Posted: 18 May, 2020
Just three months ago no one had heard of Covid-19 yet in a short period of time it has come to dominate the rhetoric and completely change how we live, work and socialise. Businesses have faced an unprecedented level of disruption and as with any crisis, there have been winners and there have been losers. For every story about a manufacturer adapting their production lines to make hand sanitiser, or accountant now working from home there are thousands more businesses that have been have reached the brink of their viability.
Estimates suggest that nearly a quarter of employees in Britain have been furloughed with claims amounting to £8bn (so far) and many have relied on financial support schemes to prevent cash from drying up.
Now that Boris Johnson has presented his ‘roadmap for reopening society’ businesses must decide how to resume work and rebuild their business. But with ‘business as usual’ still a long way off there are many things to consider and businesses will have to navigate post-lockdown life with all the flexibility, ingenuity and innovation that many have demonstrated since the pandemic began.
The discussions to be had and decisions to be made don’t differ all that much from those that are needed when a company undergoes a restructure as many businesses are likely to need to reassess everything from their staff needs, to supply chains, to service delivery. Some might find that business can resume almost as normal, but others will need to make drastic changes. And while the outcome for each business will differ, there are some key areas that each will need to consider in order to successfully navigate life after lockdown:
Health & Safety
One key area that can’t be ignored is how businesses will implement the social distancing guidelines and ensure the safety of their staff and customers. Every business will need to review their premises and work environment whether it’s an office, warehouse, shop or building site and ensure that the required two-metre distance can be maintained between colleagues, visitors and customers. Businesses may also need to consider introducing access control measures, signage, PPE, and guidance to ensure that procedures are managed and followed. Training staff to operate under the new measures will be necessary and it is advisable to keep records as directors may be held liable for failures to introduce and monitor the new safety regime. There is little doubt that in due course lawyers will have a field day pursuing employers as representatives of those seeking compensation.
Financial Damage and Outlook
Every business should be trying to assess the damage done to them by the pandemic so they can make informed decisions going forward. Business plans, order books, budgets, financial projections and cash flow forecasts should all be reviewed to get a full picture of the impact.
Then once the impact has been reviewed, businesses can project how long it might take them to recover, draft new plans for the future and if necessary, raise finance for their recovery.
With almost a quarter of British workers having been furloughed, many businesses face the decision of when and how to bring them back to work. Most businesses are unlikely to see their income return to pre-lockdown levels immediately so might choose to operate a phased return for staff as they gradually increase their revenue. At some point many businesses will need to take the difficult decision to make redundancies if they cannot support all their employees’ salaries once the furlough provisions end. Fortunately, the decision to initiate redundancies has been put off now that the Chancellor has extended the furlough scheme to October.
What also needs to be considered is ‘how’ employees will return to work. The lockdown has forced many businesses to rapidly adopt technology and processes that allow their employees to work from home and many might consider continuing to allow flexible working going forward. Not only could it benefit staff safety in the immediate future by discouraging commuting, it also promotes employee work/life balance and might result in smaller office premises being needed and therefore reduced rent.
Supply Chains and Contracts
Businesses will also need to consider that while they may be ready to start trading again, their suppliers might not be and so communication is needed with all key suppliers to ensure they can fulfil contracts. Then once back up and running, maintaining regular contact with suppliers will be crucial, particularly in the case of supplies coming from overseas given that some countries might re-introduce lockdown measures if a second wave of outbreaks occur or the overseas suppliers go bust.
Time should also be spent considering how to build resilience into supply chains. No one could deny that this pandemic has exposed the weaknesses in the global supply chain and businesses that are overly reliant on individual suppliers or regions should look for alternatives.
Businesses would also do well to review the terms of their contracts with suppliers and gain a clear understanding of issues like who is responsible for delivery, who bears the exchange rate risk and what would happen in the event of an insolvency. Having understood such terms, the business may decide to re-negotiate or add clauses such as a contractual obligation for the supplier to notify of certain financial distress events and prevent further unexpected disruptions.
Product and Service Suitability
Finally, businesses need to consider if the changes over the last few months have altered their customers’ behaviours and preferences. While companies may assume they can pick up from where they left off, they may need to alter their products, how they deliver their services or change their prices to stimulate demand.
In essence, businesses need to conduct a review of their overall business plan and operations to discover where to focus resources, where money is being wasted, where there are vulnerabilities and where improvements can be made. Such an exercise will ensure the business is as well prepared as it can be to tackle the challenge of restarting in post-lockdown life.
TMA is a global organisation and has a membership with skills to assist in these unprecedented times. If you need assistance, please contact our helpline on 0844 804 0116
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