There is no question that the COVID-19 pandemic has been tough on the people within the financial services industry. There has been personal fall out as well as business impact. As an industry we stepped up to support our clients during the March uncertainties, learnt about JobKeeper and other government support initiatives in April, rolled it all out in May and brought it home in June. Often with a total disregard and neglect to our own well being and business health. But that’s what we do – look after our clients with their best interests in mind as we watch out for their business welfare.
Industry support through social media channels was and continues to be full of shares around time spent and revenue lost as bookkeepers and accountants struggled to come to terms with just how to be both supportive and commercial – after all, some client businesses shut their doors overnight, so how could we ethically charge a broken business for the support provided?
As a whole, we absorbed significant costs over many weeks often to the detriment of our own business as we turned the clock off but continued to pay wages. Some practices experienced substantial revenue decline as a result and with the exacerbation to mental health, some questioned themselves about whether to continue in business. A trying time indeed.
Then came the pivot. With the announcement of JobKeeper came the realisation of an even more significant impact to firm workload, coupled with the insight that this is going to be tough for businesses to grasp and implement, but absolutely financially beneficial to them should they qualify. The difference between potential business shutdown or a lifeline to continue.
Internally, we made the decision to continue our proactive engagement with clients around COVID-19 information but when it came to JobKeeper support, this was to be a fee for service arrangement. This decision was determined from a commercial consideration for both parties but more importantly, we wanted to flag our worth and value.
With JobKeeper enrolments open from Monday April 20 we rolled up our sleeves on the Friday prior to systematically work up a plan to introduce our clients to ‘The Direct Management JobKeeper Implementation Plan’. This plan in essence demonstrated our commitment to our clients to ensure they were fully supported for JobKeeper, freeing them up to focus on their business. We highlighted that while we had been more than happy to absorb the support provided, JobKeeper was a task that was outside the scope of services provided.
We then divided our client base into three sectors –
- Those we complete regular payroll activities for
- Those who complete their own payroll
- Those who are Sole Traders or other entities as defined
For each, we worked out a specific scope and a fee based on the value provided. Each client received an email tailored around their specific sector, which outlined the service offering, investment, and next steps to proceed.
For each sector we had the following uptake –
- 45% of clients in sector 1 were eligible for JobKeeper
- 68% of clients in sector 2 who were eligible for JobKeeper engaged our services
- 38% of clients in sector 3 who were eligible for JobKeeper engaged our services
A significant 67% of our eligible business clients took up our offer to allow Direct Management to address the onerous requirements of the JobKeeper stimulus package.
What do we consider to be the critical success factors to this high uptake?
- Sharp and immediate email communication at onset of COVID-19 pandemic
- Continued email communication on updates in easy to understand format
- Speedy proactive phone contact to each client by the supporting bookkeeper
- We conveyed knowledge, confidence, rationality, and calm
- Immediacy of responses to queries
In summary – we continued building on existing good relationships. These strengthened by the confidence that Direct Management will get this right, as evidenced by the support through COVID-19 given up to that point.
Confidence in this case is based largely on value. Value represented by the ability for Direct Management to facilitate client access to the incentives made available in a way that took the sting out of the process. The consequent value to the client was the assurance that this investment in their business is a means to a) help keep the business viable or b) provide a much needed cash injection to keep their people employed.
For this to be a successful outcome, there also has to be a win for Direct Management. This was very clearly demonstrated with the following results
- A significant revenue lift that more than compensated for prior lost earnings.
- No experience of revenue decline as defined by JobKeeper, but an increase
- A lift in team morale as recognition of prior hard work became obvious
- Stronger client relationships
- Stronger team relationship as we all pulled together to make this happen
The approach taken by Direct Management to navigate this situation had two objectives: Driving our client’s business forward in the short term while also preparing team Direct Management for a more results oriented working model given the isolation we had to go through. This change to working style prepares the business well for growth opportunities beyond the pandemic.
As I write this, we are still in the grip of the pandemic. It will be some time before all restrictions are lifted and the reality is that some restrictions may never lift. The way we are now working will become the new normal for our team. Bring it on!