Why is it better to deal with crises and shut down businesses than to fire workers, and to fire workers better than cut wages?

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The following article comes from the joint efforts of humans and God.

Author of the Brave of the Human Spirit

After the outbreak of the top ten authors of Tiger Flavor 2019 and the most popular columnist of 36 Stars 2019, most companies will face three major difficulties. Author: man and God to work together Source: work ID card together with God: Is Tong Yibao's salary normal in 013? This year's New Year's Day is the end of January, earlier than in previous years. After mid-January, most companies ceased business. Only receiving money is busier. In the last days of the year, one of the boss's important tasks is to give the accounts enough money to pay their February wages before the banks stop paying. It can only bring profit when the money is flowing, so the boss will not let too much money remain in the account. Guarantee at least two months of wages, a small amount of payment and other expenses, which is the bottom line of working capital security. However, for ordinary employees, no matter what day is the Spring Festival, they should get a monthly salary, which is a natural thing. Therefore, no matter how much the business is affected, most companies have no problem with February salary. But a March payday could put many companies in trouble. Except for a few companies with tight capital chains, most companies still have some money to pay their salaries, but some of this money is used to prepare stocks, which is not enough for upstream work and has not been spent. To make matters worse, downstream demand does not know when it will recover, so the purchase price does not know when it will arrive. If wages are paid in full in March, by mid-March, the rate of return to work for the entire industry chain upstream and downstream of the company will not return to more than 80%, and there will be no wages in April. As a result, many companies have begun discussions with their employees about pay cuts or deferred pay for three months. Ordinary employees do not have any financial knowledge or the difference between sales revenue and cash flow, which may be completely incomprehensible. Didn't this company make hundreds of millions of dollars last year? Year-end bonuses are big red envelopes one by one. Why is it only one month old? It's like bankruptcy. Can't even pay? Is it because the boss is crying poorly and helped us? Usually, as long as we divide the land into three, everything will be fine, we will get promotion and raise. However, at this critical time, we still need to know what this epidemic means for an average company. What difficulties are waiting for us in the future? Even if the epidemic ends at the most optimistic time, bosses of SMEs will still face three major problems in the first half of 2020 or even throughout the year. If these three obstacles cannot be overcome, good companies will suddenly die. The first problem is that wages cannot be paid. Among the various operating expenses of the enterprise, wages are the most rigid, and the payment of the supplier's goods can be delayed. However, without pay (which means other companies are fine under normal circumstances), people's hearts will be scattered and business cannot be done. Therefore, companies generally do not lack money and do not default on wages. However, this time the situation is special, the general environment is like this, many companies The industry does not have real money on their account, but dares not to pay, because greater difficulties lie ahead. The second problem that the boss may face is the possible downstream bad debt risk and upstream supply risk. Although the state has issued a series of policies to reduce the burden, some companies must not survive the epidemic. These companies were severely damaged in deleveraging or trade wars from 2018 to 2019, and have been struggling to support themselves with financing. The epidemic directly cut off the last hope. The problem is that these companies, which should have closed down in the next one or two years, will suddenly die due to the epidemic within three months, leading to a chain debt crisis. Due to the closure of downstream companies, upstream companies will break their capital chains, and due to the closure of upstream companies, downstream companies will suffer supply chain crises. More importantly, the Spring Festival is the peak season for consumption. In the past few years, the flow of funds was as follows: One year ago, corporate funds were transferred to residents on a large scale, and during the Spring Festival, residents converted funds into corporate deposits on a large scale through consumption. However, due to the epidemic, a large amount of money is still in the hands of residents (by the way, there is a bull market in the stock market

Expectations for income growth are getting worse and worse, leading to a decline in consumer demand. In the circle of friends, there is an internal source of Ali e-commerce company of unknown origin. It is said that during the epidemic, middle-class consumption in the 30-40 age group was greatly affected, with typical middle-class consumption such as high-end cosmetics and European travel bookings falling like cliffs. I don't know if this is true, so I won't post it, but it's logically very reasonable. The relationship between discretionary consumption and income expectations is greater than absolute income itself. If your income is good, you will spend with a credit card, even if you don't have cash. On the other hand, income expectations are getting worse, even if you have a lot of cash in hand. Do not dare to spend. The culprit for low income expectations is a reduction in salaries. Large-scale salary cuts and extensions have the greatest impact on middle and senior management personnel, who have a better understanding of the company's operations and a stronger sense of crisis. They are also the largest recipients of mortgages, thus reducing their desire to spend. In the coming months, they will continue to affect spending on optional consumer goods such as cars, mobile phones, home appliances, high-end cosmetics, travel, dining and entertainment. In order to prevent future risks and reduce wages, the result is a decline in consumer demand, which does bring risks. This is a vicious circle of economic depression in the past. "Enterprises expect poor income-and reduced consumption-and their efficiency is even worse". This is a five-fold fast forward. These three issues are bound to be very difficult in 2020. Of course, this country cannot stand idly by. After all, stimulating the economy is an ancient task. This is better than epidemic prevention. What countermeasures will this country have? 03 bankruptcy? Layoffs? Pay reduction? Let us not talk about national policy. In fact, from a purely economic point of view, I think that it is better to let a company fail than to lay off employees, and it is better to let a company lay off employees than to reduce pay. The best policy is to bankrupt a group of closed small businesses, and the state will step up unemployment benefits. This is the fastest way to heal a wound. From a consumption perspective, the negative impact of short-term unemployment on consumption is almost equivalent to a pay cut. They all lack confidence in the future, reducing their optional consumer budgets. Although the economy will be affected in the short term, production capacity will be quickly cleared so that business can be transferred to surviving companies as soon as possible. If these companies are allowed to expand and recruit staff as quickly as possible, consumption will increase as quickly as possible. This is called "space of time". Of course, no wise government will accept this "shock therapy." Unemployment caused by this "shock therapy" could put the government in a crisis of trust. Therefore, it is China's policy to let ordinary companies lay off workers. Similarly, the state should strengthen unemployment benefits. In fact, the reason is the same, layoffs will inevitably lead to production capacity The reduction in supply, that is, the reduction in supply, is equivalent to the effect of "bankruptcy". From a business perspective, firing workers is also better than lowering wages. Layoffs are the optimization of the personnel structure, the survival of the fittest, and the rebirth of the enterprise. On the other hand, pay cuts seem to be shared by both. In fact, it is easy to hurt capable employees and cause the after-effects of future brain drain. There is also an ethical issue with pay cuts. Today, in the face of natural disasters, companies tell their employees that we need to reduce the salaries of all employees and work through the difficulties together. When we think of this, we don't have to fucking say. However, this was originally a simple labor relationship. You are great today. How will you tell others the rules tomorrow? However, when I close the layoff, I talk about it. Regardless of the country or the company, they are now accepting the next time-a pay cut in the pound, which will allow the company to survive for some time. No one will die, which means no one will live long. This is "time for space", slowly grinding to see who can do different things for a long time. In fact, in the end, this damn company is still dead. Those employees who should be laid off or fired will slowly recover

Therefore, it can be expected that China will soon launch a large-scale economic stimulus policy, just like the "4 trillion" announced by the government in 2009 to deal with the financial crisis. This is another reason why the aforementioned abominable companies will not die out for the time being. However, the sequelae are also obvious. After the "4 trillion yuan" replay from 2010 to 2013, water cannot enter the real economy. First, house prices soared, and then the prices of various commodities soared-the pound. Do you remember "Garlic is hard" and "Ginger is your army"? After eliminating the noise on the financial surface, we see "the country progresses and the people recede." In the past ten years, a large number of small businesses have gradually disappeared. Big businesses dance like elephants. The industrial concentration of the Chinese economy has risen slowly and steadily. 04Thinking about solving problems In my article "Early Ten Years, Avoiding Entrepreneurship, Especially Borrowing Money for Entrepreneurship", I analyzed the different trends of large companies and small companies in different economic periods: When the industry is dominated by incremental competition, some small market segments continue to appear, which is difficult for leading companies to consider. After leveraging market segments to gain a solid foothold, start-ups tend to grow faster than leading companies with various low-cost management advantages. However, during the economic downturn, all walks of life have entered the era of stock competition, and scale advantages have already appeared. Once the Black Swan incident occurs, the problem of insufficient anti-risk capabilities of SMEs will be exposed. The concentration of traditional manufacturing and emerging industries has increased, and the growth rate of leading companies has also been high. Therefore, in this article, I put forward a point that the 20-year-old wave of big entrepreneurial ventures will move towards a murky era. The future belongs to large companies, and China has entered an era that is not suitable for entrepreneurship. The writing of this article in early 2018 is arguably the last good time for the Chinese economy. Supply-side reforms have achieved great success, and deleveraging and a trade war have not yet begun. At the time, I predicted that basically only three types of startups could survive in the future: The first is a micro-individual enterprise between a startup and a freelancer. There are no formal employees, only part-time employees and temporary partners. There is no fixed office space, no tax declaration is required, and the operating costs are reduced to a minimum. Second, a small number of SMEs have cost and price advantages. Third, few companies have been acquired by large companies after rapid growth. Of course, this does not mean that the best way out is to become an employee of a large company and a civil servant of a government agency. You can also have different choices in your life. In my article Anti-Vulnerability: Why Are Some People More Adapted To The Rapid Changes In Work? ", I borrowed the core idea of" Anti-Vulnerability "and put forward" how to use "anti-fragile structure" to solve the "35-year crisis". The core is: Don't simply prevent risks, but build an "anti-fragility "Barbell strategy" of career structure. When risk comes, use it and benefit from it. In terms of career development, it is to abandon a single secondary occupation and keep yourself "most conservative occupation" and "most radical" "Professional" two options, the total return is positive. I believe that after experiencing this risk, everyone will have a deeper understanding of this article. In the end, it seems to be off topic, but I must say something positive to end it And that's it. Recent hot article: Deep dry goods: How can high-class people think of higher social classes? This epidemic will have a profound impact on China's economy and wealth distribution. After the outbreak, my boss asked me Do "Derivatives": In the next 10 years, you may not belong to any company, and "see" it is our greatest support.