Adapt or die – finding agility in your business

In a few short months, the world as we know it has changed, and businesses must now find a way to operate in this “new normal” while remaining profitable. The question is how to find (or create) agility within an existing organisation? Our experts share some answers that may surprise you.

Agility belongs to everyone

In business, agility refers to the potential to react fast to external changes in a cost-effective and productive way. As such, it is a decisive factor in which organisations survive significant changes, such as the current crisis.

In the past, the word agile may have been associated only with high-tech start-ups – but today schools, courts, manufacturers and restaurants are all proving their agility as they fight to survive.

The agile organisation

An agile organisation is built on a stable structure. When change is required, this strong foundation provides the capacity to adapt and respond quickly to the threat or opportunity.

Consider whether your current business structure is still appropriate to the company’s needs. Do the commercial contracts form a good basis for building relationships today? Do the general terms and conditions match the present capacity of the company?

Next, consider the financial situation. How much longer can the company keep paying its operating costs? From stricter debt collections to necessary selective payment of creditors, many potential solutions could enable the business to keep running. Even if this is insufficient, a reorganisation, restructuring of obligations, restart, (re-)financing or offering a creditors’ agreement could still help to avert bankruptcy.

If you’d like advice on the possibilities for your organisation, our company and insolvency law experts can help you work it out.

The agile workforce

Just as the agile organisation is able to respond to sudden changes, so too is its workforce. This requires having a sufficient, but not superfluous, number of staff. Given the high labour costs and strong employee rights in the Netherlands, this is a key area to optimise. Start reorganising in time; make your organisation as lean and mean as you can. Minimise your permanent workforce and maximise your flexible pool.

Re-evaluate your employment contracts and conditions. These agreements are key in determining your rights as an employer, and which actions you can undertake in your company. For example, do your contracts include a unilateral changes clause? Such a clause may allow you to change working conditions, such as location or working hours, if needed. Could you temporarily suspend travel allowances or lease cars while employees work from home?

If you are considering redundancy, calculate the costs that will be incurred for transitional compensation, severance and/or settlement agreements in advance. Remember that for companies facing an acute decline in sales due to the corona crisis, the Dutch government will pay up to 90% of staff wages through the Temporary Emergency Bridging Measure for Sustained Employment (NOW) for up to six months.

Don’t forget to check your options regarding pensions. The pension agreement may provide an option to temporarily reduce or terminate the employer’s contribution, or to cut back or change the entire pension scheme. Note that the NOW scheme offers an extra subsidy of 30% on top of wages through which employer costs relating to pensions (among others) are reimbursed by the government.

Our team of experts in employment and pension law are accustomed to helping companies to optimise and reorganise their workforce. They have the knowledge and experience to assist and guide you throughout this process.

Questions? Further information?

If you would like to know more about one of the topics raised here, please contact us. We will be glad to assist you.

This article was originally published on IamExpat