PSA: very few businesses can afford to keep paying their staff without revenue

Apologies for treading into a space where I’m just another tech worker writing a public service announcement in a field I’m not an expert in (economists, either ignore me or hit me with your best links), but for people imploring small and medium-sized businesses to continue paying their staff while closed for lockdowns (or while those staff are out caring for children): they almost certainly can’t afford to.

In stable-ish economic situations, you can regard employers as having a huge amount of economic power relative to workers, although it can collapse very quickly even then (Enron was a house of cards, but they went from being one of the most valuable companies in America to bankrupt in under a month).

But here’s the thing: most businesses, especially small ones, do not keep months of cash around. They keep weeks of cash, or in some cases (more than you’d think), days of cash around, and rely on a mixture of revenue and loans to make their outgoing payments. Even many very large businesses rely on short term loans to make payroll (this is actually one place where Enron got into trouble, when they couldn’t renew the lines of credit they used for things like payroll). Being able to afford to make payroll, even once, without revenue is very much the exception even for what you think of as a successful, enviable, business.

Similarly, with regards to “pay your cleaner!”, people will only keep paying their household staff to stay home until they themselves are laid off, and then they will need to stop doing that, because like businesses, most individuals, even very well paid ones, also do not keep months of cash on hand. And likewise at the point where layoffs reach wealthy individuals, they will stop being able to support their local cafes or artesans or small businesses and so on, in fact a lot of them will be in bad trouble immediately (because their mortgages are sized to their incomes).

I don’t have a good solution to this, we will need to trust in the economic and public health advisers to governments to draw the right lines between short term economic shocks to save lives from COVID-19, and major economic collapses. Definitely pay your cleaner and support charities if you can afford to. But businesses aren’t going to save us for more than a week or so: many businesses will need to initiate major layoffs or go into bankruptcy without either renewed revenues or a bailout in the next few weeks.

Edited to add: it’s also not very intuitive if your usual model of a business is that it is venture-backed, ie, it has access to a bunch of cash that it does not have to repay in the short term, but a large number of businesses use debt and lines of credit instead. In these cases, inability to meet interest payments may result in creditors immediately sending your business into bankruptcy or administration even if you did make payroll. Layoffs are almost certain to follow swiftly. Yes, creditors could be generous here, but they are themselves hurting and have upstream pressure from their own lenders, etc.

Working in stressful times

The world-wide flowering of work from home tips is great, but I think what we might all benefit from, now, is working-while-under-extreme-stress tips. These are highly person specific, but for what it’s worth:

Think to yourself “what’s the next thing?” and do that thing, rather than making huge todo lists.

Sometimes the next thing might be stepping away from work for an hour. Really.

Sometimes work is a great distraction. Really.

It’s OK to have meetings that are mostly for the sake of social contact! It’s common for workers to talk about meetings as if they’re at best a necessary evil. For some folks right now, they’re actively a good thing. Virtual coffees and all that, they’re not just for regular work from home isolation, they’re also for pandemic lockdown isolation.

It’s not your job to save the world and also you don’t have the right training. Politicians, public health authorities, and medical professionals have years of experience and/or study in an entirely different field that you don’t have (mostly, I bet there’s someone reading with an MPH or MD or parliamentary experience). Yes they’re confused, contradictory and making mistakes right now because no one is actually good at this. Nevertheless. Social distance and washing your hands and adhering to any lockdowns is basically your contribution, right now. It’s OK to do what you’re told and not feel the need to become a public health expert.

Consider why you’re consuming news. Unfortunately, there are plenty of good reasons for it (eg it’s where you find out what the current public health advice is, you’re tracking family or friends or neighbourhoods, you’re planning to cross an international border or even leave your city any time in the next month) but at least keep your goal in mind. “I need to know whether or not I’m allowed to fly” is different from “I need to know whether I can leave my house” and they’re both different from “I need to know the death toll today in [place I have few ties to].”

Under stress, you might revert to patterns of behaviour you have outgrown or even have done a lot of work to get rid of. You won’t know yourself or be able to predict your own behaviour as well as you usually can. Be kind to yourself if you find yourself doing things that are reactive or defensive.

A lot of people are under extreme stress right now. Likewise, be generous in how you interpret their behaviour. You don’t need to put up with abuse or nastiness, but for things like “you’re repeating yourself a lot” or “you’re planning for the worst case for this project” or “that was one too many tiny critiques in a code review” just keep in mind they’re likely having an extremely bad week too.

5×2: support your community, it’s hurting and scared and it needs your help

Right now the world is facing two new threats: the first is a global pandemic which is spreading rapidly and which might kill 3% or more of people infected, particularly if it hits suddenly enough that there aren’t enough ICU or hospital beds (as has happened in Italy) and many many people go on to die both of COVID-19 and of other things that a hospital would normally be able to treat.

The other is major recessions or depressions following on from the partial shutdown of global trade and the near total shutdown of enormous numbers of industries including airlines, large events, catering, tourism, and manufacturing, and knock-on effects for many industries. This will also lead to many deaths from the consequences of stress and poverty; I haven’t seen a guess at all-cause mortality changes from COVID-19, but it’s surely much higher than direct deaths from the illness. And those who survive will need major support to rebuild their lives and work.

I definitely understand that at a time like this, it makes sense to have savings and be prepared for the future yourself, and I’m planning to, but it’s also a time when all crisis services will be incredibly stressed trying to deal with increasingly sick, increasingly poor, and increasingly scared people, and there is no better time to make sure they have the cash they need, and help them get ready.

My family has decided this week to support 10 charities (over 5 days, 5×2) that we expect need extra funds to deal with what’s coming, and I’m going to share them throughout the week, less to encourage donations to these specific charities as to encourage you to think about where you can give.

My entire family is part of the decision to give, so not all of the charities will meet these critieria, but here’s some I suggest and will apply to my share of our choices:

  • small and nimble, works directly with vulnerable people: an organisation that can turn your cash into a motel room and food parcel or a week’s rent for a member of their community in need is one that needs your money today and can use it in the next month to make a real difference to a person
  • “nothing about us without us”: guided and run by the people it is designed to serve
  • donate cash, not goods: cash can be turned into what someone needs right now, not what a donor thought they might need six weeks ago
  • donate to the organisation’s general funds, not any COVID-19 (or other) specific campaigns of theirs: their other work hasn’t stopped, they need to pay their staff more than ever, etc, trust them to know what their community needs

If you can’t give, you can help by supporting and encouraging your government and large, wealthy employers to provide for:

  • ample sick and carer’s leave for people who might need many weeks off work as COVID-19 roars through their family and friends
  • ample carer’s leave for people whose care services (daycare, school, respite, etc) get shut down
  • crisis payments and systems for people at risk of not making (particularly) rent or mortgage payments or being able to buy food
  • strong engagement with representatives of vulnerable populations about their needs
  • a solid welfare system

Employees needing the most support during an abrupt telecommuting transition

With many employers suddenly transitioning their staff to work from home during the COVID-19 outbreaks, a lot of people are hoping that at least we might get a major transition to permanent support of telecommuting out of the whole thing, by demonstrating a large increase in productivity that it’s assumed follows from working from home.

But working from home is a major infrastructure problem at both a household and a societal level and this will turn out to be a pipe dream if we rely on employees to absorb the cost of long term work from home transitions.

Focusing on the household level, here’s the employee who is best suited to a short-notice work from home: they live in a quiet clean home, with a furnished private office. When they close the door, it stays closed. If they live with children, those children are cared for by another adult, who handles small and medium stresses by themselves. Their pets are quiet or cared for by someone else or both. They have access to a best-in-class business-grade broadband Internet connection. They can do their work with fairly standard office and computer equipment. If they have a disability, their home is already set up to accommodate it well. They enjoy their work well enough and are motivated by the work itself rather than by social connections with their colleagues or by close management. They have an established and sufficient set of social relationships outside the workplace.

And all this is on top of having a transportable profession such as software development, writing, some types of academic research, and some office support jobs.

That’s a lot of ducks to have lined up. Even leaving aside transportable professions, here’s some examples of employees who may be more at risk from work from home, especially from sudden transitions to it:

They share a home with someone who is abusing them, especially if that person is present in work hours. Abuse might include more violence or cruelty following from blaming the victim for stresses on the household, or simply from more access to them. It might also be financial abuse, such as interfering with the victim’s work in order to try and get them fired or get them to quit.

They can’t set up office-like conditions in their home because their home is too small, or they’re a tenant, or they don’t have enough rooms for an office, or they don’t have a private room at all, or they don’t have broadband cabling or their Internet service quality is variable or poor, or they don’t have the money for the required furnishings. Or they have all that but they live with someone who already works from home and claimed the available office space first.

Their home is physically unpleasant due to uncleanliness or bad maintenance (possibly in their control, but might be due to housemates, children, their landlord’s poor maintenance, etc), or nearby construction or traffic noise.

They have a lot of competing priorities at home that draw their attention: other adults are in the house during work hours and are bored or lonely, there’s errands to run, there’s a dog to walk, they get a lot of doorknocking, their family and friends are under the (common) impression that someone who works at home isn’t “really” working and is available for long lunches or drop by chats or can watch other people’s children all day on short notice, etc.

They require workplace accommodations that are difficult to access in their own home, eg an aide, or specialised equipment that needs professional installation, or they’ve been relying on the office for some accommodations such as hard to get foods or a fully accessible shower.

They have an office, but when they close the door, everyone else in the house knocks on it incessantly or issues ear-splitting screams or barks from the other side for hours.

They live with children and those children’s school or daycare is closed, and there’s no other adult in the house or that adult also has a job, so they have to full-time parent/homeschool them on top of having a job.

They live with children and there’s notionally another adult to care for them but that adult hands over everything except perfect behaviour and conditions to them. “The children don’t like the lunch I made! Can you make them one?” “The child has bruised their knee, they need your hugs!” “I don’t understand nappies!” “My video gaming commitments / meditation practice will consume the next three hours, can you watch the children?” (This is a highly gendered co-parenting pattern, your women employees co-parenting with men are more at risk.)

They don’t like their work and they struggle to do it without regular attention from managers or colleagues.

They do like their work OK, but they still rely on regular in-person human interaction, including in ways they may not realise themselves, in order to maintain a regular work cadence or prioritise their work or feel good about their work.

They don’t have sufficient adult social contact without a workplace because they have high social needs, or are a single parent, or live alone unwillingly, or are newly single, or recently relocated.

They’re conflict avoidant and they sometimes deal with conflict by deferring contact with the other person in the conflict. Work from home enables them to ignore chats, decline video meetings, etc in a way that would not be possible in an office. Small interpersonal problems become big ones quickly. (Spoiler: nearly everyone is sometimes conflict avoidant, and nearly everyone sometimes uses electronic communication to defer conflict.)

How do you adapt to these? Not easily, which is why a sudden and forced transition to work from home is in my opinion unlikely to lead to an emphatic demonstration of telecommuting’s superiority, but some provisions include:

  • acknowledge at least some of these concerns, and set aside some budget and manager discretion to expense better internet connections, office equipment furnishings, emergency childcare, ability to rent a small amount of personal private office space
  • initiate or strengthen your support around both mental health and around domestic violence situations and be sure they don’t need access to the office
  • seek advice on whether small gatherings of employees are safe (in the COVID-19 context) and if so, encourage optional cafe meetups and similar
  • actively review with employees who have workplace accommodations whether and how you can provide these in their homes
  • create additional leave plans (paid if possible) for people whose childcare and dependent care plans have fallen apart and cannot be reconstructed
  • consider how you will manage performance reviews and career planning for people who took a productivity hit

Thanks @hashoctothorpe and @leeflower for discussions leading up to this post and identifying some of the patterns listed here.

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Employees needing the most support during an abrupt telecommuting transition by Mary Gardiner is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Lengthy closures of schools and childcare centres will end mothers’ careers

I have very little generally to add to the discussions of COVID-19 right now; if you want facts best to head to the Australian government info site, the US CDC info site, or the WHO info site.

However. one consideration I’ve seen little of: shutting down childcare centres and schools will disproportionately render the mothers* of children in those centres and schools unemployed in the short term and quite possibly un- or underemployed in the long term (gaps in resume during a likely recession, history of being terminated for absenteeism or of short notice resignations).

It’s possible although not certain (see likely recession) that larger and wealthier employers can extend their more valued workers at least some unpaid leave in this situation, but smaller or less well-funded businesses cannot, and less valued workers may not be able to negotiate them even from employers that might be able to afford them.

And unpaid leave is of course a massive strain on households, for many impossible, especially if the childcare centres (which, remember, are themselves often small and precariously funded businesses) keep charging fees.

Obviously the second-order effects of massively disrupting the global and local movement of people are coming for us all, but they’re coming for mothers pretty early on.

* Yes, fathers and other parents and carers too, but mostly mothers.

Cross-posted to Hoyden About Town.