At a time when many companies are having to ‘furlough’ staff – and when some are coming in for considerable criticism in the process – we have seen an example that handles the difficult situation with some sensitivity.
Reapit is an exceptionally well-known supplier to the industry and this week they have had to make the tough call to furlough a number of staff in their UK operation. The company declined to reveal the actual numbers of staff involved in the process.
The letter below was written by Reapit CEO Gary Barker and apparently shared with his staff following a conference call with all Reapit employees yesterday morning. Barker told EYE: “Although we are a tech company, the essence of Reapit is actually the incredibly talented group of people who I call my colleagues – so understandably this has been an exceedingly tough decision for us… ultimately our decisions are made to ensure our core business capability remains stable, so that our furloughed staff has a Reapit to come back to, and that our product remains available to our customers throughout the crisis.”
Although it is clear that that the letter was meant only for internal distribution, our take is that it may help others as they face dealing with a furloughing process. We therefore decided to publish it.
“Only a few weeks ago I was sharing how we as a company were on target to reach, and possibly even exceed, our growth targets, and then came Covid-19. Within an alarmingly short time everything changed, and the world came to a halt. In many ways it has done so for us too. Most of our customers are now operating with skeleton staff, whilst some have closed shop altogether, and we are feeling the impact of those decisions almost immediately.
“Under ‘normal’ circumstances, such a rapid loss of income would have resulted in retrenchments, but these aren’t normal circumstances, which is why the UK government has stepped in to help the business world survive these next three months with the Job Retention Scheme; so that when the tide turns we can fire up our engines and return to a place of ‘business as usual’.
“My priority in the days ahead is to keep the Reapit business and our colleagues we all know and love, afloat, so that we can just pick up the baton again when the race is back on; chasing new business and new goals. Part of this plan is to accept help when help is offered, which is why we, like many companies, will be subscribing to the scheme.
“Of relevance to you is the Coronavirus Job Retention Scheme which Reapit Ltd has decided to access. Without this Government support, the business may have been forced to take some difficult and permanent decisions about our workforce. Instead, we propose to designate you as a furloughed worker under the Scheme, with effect from 1st April 2020.
“During the forthcoming period, your terms of employment will be varied so that you receive only 80% of your gross base salary. I want to assure you that I will be feeling the challenge of a reduced salary along with you, as I have elected to take a 50% pay cut during this time to help our business along.
“It’s a lifesaving offer, and one that will enable us to keep all our staff. Those of us who are not furloughed will work hard providing a valuable service to our customers until the end of the crisis, ensuring that there is a fully functioning Reapit to come back to at the end of it all.
“Your role is extremely important to the organisation in times of growth and expansion, which is why when Reapit returns to full capacity we will need your contribution more than ever to help restore the time and opportunities lost. Let me be very clear in saying your position is not being made redundant, and you will be asked to re-join Reapit as soon as we can manage that again with our own income. Right now we are not sure how long the furlough period will be but are hoping for a period of no longer than 12 weeks.
“I believe this is ‘free’ time that you can put to great use. As you are aware, we are encouraging as many Reapit colleagues as possible to volunteer during this unprecedented time, and I would urge you to participate in activities that will help you get through this difficult period, including self-learning, volunteering, exercise or even a new hobby. I also ask that, whilst you will not be able to do any actual work for Reapit during the Furlough Period, you periodically monitor your emails for the purposes of keeping abreast of any developments in the business.
“If we can offer any advice or assistance, please don’t hesitate to talk to your line manager, HR or myself. We remain available to offer you our full support, and your line manager will continue to keep you updated on a regular basis. I also encourage you to keep checking in with the Workplace app to stay connected to this of us who remain in the business.
“Until we see each other again under more normal circumstances, I wish you the best of health. Look after yourself and those close to you, because you are an extremely valued member of the Reapit family, and I am counting down the days until we begin our new chapter.”
Seems a decent way to handle a very difficult task.
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It is a well crafted and sincere letter and a long way from some of the awful handling of this crisis we have seen from a certain hotel chain. I would comment though on a CEO who takes half of their salary and thinks that’s the same as a staff member dropping 20%. If you are in the driving seat in businesses like this and many others in our sector then a lot of your wealth is in your stock. That may or may not take a hit over coming months but that’s what you’re trying to protect. The company and your personal shares in it when you sell. These executives might earn 10-20 times what an entry level member of staff earns. And 50% of that is still a lot. They’ll also have personal cash reserves and won’t be living hand to mouth. In so many bigger businesses, they are doing the right thing and topping up their staff by the extra 20%. Ok they have more reserves, but they still have to protect their stock the difference being they are not run by a few major shareholders who want to protect their exit at all costs. I would have thought that starting out by topping up your staff as they might be over stretched as it is and then if this becomes longer term, outlining a case for dropping them eventually back to 80% would feel fairer.
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To an industry that gave me a career, a good one, now is the time (as best you can) to support the service suppliers, the people who have supported you and make your businesses tick.
£1500 given to a single service supplier each month would otherwise keep somewhere between 5 and 10 small suppliers in businesses in business. It easily pays 3 or 4 software licences to the CRM suppliers who you all rely on.
My advice is look after the people who give you a web presence, help you win instructions with their market intel and help with your administration.
Paying profit to a portal’s shareholders does nothing for the portal staff it simply makes wealthy people wealthier, people you don’t, know who contribute nothing to keeping your business afloat and supporting you.
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Nice letter and no easy way to handle an unprecedented situation. Personal contact and communication, wherever possible is vital.
Directors and business owners across the country are probably putting their staff ahead of themselves – I did so in the financial crash of 2007/8 and I am doing so now.
For example, I am now taking no income from my NED role at teclet and have cut my income from Integra by 75%. This doesn’t make me a hero it is just trying to do the best for everyone and for the survival of business. I hope that this, coupled with the fortitude of the staff, will help see us through such difficult times,
There does however appear to be some confusion on furloughing in relation to commission paid staff as the rules say that it is 80% of basic salary up to £30,000 as of 28/2/20 including NI and auto enrol pension payments.
This means that a negotiator on say £15000 basic and £15000 commission would only be entitled to 80% of the £15000 figure ie. £12000. Which in reality would be closer to 40% of normal earnings. Of course, the alternative could be permanent job losses.
I am trying to get greater clarity and welcome views?
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The lack of clarity in respect of the Govt’s. “furloughing” scheme is the main problem…there seems to be almost none!
I would be reluctant to impose a scheme upon any team members, that has so little in the way of concrete information attached to it.
We as a business haven’t (as of today) placed any staff members on “furlough”/engaged with the scheme, nor have we laid anyone off or made any team members redundant (we’re monitoring income and expenditure on an almost daily basis). Whilst my core focus has always been the success and continuity of the business…the focus has now changed, in favour of retaining as many staff, on their current structure, as possible.
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Nice to hear that the staff are valued by so many employers.
On the commission – I’m awaiting clarity………hot topic though.
Views include:
Paying commission to staff on deals already agreed – prior to being furloughed – that go on to complete and settle over the coming months should be included in any salary.
What an employee should not expect is; to be paid commission on future earnings based on past performance.
It needs to be tangible
Now, whether the employer can claim back the commission element from the CJRS is another thing all together.
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Amazing letter and care for staff, If only every company was like this.
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ReapIt has long had a high fee, high margin business model. Good for them – margins are everything. And high margins help in times like these, as does the Govt support which is a total gamechanger.
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Although I have been in the property business for nearly 50 years, I consider myself a simple soul and this whole question of ‘Furloughing’ does seem confusing. From HMRC web site this is the employee wording for payment
How your monthly earnings are calculated
If you’ve been employed (or engaged by an employment business in the case of agency workers) for a full year, employers will claim for the higher of either:
the amount you earned in the same month last year
an average of your monthly earnings from the last year
If you’ve been employed for less than a year, employers will claim for an average of your monthly earnings since you started work. The same arrangements apply if your monthly pay varies such as if you are on a zero-hour contract.
If you started work in February 2020, your employer will pro-rata your earnings from that month.
Bonuses, commissions and fees are not included as part of your monthly earnings.
As I said, my simple brain said to work out ” an average of your monthly earnings from last year” you look at last years P60′ s which are now available and it tells you what your member of staff earned last year (which included commissions) and divide by 12 and hey presto you have a figure! – but then the last sentence above would seem to contradict this.
No doubt some clarification will come eventually
even if sanity may be tested – keep well
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Setting aside the absolute necessity for a Speedy Independent Public Review of our Government’s shortcomings (I don’t give a sh£t about the politics of whoever!) ……the reasons why the UK didn’t respond early enough to particular warnings/issues/testing etc etc etc – because lessons MUST be learned from this Pandemic ……quickly, efficiently and a UK Emergency Plan in place to mitigate any level of repeat…… and such a Review doesn’t need months of f@nnying about – the list of what went wrong, how we make it right should already be started on a blackboard if necessary! No sweeping under any Whitehall carpet – an open book, for us all to see/engage/learn/feel secure that if there is a “next time” …..it won’t involve the UK (and the World) initially keeping it’s “fingers crossed!”.
My wife is in the NHS and I witness so many of our NHS frontline being poorly served by those in Government who need to get a grip of this situation and get ahead of it, instead of playing catch-up! Every lab in the country capable of being requisitioned to make/supply testing kits should have been, by the Government …..if we do OUR BIT?! ……the Government must DO ITS BIT! …… and any supplies/materials that are/were needed for this process, why the hell were we not doing that several months ago when the giant letters C O V I D were literally dripping down the side of Planet Earth.
Anyway!!! …….back to the……
The Reapit Letter – I don’t envisage a better worded response for anxious employees ……again, we see some employers with a complete lack of understanding/the implication on the process of “furloughing”. I applaud the letter from Reapit CEO.
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Good venting there GPL. Frightening to think the Lancet picked up on this in wk 3 of January but HMG failed to respond and then got the approach and prep so wrong. Thank the lord for the Imperial College virus strategy.
The good ole USA cocked up even more with the orange man likening it initially to automobile accidents and regular flu. Idiot.
Scary whats happening there and I’ll be most surprised if he doesn’t fall on his sword.
Anyways, appreciate the efforts of all the front line.
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