One Australian company severely impacted by the coronavirus downturn has revealed a clever way to avoid sacking employees to cut costs.
The coronavirus restrictions in Australia have devastated the real estate and advertising industries in the past two months.
So online real estate listings firm Domain has suffered greatly, taking an unprecedented hit to its revenue.
But management knew it would be that much harder to recover on the other side if it stood down employees.
Domain had to work out a way to reduce staffing costs while waiting for the economy to recover. And the company last week revealed how it did it.
In a program dubbed ‘Project Zipline’, employees were given an option of having 20 per cent of their salary paid as rights to shares in the company. This way, Domain could reduce its wage bill while still retaining staff.
More than 90 per cent of employees took up the stock offer.
“We had the option of taking the standard path of reducing hours, stand downs and redundancies,” said Domain chief executive Jason Pellegrino.
“Instead, by taking a ‘people first’ approach, Project Zipline allows us to deliver immediate cost benefits, while preserving jobs for the long term.”
The program will be on for six months from May, meaning in November staff will receive their remuneration in the form of shares bought on the market or newly issued stocks.
Domain senior product writer Julia Carter said that it’s “an incredible time” to work for the company.
“Despite the terrible circumstances surrounding COVID-19, I know most of us at Domain will look back on this time and remember how we all opted in to be there for one another and to back Domain.”
Pellegrino thanked his staff for the high uptake of the share rights offer.
“It speaks of the unique culture at Domain and shows how much everyone cares about each other, our customers and the business,” he said.
UTS senior lecturer in human resource management Robyn Johns said that it was prudent for companies to try to hold onto staff, as the current downturn would likely be temporary.
“There is every likelihood that in the not too distant future things will pick up,” she told The Conversation.
“The firms that have done all they can to retain their industry knowledge and company experience will be the best placed for revival.”
Source: (https://au.finance.yahoo.com/news)
