Dear All
I am writing to you so you can understand my thinking at this difficult and unprecedented time because it falls to me to make crucial decisions over the coming days that will affect the long term survival of the business and everyone who works in it.
Before I go on I want you to know that compared to our competitors we are a relatively financially strong company, which means that if we are careful we stand a much better chance than most of getting through this crisis and out the other side.
However, we don’t have unlimited resources and based on what I am now seeing we might not be able to sail through without some drastic temporary measures being put in place. I would also like to say that during the crisis I will not personally be taking anything out of the business and will if necessary make a substantial sum available from my savings in order to get us through.
That said, like any business or family we need to make ends meet and if our income is going to drop substantially over several months we have to plan to reduce our expenses accordingly.
At the moment we don’t know for sure how badly we will be affected but it’s now obvious new business will be harder and we will take a hit if a significant number of tenants don’t pay their rent.
Our biggest expense by far is our wages bill, it constitutes over 50% of all our expenses and it is the one over which we have the greatest control.
In stark terms I have a choice, I can try and get through this by making a lot of people redundant, something I really don’t want to do, or, I can try and keep as many if not all of you employed by asking you to be prepared to potentially make a personal sacrifice during this difficult time.
Normally we expect to make a profit every month, our rental income means we can predict and forecast how we are doing quite accurately and we have been making great progress this year so far.
I’m happier with my senior management team than at any other time and I can see the quality of all our staff improving all the time. I’m also more confident than I’ve ever been that we as a company are offering a market leading proposition which has become the envy of our competitors.
So, under normal circumstances I would expect this to be a record year for us. However I can now see that it is most likely that over the coming weeks and months our income is likely to decline and put us in an unsustainable loss making situation unless we put a contingency plan in place now
Obviously the best outcome is that we continue to do new business and take advantage of the many opportunities that will arise as landlords and sellers find it harder to get a result from their agent either because of lack of proactivity, or because some agents will throw in the towel, something we are already beginning to see.
There will also be a lot of private landlords in distress who may want our help and we should be on the lookout for them. I can still foresee an optimistic outcome where we get through this in profit, now that would be an achievement and it’s something we must aim for and do everything we can to achieve. However, we also need a plan for what we do if we don’t make a profit and can’t sustain our current cost base.
I want you to know we are exploring all avenues, negotiating discounts and payment holidays with suppliers, looking at government loans and assistance, getting rid of unnecessary expenditure, everything we can to get us through this.
On the last point please try to help by keeping non essential expenses down to a minimum, every little helps. If after looking at all these options we still can’t cover our costs I am proposing that we apply a fair income reduction formula to everyone in the company.
What I mean is that whatever the percentage shortfall is in a month we apply that percentage to everyone’s pay which would be reduced accordingly. So, as an example, if our normal wages bill is £200,000 and we had a shortfall of £10,000 it would mean everyone would be paid 5% less than normal.
If we put in this backstop now we may never need it, I hope we don’t but it will mean I can make firm plans for the future, retain as many of our people as possible, focus on the business and come out of this as strong and fit as possible.
Because of the extraordinary nature of this situation I will be available to any member of staff who wants to speak to me personally to ask questions or tell me about their concerns. All I ask is you speak to your manager first and if you still feel you want to talk to me I’m available.
I’m delighted to say that since writing this message, during today most of you have been told about its contents and that as a company everyone has received it positively.
You will be getting an email on Monday from HR confirming the change will be in place, the earliest it can affect your pay is April. I really believe that by pulling together we can come through this intact, stronger and wiser.
Finally, this is new ground for everyone and I don’t claim to have all the answers, I may well make some mistakes and errors of judgement along the way but I promise you this.
I will do everything in my power to steer us through this crisis and out the other side and I will fully recognise everyone who gives the company and me personally their support and trust along the way
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Transparency is the fundament of trust and Simon delivers it throughout. That's what true leaders do - they don't conduct difficult discussions at arms length.
The assets that matter? Trust - Permission - Remarkability - Leadership - Stories that spread - Humanity (connection, compassion, humility).
Thanks Chris, and it’s an ongoing process, not a one off declaration. I updated the team again this morning and will continue to do so through. We are fortunate to have been using Slack for two years so we have instant interactive communication in place. People feel so much better when they are kept in on things, especially in a crisis
I think you have worded that in such an eloquent manner and should be really proud of yourself. If i worked for you i would be feeling alot more at ease. I think you are completely right that transparency with your staff is key. We have always tried to make sure that all of our staff know exactly how well we are doing (and celebrated those times together) and when times are hard we have really pulled together to get through. I hope that you manage to come through this and thrive on the other side of it, you are clearly a great guy to work for. All the best to your team.
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