Spoonity: A case study on the Work-Sharing program

Taking care of your people during these difficult times is a leader’s number one priority. Savvy and resourceful founders have already crunched the numbers with their teams and strategized how to play the long game to keep their companies running. Making the hard decisions early on in order to conserve cash while the market recovers and working to retain as much of your top talent as possible are challenges. We spoke with Max Bailey, CEO of Spoonity and one such nimble, people-first leader, about his experience, his recommendations and the surprises he’s encountered in activating the Work-Sharing program.

Spoonity helps mid-size restaurants and retailers turn customers into brand advocates through a leading-edge, digital loyalty platform. Instead of investing millions of dollars in rewards programs, Spoonity’s clients get results for a fraction of the cost by speeding up lineups, retaining customers and learning from consumer insights. 

Spoonity is a MaRS-supported and MaRS IAF portfolio company.

About the Government of Canada’s Work-Sharing program

This adjustment program is designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the employer’s control. The measure provides income support to employees eligible for employment insurance (EI) benefits who work a temporarily reduced workweek while their employer recovers.

Note: The Work-Sharing program should not include employees who are needed to help generate work and/or employees who are essential to the recovery of the business, such as senior management, executive-level marketing or sales agents, outside sales representatives, technical employees engaged in product development, etc. These individuals should be working full-time to support the company’s recovery plan.

Take time (but not too long) to weigh your options.

It is all happening so fast. Shutting down the office and helping everyone go remote was an obvious choice, but determining how to proceed in a thoughtful manner in the short, medium and long term is a lot harder. Your objective here is to figure out the option with the fewest negative consequences and consider its impact on your employees, community, customers and stakeholders. Weigh your options, but act quickly; people are depending on you to do so. Here is how Bailey acted quickly to assess his options at Spoonity.

“When we started to weigh the options, we first took the time to listen, get engaged and follow closely what our federal and provincial governments were putting together to aid businesses like ours. Then, when the stimulus package was released, we quickly realized that the options were inadequate to help us cover our projected 70 to 80 per cent revenue loss. We talked with everyone we could, including our contacts at BDC [Business Development Canada], EDC [Export Development Canada] and the banks. Though these options seemed like they would help immediately, when we zoomed out, we realized they just deferred our problems. With not many options left to keep the business running at full capacity, we narrowed our strategy down to temporary layoffs. This option had unfavourable restrictions on the time allowed to work while on layoff since our business was still operational. Enter my CFO. He identified the Work-Sharing program as a solution. We ran through the requirements of the program and found it was a match. The combination of reduced work hours and employment insurance (EI) benefits for our employees meant that we could retain our talent and mitigate many negative consequences both for our employees and the business. Most importantly, the program gives us sufficient time to think through our strategy as things unfold in these uncertain times.” 

Be deliberate, timely and transparent in your communication to your team.

Organize your team and have a point person leading and tracking the troops through the Work-Sharing application process. Both the employer and the employees need to agree to the proposed reduced work hours, and both need to submit applications. Clear and early guidance on this will help your team get the aid they need.

“Our bookkeeper stepped up and reviewed, documented and provided clear instructions to our employees on how to complete the process properly. We set up a sheet to track when employees completed their EI applications and had all applicable documents signed through a digital-signature application. Each executive on my team also set up one-on-one meetings with employees to answer questions and help support them through the process.

Make sure you have the right information and prepare for how you will communicate it to your team. Be available to help employees after the announcement and set the same expectations for your executives.”

People are understanding, given the circumstances, but prepare for questions.

Your objective is to be transparent. Have conversations often and early, and consider your strategy for the future. Put yourself in your employees’ shoes and anticipate the worries they may have. How might you have a positive impact on your team members, community, customers and stakeholders? Showing everyone how you can adapt will be the best motivator for your team and can help you band together to create meaningful change. Plan ahead and involve staff in decisions.

“We talked with all of our managers and were transparent early on as the situation developed. Our team was very supportive and understanding, thanks to our early and honest communication. Even when we explicitly disclosed that people would not be making as much money as they were previously, our employees knew and understood that we are all living in the unknown for undetermined time frames.  

However, be prepared to answer lots of fair and sound questions from the smart people you’ve hired. We got ones like: What will this mean for our industry in the long run? What does the future look like for the company, and what does it mean for me? Is this cut and the Work-Sharing program adequate for our medium- and long-term sustainability? Are our benefits covered? If something happened in a few months and I got laid off then, would I be able to get to the maximum amount from EI considering my now-reduced pay? How is the company thinking about prior commitments it made?” 

Expect delays and be patient. Advise your team to use sites during off-peak hours.

With more than 4 million EI applications expected in Canada, we need to be patient. Encourage your team to access the Canada Emergency Response Benefit if they are not receiving income during this transition period. The CERB can provide up to $2,000 per month for up to four months (*note, if you have submitted your EI application already you do not have to apply for this new benefit). Be more active and communicate with organizations that are engaged in conversations with policy leaders and funders regarding what businesses need. Get involved and be the voice for your team.

“The EI website was not built to process and accept the influx of applications currently being submitted. For this reason, we’ve encouraged our people to apply early in the morning or late at night. Each of our three finance team members have been reaching out to CRA [Canada Revenue Agency], and call are being dropped, understandably. Overall, reaching people has been hard, so we all need to just be patient. I am proud to be in a country that has all of these supports available.” 

Have strategic foresight. Remember, you solve problems well — and this is just a big problem.

What are your plans in the coming months? As a leader, you need to think months ahead and plan for multiple scenarios. Ask for help from your mentors and advisers, and engage in dialogue with organizations that are helping businesses through this difficult period. Some places to consider are: MaRS, MaRS IAF, Communitech, Invest Ottawa, EDC and BDC. This is your moment to think creatively about seizing opportunities that others are not — and focus on making a positive impact.

“Provide more information on the medium and long term to your employees. I ask myself, What are opportunities we can seize? What impact do we have on our customers, employees and those in our ‘chain’ — and how are we helping them? The reality is that we are all in this together; it is our opportunity to band together and really show what it means to be human. I am fortunate to have family, friends and connections to individuals who are in China who are able to provide insight on what life on the other side looks like. I’m focused on conducting primary and secondary research into ways that consumer interaction will change after this crisis is over, and reflecting on how the business will adjust.”

Bailey’s final two cents: Founders, take care of your employees.

“Different organizations are in different situations, but at Spoonity, we are fortunate that we are still making money. It pays to consider the Work-Sharing program as an option, but it may not be right for your organization. Keep your team together as much as you can without putting the business at risk. Support your employees’ mental health and plan your strategy thoughtfully, with empathy and intention.” 

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