process fairly quickly in response to the Covid-19 outbreak – through the use of digital CV’s, video interviews, and online testing – firms have been less prepared for the challenge of onboarding new talent remotely.

“There are entirely new factors firms have to consider when onboarding which didn’t come into play four months ago – including social isolation, effectively delivering training remotely, measuring output, illustrating company culture & values, and making a new starter feel a part of the team.”

Robert Walters new e-guide – A Guide to Remote Onboarding – outlines how companies can continue hiring the skills they need and embed new employees into the organisation remotely.

Chris Hickey shares his tips on how to keep new hires engaged:

  • Creating a personal introduction video: A lack of face-to-face interaction can be isolating, so using video to express your enthusiasm for a new employee joining the company can help alleviate this. Any personal touch allows a new starter to understand team culture, allowing them to fit in more seamlessly once staff start to migrate back to the office.
  • Provide reassurance: In the current climate, security and support are essential to quell anxieties or uncertainties new employees might have with starting a new role remotely. You’ll need to communicate regularly and answer any questions new starters have about how the onboarding process will work. In addition, include new starters in internal updates, e-newsletters, project updates and share useful links.
  • Embed into the team culture: Impress upon your new hire a sense of community from the outset by getting them involved in the team. Add your new team member to WhatsApp or Skype groups, and schedule social video calls to introduce your new starter to the rest of the department. Consider any team rituals that you can continue remotely and get the new starter involved in, such as virtual quizzes or drinks. Most importantly, prioritise small talk and getting to know your new hire, before turning to work chat.
  • Provide a new starter pack: This is something which typically gets left until induction week. But providing useful links to resources such as HR contacts, internal processes, training sessions, how to request leave, FAQs and benefits information, will allow many questions to be answered prior to your new hire’s start date. To increase engagement, make your new starter pack interactive with short quizzes about the company’s key messages and processes – you want your hire to feel they are integrating into your organisation before they go online on day one.
  • Provide an organisational chart: Remembering names and roles can be difficult even when you are seeing people face-to-face daily as a new starter, so when remote onboarding it is important to help an individual get to grips with the organisation structure and ‘who sits where.’ The best way to do this is to provide an organisational chart in your starter pack.
  • Make HR paperwork paperless: One of the most dreaded parts of starting a new role are the hordes of paperwork that new hires are required to sign and return. While many businesses have already transitioned to digital paperwork, a centralised platform such as Gusto can help you to keep all documentation in one place. You can also send out paperwork digitally using tools like Docusign or DocHub, but be sure to send them well in advance of your new hire’s start date.
  • Test your technologies: Confirm that all technology you make available to your new recruit is in working order before their first week. Assign someone in your business with technology expertise to be available to set up systems prior to the start date to ensure your new starter isn’t troubleshooting on day one.
  • Develop a training programme: Think about all the processes you may need to provide training on to support your new recruit in performing their job. This may include things you deal with as they come up in an office setting, such as accessing the company intranet, accessing templates and key files, or bookmarking sites they will use on a regular basis.
  • Create a feedback loop: Digital onboarding is a learning curve for all parties, so there are bound to be teething issues when implementing it for the first time. After week one, be sure to ask your new team member what can be improved. Perhaps they could have benefited from a more organised system, or would have appreciated fewer meetings and more down time to get settled in. It’s important to take into consideration how different personality types may react to a novel situation, and you won’t be able to improve your process if you don’t ask.
  • Be patient: Even if your new hire is accustomed to working remotely, a digital onboarding process will be navigating completely new territory for both managers and employees, so errors and miscommunications are to be expected during the first few weeks. Where a new employee may go wrong, be understanding and ensure they have the support to overcome and learn from any errors.
  • Prioritise their wellbeing: Your new starter will want to impress and overwork to let their employer know they can be trusted, resulting in the potential to work after hours and be at risk of burn-out. Make sure you instil the importance of unplugging and maintaining work-life balance from the outset. Share how you personally structure your day so your new hire follows suit.

Borrowing could hit £300 billion this year as costs of coronavirus continue to rise

Since the start of the coronavirus crisis, it has been clear that it will have a huge economic and fiscal impact.

It was right that the Government put public safety first by imposing the lockdown – and that it acted swiftly and decisively to support the economy. But both of these actions come at a heavy and continuing cost. The Office for Budget Responsibility recently predicted that the deficit for this coming year is likely to comfortably exceed any since the Second World War.

The Centre for Policy Studies, the leading centre-right think tank, has been working to estimate the ongoing cost of coronavirus to the Government’s finances, incorporating official data as well as estimates from the OBR, Institute for Fiscal Studies and others.

The CPS’s coronavirus counter, overseen by Caroline Elsom, a Senior Researcher at the think tank, suggests an estimated £127 billion in direct bailout costs and £119 billion in indirect costs such as lower tax revenue, based on the OBR scenario of a three-month lockdown followed by three months of looser restrictions.

When added to the £55 billion of borrowing already forecast for this financial year this produces a deficit of £301 billion, representing approximately 15% of GDP. This total figure is nearly double UK public expenditure on health, which came to £150 billion in 2017/18 and £153 billion 2018/19.

You can find full details of our calculations and methodology in the accompanying CPS briefing note. We will be revising and updating this in the light of new data, and welcome all suggestions.

Robert Colvile, Director of the Centre for Policy Studies, said: “The Government has acted throughout this crisis to save lives and protect livelihoods. But while it is clear to everyone that extraordinary times require extraordinary measures, they also incur extraordinary costs. It is vital to get the most accurate possible picture of the burden the Government is taking on in order to assess the full scale of the rebuilding that lies ahead.”

Caroline Elsom, Senior Researcher at the Centre for Policy Studies, said: “Counting the full cost of the coronavirus outbreak is vital to managing the ongoing crisis and planning future steps. As the economic impact becomes clearer, we will continue to track what this means for our public finances to help steer the country through to recovery.”

StepChange welcomes FCA forbearance guidance on motor finance and payday loans

StepChange Debt charity welcomes the Financial Conduct Authority’s draft new guidance on how coronavirus-related forbearance for affected customers should be offered by providers of motor finance and payday loans. However, the charity believes that further measures are likely to be needed further down the line.

Richard Lane, Director of External Affairs at StepChange, says: “The proposed new measures on car finance and high cost short term credit fill some of the gaps that were left in the previous approach required by the FCA to firms’ offering of forbearance to people suffering loss of income due to the pandemic. This is helpful to give people time to work out what their future situation may hold, but the one-month freeze on payday loans is unlikely to be long enough to allow people to take a realistic view of the future.

“What is becoming urgent is to gain some understanding of what lenders will do at the end of the initial forbearance period – we think it is unlikely that most people whose income has been affected will be fully back on their feet and able to resume normal payments plus repayment of the sums accumulated during the forbearance period by that time. It’s likely that forbearance periods will need to be extended.”

StepChange will submit a response to the FCA consultation by the deadline on Monday 20 April.

The Nottingham keeps branches open and triples charitable donations

As the impact of Coronavirus is felt across the UK, Nottingham Building Society has provided information on how it’s supporting members and doing the right thing for the communities in which it operates through the pandemic and beyond.

Keeping branches open

As an essential service, the Society has worked hard to maintain services for members, keeping branches open for those that need it the most. All building society branches are currently open albeit on reduced operating hours. The Society has advised members they should only visit branches for compulsory activity such as cash withdrawals for essential purchases and social distancing is being adhered to with only one customer allowed into a branch at a time and customers that are waiting outside are asked to remain 2 metres apart.

David Marlow, Chief Executive Officer, commented; “As an essential service, we remain committed to providing members with vital access to their money and help and advice at this particularly challenging time. We aim to continue to open our branches where we can do this safely for both our members and teams alike.

“Our dedicated teams are overcoming multiple obstacles to maintain services for members. I have been in awe around how our teams have come together to serve their members locally in some cases even helping vulnerable customers secure their weekly shopping. I am enormously grateful for the way in which they have supported each other and our members.”

Looking after its members

The Society is acutely aware that a key concern facing many of its members is the financial impact of these unprecedented times and has taken steps to support borrows and savers alike.

In addition to offering payment holidays to its mortgage customers, the Society has vowed to protect savers and announced it is freezing rates on its savings accounts for the next 3 months, despite the Bank of England having reduced the bank base rate twice during March down to 0.1%. David Marlow continued; “Our mutual ethos and financial strength means we have the ability to provide our members with some support during this national emergency.

“At a time when household finances are being squeezed and are facing massive uncertainty, deciding not to pass on interest rate reductions for the next 3 months is just another way we are looking after our members and demonstrates the building society has always been the best place for their savings.”

Doing the right thing for its communities

In addition to supporting its members, the Society is also extending its support to the wider community. Although its corporate and social responsibility programme has traditionally aligned to themes of supporting employability, financial education and literacy and tackling homelessness, this is being extended to support those in most need including:

  • Alleviation of poverty – supporting communities facing financial hardship and accessing funds remotely for the first time
  • Reducing social isolation – reaching out to those members of our communities at risk of social isolation
  • Supporting education and young people – supporting schools, parents and community groups engaged in home-education and continuing to drive aspiration for the future in young people
  • Supporting our charitable partners – supporting emergency activation activity and minimising on-going costs to relieve the pressure

The Society has announced it will be trebling its planned charitable donations for the first half of 2020, and is making a six figure investment immediately available to help fund activity in these key areas across its communities. Further details of those causes set to benefit will be shared over the coming weeks as the funds find their way to the frontline where they are most needed.

David Marlow concluded; “The Nottingham has a long and proud history of doing the right thing and in times like these, this is more important than ever. As a mutual organisation we are committed to supporting our communities and, although we realise these are worrying times, we know we will get through this together, looking after each other and supporting those that need it most.”

Significant fall in mortgage product numbers as COVID-19 hits lenders

Mortgage insurer, AmTrust’s, latest Mortgage Loan to Value (LTV) Tracker has today revealed a significant drop in the number of products available to borrowers with either 5% or 25% deposits, as lenders react to the COVID-19 pandemic and the UK lockdown.

Over the last 12 months, the trend for product numbers has been upwards, however this latest iteration of the Tracker shows how COVID-19 has resulted in many lenders pulling products right across the board.

The AmTrust LTV survey reviews the number of actual product options available to first-time buyers with either a 5% or 25% deposit based on the price of an average first-time buyer house from UK Finance December 2019 figures, the price of an average house as outlined by the February 2020 Halifax House Price Index, and the price of a house at the starting tier of stamp duty land tax, £300k. Below this amount first-time buyers do not currently need to pay any stamp duty.

In order to do this, AmTrust uses one of the online mortgage search engines which includes deals available to both mortgage advisers and direct-only.

Product availability has dropped sharply in recent weeks, with two-thirds of products being withdrawn for those borrowers who have a 25% deposit, while the market has seen a similar fall in product numbers for those with a 5% deposit, albeit slightly less in percentage terms.

AmTrust said it was understandable, given the current environment, that lenders had withdrawn large numbers of products, especially specialist lenders who could not rely upon on deposits in order to fund their activity.

It said it hoped lenders would continue to see the value in risk-mitigation products such as private mortgage insurance which would give lenders – particularly those offering higher-LTV products – greater peace of mind about their ability to deal with any payment issues in the future.

Patrick Bamford, Business Development Director at AmTrust Mortgage & Credit, commented: “In a very true sense, these product numbers need to be looked at in isolation, because they differ so greatly to the overwhelming trend of the last 12 months, which has seen a concerted increase in product availability.

“Now, we are in a very different environment. The COVID-19 pandemic hit fast, and it’s completely understandable that lenders have had to react quickly, and many hundreds of products have been withdrawn, for borrowers fortunate to have a 25% deposit or those with a 5% deposit.

“The slight saving grace for low-deposit borrowers is that their product choice has not dipped – in percentage terms – by quite the same amount, however we’re still at an early stage and lenders will no doubt continue to react as the days pass and we get a greater understanding of how this crisis will play out.

“However, it’s still important to recognise for both first-time buyers and those seeking to remortgage, that the mortgage market remains open for business, products are still available, and especially where lenders can utilise automated, or desktop, valuations – rather than relying on physical inspections – cases are progressing to offer.

“The lending community has needed to act fast – especially given the overwhelming demand for mortgage payment holidays – but it is testament to its resilience that first-time buyers can still access finance and, where the conditions allow, can still see their cases moving forward.

“The industry should be applauded for this, however we must also recognise that market conditions might well get worse, before they get better.”

Average monthly/annual payments slightly up
The AmTrust Mortgage LTV Tracker also looks at the price differential between those borrowers who can put down a 25% deposit, compared to those with a 5% deposit.

AmTrust has pointed out however that these statistics are taken from a period before the current COVID-19 lockdown was put in place and must therefore be reviewed in this context, with the assumption that significant changes have taken place in more recent weeks.

The differential between the average rates taken by those with 25% deposits, compared to those with 5%, has remained the same at 1.56% as 75% LTV average rates increased to 1.48% and 95% LTV average rates increased to 3.04%.

Those with 5% deposits are still (on average) paying over 51% more each month and year for their mortgages when compared to those who are able to put together a larger deposit.

Those with a 5% deposit continue to pay just over £1k per month on average for their mortgage, while those with a 25% deposit can expect to pay £677. This is the third iteration of the LTV Tracker where the monthly amount for those taking out a 95% LTV mortgage has been above the £1k amount.

AmTrust said that, even with cuts to Bank Base Rate, the assumption must be that rates would continue to edge up, and that lenders would be even more focused on de-risking their mortgage books.

What we really need is a centralised fiscal response and a single EU debt instrument issue

One of the reasons the market is “cheering” any hint of a potential end to the lockdown is the hope of limiting the damage to the real economy caused by COVID-19. Developed world governments decided to go into lockdown knowing that it may cause the deepest recession we have seen since the 1930s. We are talking about millions of jobs being lost, kids and students not being able to go to school, etc. This is even worse for the developing world where the majority of jobs are manual labour. In economies like Bangladesh, India, Mexico and some African countries, working from home is not an option. You don’t work you don’t eat, it’s as simple as that. Leaders in the developing world have to weigh the cost of the lockdown vs the cost of letting people go about their daily activities and dealing with the consequences. There are no easy options.

Morgan Stanley, JP Morgan and Goldman Sachs are predicting that US Q1 GDP growth will be hit by between 5% and 10% with Q2 GDP falling at the annual rate of 25% to 30%. We have not seen anything like this since the 1930s. But this might already be priced into the market as everyone is talking about it. So, the real question is whether instead of a great recession, we end up with a depression? In other words, permanently higher unemployment.

During the 2008 crisis it took around two years for the MBS markets to seize and take its toll on the wider market and the economy. Things are happening a lot faster this time. It took two weeks for the 20% plus market correction in equities credit (both IG and HY). It took three to four weeks for layoffs and a huge contraction in GDP. This means some countries could start reporting double-digit unemployment in a matter of months not years.

The good news this time around is that most developed world central banks have stepped in immediately to support the financial system. They threw the whole kitchen sink at this crisis making sure we don’t have any nasty liquidity surprises. The ECB will spend a total of 1.1 trillion euros on Eurozone bonds over the next nine months, the most it has ever spent on assets in such a short period of time.

Now it’s time for fiscal stimulus to start feeding through to support the economy. The trick here is to funnel the money to households and not only offer credit lines to corporates. We have to fix the demand issue when it comes to households and not only the insolvency risk of the corporate sector. So if fiscal stimulus is not reaching households fast enough and is not targeted enough we might get into a depressionary scenario very quickly. This is especially true for the so-called gig economy where people could get laid off quickly and without compensation.

The eurozone is estimated to have shrunk 10% and we believe the worse is still to come. Italian PMI for hotels, restaurants and other hospitality sectors shrank to 15 in March. These aren’t numbers from a recession. It’s an economic disaster, depression-like dynamics. In times like these if we don’t get a powerful and coordinated fiscal response, individual countries would start looking to exit or at least challenge the status quo, looking towards protectionism.

One of Europe’s challenges is that it suffers from policy limitations. There is a common currency with a single central bank but no common fiscal authority. We are seeing some serious firepower from the UK, Spain and Italy but what we really need is a centralised fiscal response. The simplest and quickest way could be through a single EU debt instrument issue. So-called Coronabonds would be a form of debt mutualisation, which has been criticised by Germany during the last round of talks. The problem is that Germany still sees this solution as equal to accepting a lack of budgetary discipline for southern European countries. Germany appears to not realise that now is really not the time to have such complicated arguments. By holding out on a point of principle, Germany and the Netherlands are risking permanent impairment of some sectors of the European economy and its consumer demand. They are probably worried that once the first Coronabond is issued the floodgates to risk-sharing debt instruments will open.

The SURE fund loan solution is a good start, in addition to the national level policies, although we do not know whether €100bn is anywhere near what’s needed. If this solution is essentially a pan EU version of Kurzarbeit it might be sensible, as the people benefitting from this would claim unemployment anyway, and it at least gives companies breathing space regarding salaries, which for many businesses are a large portion of the fixed costs.

The EU tends to learn and evolve during times of crisis so let’s hope this time it’s the same. We hope European policymakers, just like central bankers, use what was learnt a decade ago and will be quick to respond.

By Artur Baluszynski, Head of Research at Henderson Rowe

EU to retaliate: last thing we need now is the EU-US trade war

Yesterday, the European Commission announced the European Union will impose tariffs on US exports of lighters, furniture coatings and playing cards. “The EU is adopting measures in reaction to the U.S. extension of its import duties on steel and aluminium to certain derivative products,” a Commission spokesperson told POLITICO.

In response, Luca Bertoletti, Senior European Affairs Manager at the Consumer Choice Center, said that “this move from the Commission is very dangerous. In a moment of crisis such as this, it appears counterproductive to impose tariffs on US products especially since the US is one of the leading partners to fight the battle against COVID-19.

“There is always what’s seen and what’s unseen. By aiming to hit the US where it hurts in a trade war, the EU will end up hurting its own consumers, not only US exporters. A peaceful transatlantic trade dependency, not a destructive trade war should be the way forward,” said Maria Chaplia, CCC European Affairs Associate.

“Trade wars are a lose-lose game. Trade agreements, on the contrary, are not only rewarding because they benefit consumers on both ends, but also because they build bridges of partnership and cooperation between nations. Sometimes victory is about choosing to restrain from retaliation. Especially, when it comes to trade,” concluded Chaplia.

OECD updates G20 summit on outlook for global economy

Increasingly stringent containment measures needed to slow the spread of the Coronavirus (Covid-19) will necessarily lead to significant short-term declines in GDP for many major economies, according to new OECD projections.

OECD Secretary-General Angel Gurría, in preparation to the G20 Virtual Summit that took place yesterday, unveiled the latest OECD estimates showing that the lockdown will directly affect sectors amounting to up to one third of GDP in the major economies. For each month of containment, there will be a loss of 2 percentage points in annual GDP growth. The tourism sector alone faces an output decrease as high as 70%. Many economies will fall into recession. This is unavoidable, as we need to continue fighting the pandemic, while at the same time putting all the efforts to be able to restore economic normality as fast as possible.

“The high costs that public health measures are imposing today are necessary to avoid much more tragic consequences and even worse impact on our economies tomorrow,” Mr Gurría said. “Millions of deaths and collapsed health care systems will decimate us financially and as a society, so slowing this epidemic and saving human lives must be governments’ first priority.

“Our analysis further underpins the need for sharper action to absorb the shock, and a more coordinated response by governments to maintain a lifeline to people and a private sector that will emerge in a very fragile state when the health crisis is past.”

Mr. Gurría welcomed the outcome of the G20 Virtual Summit, hosted by the Saudi Presidency, and the resolve shown by the G20 members to use all ammunition to support people and SME’s. In his statement, Mr Gurría built on his recent call for a “global Marshall Plan” to counteract the pandemic’s effects. To “inoculate” economies to current and future shocks, he urged the G20 Leaders to act immediately, to:

  • Recapitalise health & epidemiological systems;
  • Mobilise all macroeconomic levers: monetary, fiscal, and structural policies;
  • Lift existing trade restrictions especially on much needed medical supplies;
  • Provide support to vulnerable developing and low income countries;
  • Share and implement best practices to support workers and all individuals, employed and unemployed – particularly the most vulnerable;
  • Keep businesses afloat, particularly small and medium-sized firms, with special support packages in hardest hit sectors such as tourism.

Mr Gurría stressed that the implications for annual GDP growth will ultimately depend on many factors, including the magnitude and duration of national shutdowns, the extent of reduced demand for goods and services in other parts of the economy and the speed at which significant fiscal and monetary support takes effect.

In all economies, the majority of this impact comes from the hit to output in retail and wholesale trade, and in professional and real estate services. There are notable cross-country differences in some sectors, with closures of transport manufacturing relatively important in some countries, while the decline in tourist and leisure activities is relatively important in others.

The impact effect of business closures could result in reductions of 15% or more in the level of output throughout the advanced economies and major emerging-market economies. In the median economy, output would decline by 25%.

Variations in the impact effect across economies reflect differences in the composition of output. Many countries in which tourism is relatively important could potentially be affected more severely by shutdowns and limitations on travel. At the other extreme, countries with relatively sizeable agricultural and mining sectors, including oil production, may experience smaller initial effects from containment measures, although output will be subsequently hit by reduced global commodity demand.

There will also be some variation in the timing of the initial impact on output across economies, reflecting differences in the timing and degree of containment measures. In China, the peak adverse impact on output is already past, with some shutdown measures now being eased.

The OECD has committed its expertise to support governments in developing effective policies in any sector necessary to slow the pandemic’s spread and blunt its economic and societal effects – from health, taxes, labour and employment to SME’s, education, science and technology, trade and investment and more. Through its brand-new platform launched in response to the crisis, OECD provides timely data, analysis, advice and solutions as well as information on policy responses in countries around the world.

Small businesses facing mental health crisis as Coronavirus piles on the woes

UK small business’ previous positivity about their future performance is being overshadowed by stress, anxiety and sleepless nights over access to finance according to research from Liberis, a fintech on a mission to reshape small business finance for good.

While an encouraging 61% of small businesses in the UK questioned before the Coronavirus outbreak were confident of success in 2021 and beyond, mental health and wellness issues are currently impacting almost nine out of ten (86%) as a direct result of difficulties in raising finance and managing cashflow within their business.

The research, which contrasted the attitudes and behaviours of UK small businesses with their peers in the US, found that 83% of business owners suffer from anxiety and 81% from sleepless nights as a direct result of worries over raising finance. A further 75% also said it had impacted their personal relationships. (This compares to 91%, 85% and 86% respectively for small businesses in the US.)

Financial concerns have also led to more than two thirds (69%) of UK small businesses feeling the need to forego personal obligations (dinner with friends, parents’ evenings, and even weddings) compared to 75% of small businesses in the US.

Rob Straathof, CEO at Liberis, says that the financial community should do more to relieve the stress felt by small businesses: “Access to finance should not be a stressful experience,” he says. “While the Government should be congratulated on the measures it announced in the budget and its subsequent £330 billion loans package, it is critical for the support to be distributed as quickly as possible if businesses are to be supported through the current crisis. We need to work with the Government to allow for quick underwriting and access to finance that works with fluctuating sales and won’t tie the business down in the long-term. Small businesses don’t have time to wait on legacy systems and approvals.

“There will also be life after Coronavirus,” says Straathof, “and we need to listen to small businesses in addressing their concerns. Working from home and social distancing are both issues we have never faced before, and while businesses will need support in the immediate term, we also need to look to their longer-term needs. Our goal is to reshape small business finance for good and that means providing funding that is appropriate, sustainable, and that gives them access to funds quickly when they need it.”

Straathof adds that almost half (48%) of small businesses believe that access to finance is the single biggest support they need to achieve their future potential: “We need to provide finance that ‘flexes’ with their customer sales, where the business pays less when times are difficult, and more when business is booming again,” Rob continues. “We need to be supporting their mental health by making access to finance easier and more transparent, not adding to it with unnecessary delay, confusion and intransigence.”

As well as speaking to UK and US firms, the research also looked at the experience of Scandinavian businesses in Denmark, Finland, Norway and Sweden. By every benchmark, Scandinavian firms track below their UK/US counterparts although 81% still admit to being stressed and 85% suffer from anxiety when trying to access cash.

Liberis provides an innovative funding solution which aligns with the needs and capacity of the small business. The cash advanced is paid for by the small business as a fixed, agreed percentage of the business’ customer card takings. The solution is ideally suited to businesses such as retailers and owners of restaurants, bars and clubs, since they pay Liberis when their customers pay them. This supports the business with its cashflow and takes into account seasonal peaks and troughs.

Coronavirus lockdown: 10 steps SMEs can take to still be in be in business this time next year

The small business champion ParcelHero says the new Government lockdown doesn’t have to spell the end for SME businesses. It has issued a ten-step guide to making full use of the Government’s latest coronavirus SME aid schemes.

The UK courier services expert ParcelHero says that, even following the tough new Government measures closing non-essential stores and imposing travel restrictions, the majority of the UKs 5.9 million SME businesses and retailers will survive the coronavirus outbreak if they get to grips with the latest Government SME assistance packages quickly.

Says ParcelHero’s Head of Consumer Research, David Jinks MILT: “Hard though it is to believe right now, as the full impact of the virus only begins to take hold, but there will be a time when this is over. Here are our top ten key ways SMEs can get the best out of the Government’s rescue packages, and survive this crisis

1 – Retain Key workers, even if they are not essential right now

The Coronavirus Job Retention Scheme (CJRS) enables employers to access grants, by the end of April at the latest, from the UK’s tax authority to allow them to keep paying staff. The government says 80% of gross wages in the private sector, up to £2,500 a month, for those not working and who would otherwise have been laid off, will be covered by these grants from HM Revenue and Customs.

SMEs will need to designate affected employees as ‘furloughed workers,’ and notify their employees of this change.

2 – Don’t exploit the system

The latest guidance says that employers can choose to top-up CJRS pay, either for the unfunded 20% of pay or the amount above £2,500 for higher earners, but this will not be a formal requirement to obtain access to the scheme. Our advice is that those companies who do top-up pay will be more likely to retain key workers post-crises. We also advise companies not to try and manipulate the scheme. Where a business can carry on without those physical interactions, for instance by working remotely, it should be business as usual. The scheme isn’t designed as a wage subsidy for SME employers.

3 – Reclaim sick pay coverage for current workers

A new scheme will shortly be available to allow SMEs to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to Covid-19. This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of the virus. Employers should maintain records of staff absences and payments of SSP, but employees don’t need to provide a GP fit note. The Government says it will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

4 – Investigate potential CBILS Government backed loans

The newly founded British Business Bank’s Coronavirus Business Interruption Loan Scheme (CBILS) facilitates business loans to smaller businesses that are viable but unable to obtain finance due to having insufficient security to meet the lender’s normal requirements because of the Covid-19 crises. In this situation, CBILS provides the lender with a government-backed 80% guarantee against the outstanding facility balance.

The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.

5 – Be cautious of CBILS risks

CBILS comes with strings, however. The borrower always remains 100% liable for the debt. Any loan of over £250k will need to be secured by company assets. SMEs should ask themselves; do you really need to borrow against a secured loan now?

6 – Read the small print of CBILS’ terms

CBILS is for borrowing proposals which, were it not for the current COVID-19 pandemic, would be considered viable by the lender. Research how much more generous the CBILS’ terms really are than the suspended Enterprise Funding Grant (EFG) scheme SMEs may have applied for previously. ParcelHero believes it is vital the Financial Conduct Authorities’ CBILS guidance is taken into account by lenders, that they must take on board the spirit of the new loan scheme and not stick to former ‘peacetime’ criteria. Otherwise the nation just undertook to back 80 % of loans banks would make anyway.

7 – Defer VAT and Income Tax payments

An automatic VAT deferral will apply from 20 March 2020 until 30 June 2020. No applications are required for the deferral and businesses will not need to make a VAT payment during this period. And, for the self-employed, Income Tax Self-Assessment payments due on the 31 July 2020 will be deferred until the 31 January 2021.

8 – 12-month business rates ‘holiday’

The Government has announced it will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. SMEs’ don’t need to take any action to qualify for this. It will apply to their next council tax bill in April 2020. However, local authorities may have to reissue companies’ bills automatically to exclude the business rate charge; they will do this as soon as possible.

9 – Grant funding of up to £25,000

Retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000 will qualify for the Retail and Hospitality Grant Scheme. This provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses in these sectors with a rateable value of between £15,000 and £51,000, they will receive a grant of £25,000. The local authority will write to all SMEs eligible for this grant shortly.

10 – The HMRC Time To Pay Scheme

One final useful Government measure is the announcement that all businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements will be agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. If an SME has missed a tax payment or might miss its next payment due to COVID-19, it can call HMRC’s dedicated helpline: 0800 0159 559.

Concludes David: “Those SME companies that make full use of the help on offer from Government, but don’t commit to schemes that might become a significant burden in the future, will be in a significantly healthier position than looked likely just a few days ago, even following the new Government lock down. And the final good news is that, despite all the horror stories of overstretched online food stores, and escalating delivery times for some e-commerce giants, the majority of UK and international destinations are still well-served by couriers, to ensure SME’s goods continue to get to customers safely. Our live UK courier services guide constantly updates which courier services are currently available to a particular destination.”