As the UK Chancellor prepares the biggest peacetime package of economic assistance this country has ever known, shrill pleas for aid from the business community will be ringing in his ears. But as business fixates on what the country can do for them, they should also be aware that the Chancellor will be haunted by the bailout of the banking system ten years ago. This time, unless he decides to disintermediate business and issue a universal basic income directly to the people, rescue will come with far more conditions and consequences.
The full-scale sovietisation of the UK economy for several months, or potentially more, will explode the country’s budget deficit, something already precipitating a modest run on the pound. The resulting debt burden could take a generation to clear if the global economy also goes into a downturn, potentially changing the country’s relationship with business in dramatic ways.
The debate about stakeholderism and the role of business in the shadow of the financial crisis has lurched forward in fits and starts. Yet even its adherents would concede that trade-offs between interest groups often happen at the margin of management strategy. Rarely is it the case that business needs to make absolutist calls between the needs of employees, suppliers and the owners of its capital. In the days ahead however, precisely such dilemmas will be posed. Already government has pleaded with business to stay the executioner’s hand on mass lay-offs. These entreaties are likely to harden into demands in coming days, as society expects some clear reciprocity for its largesse.
Examples of sharp practice and inequality will be inevitable, as some companies will game the system and gain undeservingly. Profit, for years a controversial principle given apparent levels of inequality, may become almost entirely unacceptable in sectors nationalised in all but name.
How should businesses respond? Firstly, it needs to recognise the crucial importance of now joining the national effort. Recent examples include Pret A Manger making hot drinks free to NHS staff and reducing the cost of food by 50%. Domino’s is similarly offering free pizza to care workers and telecoms providers are making health information sites free to access without data charges. LinkedIn is opening up 16 of its learning courses for free for those looking to stay productive, UberEats is waiving commission to independent restaurants, Amazon is showering frantic staff with raises and Disney has released Frozen II early. Whether the latter is to society’s benefit may be debateable but in the areas they can help these businesses are delivering.
What should guide businesses looking to dig for victory? Firstly, the mental health of employees is critical given social distancing and isolation requirements. Companies need to prioritise counselling, support and welfare checks. In this regard, enforced video conferencing for work calls is an interesting policy given that it guarantees face time.
Secondly, financial security. While government considers a universal benefit, some companies are already enforcing unpaid leave or temporary redundancy. Companies in the gig economy might be considered the most vulnerable, so credit to those companies that are creating hardship funds and updating sick pay policies to ensure that staff continue to receive some income.
Lastly, business needs to think about its supply chain and the ecosystem in which it operates. Its responsibilities extend beyond its own employee base to those suppliers which depend on its business.
This might all sound like the radical collectivism espoused by Jeremy Corbyn or Bernie Sanders, and so it is that despite being out of power, their dreams may still be fulfilled.
‘Let us go forward together’ Churchill intoned during World War II. The shared endeavour of beating C-19 might make that an anthem for a generation.