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Company in difficulties? How to create financial breathing space

10 June 2022 Ellen Van Grunderbeek Employers

The Covid pandemic, the conflict in Ukraine, rising prices (energy and otherwise), a growing wave of bankruptcies... These are turbulent times, and perhaps your company is also in turbulent waters? These tips help you create financial breathing space.

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1. Seeking out for hidden costs

Our first tip: pinpoint and analyse your hidden costs. Could it be your company is incurring expenses that are not (or no longer) necessary? Here are some examples.

Overtime

Do your employees work a lot of overtime? If so, you should check whether the overtime is really necessary, and whether you can find a solution to organise the work more efficiently. Try to keep overtime to a minimum, so that you don't have to pay overtime.

Flexible contracts

Deploy your permanent staff optimally and to the maximum, so that you can phase out any contracts with freelancers and interim staff.

Long-term illnesses

Under the motto 'prevention is better than a cure', it is best to have a preventive absenteeism policy, with attention for the well-being of your employees.

2. Smarter payroll

A wage policy with an attractive net wage for and tailored to your employees, and the lowest possible employer costs is a win-win. After all, you have more left over to invest in your organisation, and in return you gain engaged and satisfied employees. But what are your options?

In addition to a fixed salary that complies with the pay scales, you should also consider extra-legal benefits that are often interesting from a parafiscal point of view, such as meal vouchers, eco vouchers, group insurance, expense allowances, the result-related bonus (CBA 90), a profit bonus, an innovation bonus and the private use of a mobile phone.

You can also offer your employees the option of converting part of their salary into additional holidays. This way, you don't have to pay extra, but your employees can enjoy more free time.

Your employees might also be willing to make their contribution, knowing that there will be no or fewer redundancies as a result. For instance, you can include a bonus-free year or agree on a wage reduction (temporary or otherwise) by mutual consent. The management itself can set a good example.

3. Adjusting working time

You can also make agreements with your employees regarding working hours . You can find out whether individual employees are prepared – temporarily or otherwise – to work fewer hours per week. 

A further option is a collective reduction of working hours. For example, by reducing the full-time working hours in the company from 38 hours to 35 hours per week, your employees will continue accruing social rights as full-time employees, but will work fewer hours per week, meaning your wage bill decreases. Consultation with the trade unions or the employees is required, and the work regulations must be amended.

4. Claiming temporary unemployment

Temporary unemployment was created to absorb economic shocks, and to avoid having to lay off employees when there is less work. Your employees will then receive temporary unemployment benefits. By reducing the wage bill in this way, you can postpone any dismissal decisions somewhat. The relaxed procedure runs until 30 June 2022. Changes are to be expected after that date.

5. Share your staff

Another option is to exchange employees, either internally: between divisions, or externally: with other companies. Here are some examples:

  • You can flexibly deploy your employees between departments, depending on where there is more/less work.
  • If there too is little work for your staff, you can temporarily share your staff with other employers who just need an extra pair of hands (or vice versa).
  • If you have positions where transition is imminent, you can work on career transitions in the medium term to regularly reorient your talents.
  • If you cannot keep certain profiles (full-time), think about more permanent partial situations.
  • If there are any vacancies in your company, try to fill them in internally first.

Employee sharing gives you the opportunity to bridge turbulent times, while keeping talented employees tied to your company.

What if dismissal – collective or otherwise – is the only way out?

If you have applied the above tips, but still need to dismiss, the classic dismissal rules apply. If you are recognised as a company in difficulty or undergoing restructuring, you can – in the event of dismissal with payment of a severance pay – pay the severance pay in monthly instalments.

If you need let go of several employees, bear in mind that there may be collective dismissal or multiple dismissals.

Start creating financial breathing space

Our experts are ready to inform, advise and support you.

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Written by Ellen Van Grunderbeek

Legal advisor at Acerta

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