The 2020 health and economic crisis

We are at the beginning of a once in a life-time event. We are at the beginning of a global economic catastrophe. Nobody knows how long this challenge will last. Over the coming months, this web page will be regularly updated with information relevant to you. This web page will keep each employee real time informed as to how Healy Consultants Group is navigating this economic assault.

  • Company goals

    To continue to serve our multi-national Clients with speed and efficiency; To minimise monthly cash deficits and maximize cash reserves; To avoid / minimise staff redundancies; To stay calm and maintain open transparent communication i) with multi-national Clients’ and ii) with our Suppliers and iii) amongst Staff; To significantly improve our country web pages; We hope and pray for the best, and prepare for the worst.

  • How did the global crisis affect our company from March to May 2020?

    In March 2020, Healy Consultants Group’s cash loss was S$19,000; Consequently, the Management team requested each Staff member to bear a salary cut of 20% for April, May and June. Taken under the expectation the cash flow would significantly worsen, the aim of this measure was to bring monthly cost savings of approximately S$40,000 per month; In April 2020, the cash flow was fortunately and unexpectedly positive, by SG$99,765; On 15 May 2020, the cash flow remained positive, even after deducting an estimate of end of month salaries; giving confidence to the Management Team the end of month cash flow would remain positive for the second consecutive month; Consequently, the Management Team unanimously agreed that all staff will receive their full salary for the month of May; On 20th May, the Management Team additionally agreed to refund all staff members for the April salary cut of 20%. This refund will take place before the 30th of May 2020; The Management Team decision re June salaries will be announced by early June, after Sharon releases the May cash flow results. Before 11 June, The Management Team will have some visibility as to how that month’s cash flow is.

  • How will this global crisis affect our company for the remainder of 2020?

    Because of the severity of the global economic catastrophe, The Management Team cannot predict how June, July and the remainder of 2020 will evolve. Global scientists and economists expect each month to be worse than the last; Aidan expects the global economic situation to continue to deteriorate, which will inevitably negatively impact our cash flow. We must be ready for this risk, and timely adopt simple, practical strategies to mitigate it. The best strategy is to build up cash reserves; For the rest of the year, Aidan Healy predicts the global economy will get worse each month. Unfortunately, Aidan also believes we will be in a global lockdown for most of this year. Before year end, Aidan also predicts global unemployment of 30%. Consequently, it is wise Healy Consultants Group accumulates healthy cash reserves for the harsh times ahead – so as to minimize / eliminate the risk of staff retrenchments; Our cash reserves will decrease if i) quality Client enquiries start to fall and ii) Client engagements are put on hold or Clients cancel engagements and request for refunds and iii) Clients take longer to settle our fees and iv) more Clients request to pay by instalments and v) many multi-national Clients do not pay their renewal invoices; Because Healy Consultants Group monthly costs average S$350,000 to S$400,000, each month we need to collect sufficient fees to cover monthly costs of S$400,000 and, whenever possible, increase our cash flow reserves even more; As always, we will succeed if we work hard together as a team.

  • How could this global crisis affect you after May 2020?

    Depending on how business goes over the coming months, the Management Team may need to ask you to agree again to a salary cut or implement other cost cutting measures; The goal of any cost cutting measures is to build up cash reserves now to minimize the risk of staff retrenchments later in 2020. While we understand the uncertainty and inconvenience of the same, we also ask you to remain open to it, so all of our staff can remain employed and have a source of income, in these times of economic uncertainty; Any salary cuts will be implemented in consultation with the governments of, and in accordance with, the labour laws in Singapore, Malaysia and UAE; In line with our code of conduct and TAFEP guidelines on fair recruitment and employment practices, Healy Consultants Group will also continue to treat all its staff equally. All our staff are working hard and contributing to our business, regardless of their nationality, PR status or office location; Precisely because we value and respect the diversity of our staff, we will not use PR status or nationality or office location to differentiate pay cut levels or other cost cutting measures. We are all part of the same team, both in good times and in bad times; We encourage open communication between staff, line managers, CEOs and the business owner to discuss ways to effectively manage the effects of the crisis.

  • Cost-cutting criteria

    • Criteria used for cost cutting measures

      The Management Team expects to use the following cash flow criteria to determine the extent of cost cutting measures in June 2020; After June 2020, the information included in this table may however change depending on i) additional criteria the Management Team wants to use in order to fine-tune cost cutting measures (in particular quarterly profit and loss) ii) the global business environment iii) labour regulation changes and iv) so on. Modifications (if any) will be notified to you; As a reminder, the monthly savings realized through a 20% salary cut across all offices are estimated to be SG$40,000. The exact amount will vary according to i) resignations and new joiners (if any) ii) annual leave iii) government support received on salaries.

      Monthly cash flow in MayCost cutting measures taken by HC in June
      Salary cuts?Mandatory unpaid leave?Shorter work week?Temporary layoffs?Retrenchments
      PositiveNoOn a voluntary basisOn a voluntary basisNoNo
      Negative by:
      SG$50,000 or less0% or 10%On a voluntary basisOn a voluntary basisNoNo
      SG$50,000 to -SG$100,000Yes, 20%On a voluntary basisOn a voluntary basisNoNo
      SG$100,000 to SG$150,000Yes, higher than 20%YesYesYesNo
      More than SG$200,000Yes, higher than 20%YesYesYesYes
    • How will Management Team decisions be announced?

      Before the 11th day of the month, the Management Team or HR will announce to all staff if the Company is forced to either i) extend the duration or ii) the percentage of salary cuts, beyond what has been already agreed; In accordance with labour regulations, each employee will then be requested to agree in writing to the Management Team request, by signing an addendum. Each employee has the legal right to decline; While the Management Team will respect the decision of each staff member, it is important that staff are aware that the Company may then be forced to use alternative legal solutions to reduce salary costs, including i) asking some staff to agree to take unpaid leave ii) mandatory temporary layoffs and / or iii) mandatory staff retrenchments; All measures will be taken in strict compliance with local labour laws and staff are welcomed to contact HR and CEOs regarding them.

    • How will cash flow be calculated?

      By the end of each month, Sharon prepares a document re bank balances of Healy Consultants Group’s accounts; Monthly cash flow is determined by comparing the numbers reached by the end of the current month with those of the previous month; To calculate correct and accurate cash flow, Sharon will i) include all corporate income and expenses of Healy Consultants Group; For accuracy and quality control purposes, the document and bank balances will be reviewed by Simon, before they go to Aidan and other CEOs; Because we are aware that it is critical that the Management Team takes decisions based on correct, accurate and complete information available, Sharon will also prepare a monthly profit and loss statement, as early as feasible for her each month. To ensure we gather enough healthy cash reserves, the Management Team feels it is fair to offset monthly cash flow figures against figures for the 3 coming months (April, May and June). The first month used for this calculation will be March 2020; At the end of each trimester, we will evaluate results and confirm if we continue to implement this calculation method; By early July, the Management Team will let all staff know if i) this calculation ends on 30 June or ii) will continue in July, August and September 2020; See below for practical examples of how this calculation of cumulated P&L will be made;

      • Example 1 – calculation of April’s cumulated cash flow:
        • Healy Consultants Group had a loss of SG$19,000 in March;
        • Assuming the bank balance on 30th April is positive by SG$30,000, then Healy Consultants Group cumulated cash flow in April is positive, by SG$11,000 (-SG$19,000 + SG$30,000 = SG$11,000);
        • The profit of SG$11,000 is also carried forward to the following month (May).
      • Example 2 - calculation of April’s cumulated cash flow:
        • Healy Consultants Group had a loss of SG$19,000 in March;
        • Assuming the bank balance on 30th April is again negative by SG$19,000, then there is a cumulative loss of SG$38,000 in April;
        • The loss of SG$38,000 is then carried forward to the following month (May);
  • How you can help?

    Every Staff member to help our Firm meet the company goals outlined at the top of this web page; Each one of us to continue to timely serve our multinational Clients with integrity and efficiency; Every employee to help collect fees from multi-national Clients! Each fee received from a Client will pay for an employee salary! Each Staff member to revert with ideas as to how the Firm can reduce costs; Because this is a particularly difficult time for the Management Team, we recommend staff raise problems with solutions; Each staff member to be grateful for what we have, rather than be overly concerned with what you don’t have. To help you appreciate what you have, be aware of the carnage that is unfolding around the world; While other companies go bankrupt and close during this global crisis, Healy Consultants Group will succeed because of hard work and creativity. To help Healy Consultants Group weather this storm, our staff to share specific ideas with the Management Team. Examples of ideas already shared include i) new products and services that our Firm can promote on the business website and ii) negotiating discounts with suppliers, rescheduling payments by instalment and iii) finding Government assistance (e g tax relief, wage subsidy schemes etc) and iv) asking IRAS to defer company tax payments until Q4 this year and v) to publish on our homepage that all our engagement fees are reduced by 10% in April and May.

  • Staff knowledge of global crisis

    To date, global stock markets have fallen 30% since January. This means many trillions of US$ are removed from global circulation. This means global spending will dry up and companies and banks will go bankrupt and employees will lose their jobs in every town and city on the planet; It could take the US/Europe economies three years to recover from the impact; The virus outbreak will have a big negative impact on Asian economies; Informal economies like those in Africa are likely to be particularly badly hit; Global unemployment is soaring. In April 2020, the US unemployment rate was 14.7% with 36.5 million Americans filing unemployment claims; In April, Hong Kong’s jobless rate rose for the seventh straight month and is now the highest since 2009; The global economy is set for prolonged recession in 2020 and beyond.

  • Singapore office

    Singapore’s economy shrank 2.2% in Q1 2020 and is set for its worst recession on record; The Singapore team continues to explore government financial assistance and grants. For example, this economic stimulus plan was launched in March and we expect further stimulus measures in the next budget; The Singapore team understands there is a need to reduce staff expenditures and is committed to help; Our firm continues to seek guidance from the Ministry of Manpower, and heed its Coronavirus advisories; Our Singapore CEO Simon continues to engage with the MoM seeking guidance on staff matters. In April he outcome of discussions was:

    1. The Company is legally allowed to reduce salaries but consent of the employees must be secured first in writing. Otherwise, alternative solutions include staff retrenchment and temporary layoffs, which do not require staff consent;
    2. Regardless of the solution chosen, MOM must be notified of all cost cutting measures impacting at least 10 staff or EP holders.

    • Singapore Job Support scheme considerations

      On 06 April, the Singapore Government announced that it will reimburse to all Employers 75% of the salaries paid in April to all Singapore citizens and PR employees. The salary amount covered is capped at SG$4,600 per eligible employee; The above Government program is aiming at helping Singapore employers to continue to employ their staff in April, minimizing the risk that the shutdown results in staff retrenchment or temporary layoffs this month; All going well, our HR Department expects the amount of cash pay-out received in April was around S$56,000. The exact amount will be recalculated by Singapore Government to take into account exact salaries paid in April and the difference (if any) will be offset against future JSS payments in May, July and October; Our Company will use these Government funds to build cash reserves to continue to pay staff salaries in good and bad times. For example, in May 2020, Simon and Sharon contacted MOM and IRAS to determine how the firm could reasonably and fairly allocate funds received from the JSS scheme; The Government advised that employers are free to use the funds as per their preferences, provided the funds serve the purpose of supporting continued employment of their staff, in particular those for whom it is not feasible to work remotely during the circuit breaker period. Immediately thereafter, the Management Team decided to provide a 20% salary refund to staff to compensate for April deduction, in addition to the decision to pay full salaries for the month of May; Healy Consultants Group is very grateful to the Singapore Government for this funding. Each month, The Human Resource Department has and will send an email of gratitude to the Singapore Government.

    • Work from home considerations

      From Tuesday 07 April, all the Singapore office Staff will work from home, at least until the end of June. The Management Team expects the Government to only allow re-opening of the office in July; In accordance with the Government requirements, we will however design a “return to office” strategy including i) reviewing our safe distancing guidelines ii) appointing a member of staff as a “Safe Management Officeriii) plants to purify the air and more air con maintenance iv) keeping records of temperature checks v) using the safe entry data app for all employees and visitors to the office vi) stepping up office cleaning and vii) other measures listed in this page; We aim to have above documentation ready by or before 15 June, which we will send for MOM for review; This way, we will be ready to return to the office immediately after the Government allows us to do so.

  • Dubai office

    The Office handles Middle East, Africa, Europe and Latin America markets, all of which are hit hard by the outbreak; In April, the Dubai team spoke with a UAE employment lawyer at Pinset Masons LLP; In April and May, the Dubai team also communicated with the Government as to what financial assistance and grants are available. Unfortunately, there are no significant grants or financial assistance available to Healy Consultants Group DMCC; The Dubai team understands there is a need to reduce staff expenditures and is committed to help; In April, all our Dubai staff worked from home for 2 weeks. Thereafter 30% of workforce attends to office every day, in accordance with Dubai COVID-19 regulations.

  • Malaysia office

    Office deals mainly with Accounting & Tax services and is reporting slowing of renewal payments; Since March, The Malaysia team has been working from home; Malaysia team understands there is a need to reduce staff expenditures and is committed to help; The Malaysia team is communicating with the Department of Labour, the Ministry of Human Resources for guidance on staff matters at this time; The Malaysia team is communicating with the Malaysian government to explore any support schemes.

  • Other considerations

    The contents of this web page are confidential and for staff viewing only. This web page shall not be shared with people outside of the Firm; During the rush of the business day, it is possible that The Management Team inadvertently made numerical errors or typing errors or omitted some information. In the unfortunate event you identify errors, please revert to us. I apologize in advance if I or my staff made errors on this important web page; As always, we are committed to safeguarding the health and wellbeing of staff by i) providing a clean and hygienic work environment ii) offering the option to work from home.

  • Conclusion

    To ensure company decisions are fair and reasonable and balanced, The Management Team regularly communicate with each other and with our staff members to ensure the optimum strategies are rolled out by Healy Consultants Group; We welcome staff ideas to make this web page more useful and helpful.