The impact of COVID-19 has sent shockwaves through the Global business sector, with reductions in turnover and falls in employment. Businesses have had to change their way of work, with sharp lockdowns being a part of the norm with hundreds of thousands of workers being sent home to either work from home or await the restrictions easing.
Since the start of the pandemic the Australian economy has held up reasonably well thanks to record Government support. Despite this business owners have been faced with a mirid of challenges including, constant opening and closing, implementations of QR codes, deep cleaning and capacity limits. Businesses were also challenged with the loss of employees, uncertainty over revenue ranges and for some a deserted CBD.
Business Post Pandemic
As we move out of lockdown a new set of challenges will be faced by Australian businesses. Resulting in a need to rethink the way the business operates on a day-to-day basis and how staff and customers are managed. With the overriding principle being continued uncertainty how to operate safely and deal with potential future outbreaks will likely be the norm for many Australian businesses.
Challenges for businesses to consider include:
Withdrawal of Government Support
Governments across Australia have announced that various Covid relief support measures will start to be withdrawn once vaccination levels reach 70% and 80% and restrictions are eased. Businesses will however still likely be operating under some form of capacity restraints for some time. Further given staff and supply shortages along with Covid safety measures business are likely to face cost pressures. Businesses will accordingly have to rely on their own resources to fund any trading gaps until capacity restraints are lifted and revenue returns.
Staffing
As we move to open up staff shortages will be on the minds of many employers. The ABS recorded that during June 2021, 19% of businesses reported that they did not have enough employees to meet current operations, (examples 29% in the construction industry and 27% in retail sector). Further a recent survey by Microsoft indicated that up to 40% of the global workforce is considering a career change.
Staff shortages are also creating wages pressure in many sectors at a time when businesses may not be able to pass on cost increases to their customers.
Business Operating Models
As we move to the post COVID future a number of the new business models that were learnt during the pandemic may continue. These include staff working from home and flexible working arrangements. These are likely to have an impact on office rental demand and the level of foot traffic within our CBD’s. The level of face to face meetings and corporate travel may also be impacted long term by the move to online meetings and training via Zoom and other platforms.
Supply Constraints
Covid restrictions along with shifts in demand have significantly challenged global supply chains.
Supply chain issues have been caused by disruptions to manufacturers as a result of Covid shutdowns and operating restrictions. As economies have opened following vaccination and demand has increased these issues have been magnified.
Further as demand bounces back strongly for products as opposed to services constraints have been experienced in shipping and parcel delivery.
Business must consider strategies to mitigate risk and eliminate any future supply chain disruptions including potentially sourcing inputs from different or multiple suppliers.
Health and Safety
The health and safety of staff and customers has become paramount during the pandemic.
Employers will need to consider new operating models to ensure social distancing and hygiene standards are maintained. Employers need to effectively communicate and educate their employees and customers about these new operating processes and the preventative and proactive health and safety measures they have implemented.
As Businesses open up assessing staff and customers vaccination status is important to ensure the protection of staff and customers and to comply with government directives. Plans will need to be put in place to deal with employees and customers who are not vaccinated.
Additionally Australian states have different rules around the handling of the virus including border movements, quarantine and rules around vaccination. These rules are fluid and can change rapidly necessitating business to be aware of the current rules.
Preparing your business for an upcoming deal can be a long, challenging and sometimes tedious process. But it’s extremely important to go through that, since it will eliminate concerns and also ensure your business solves any problems that might arise before a deal. It just makes the investing/acquisition/sale process a lot smoother, with the return on investment being second to none!
6 Things AS Advisory Consider Business Should Focus on For a Successful Reopening
- Protect customers and employees by ensuring you have a clean and safe environment and policies and procedures to ensure compliance with density limits, social distancing and vaccination status.
- Review your operations and business model. Review products or services sold and analyse whether they are still relevant in the modern-day market.
- Evaluate changed customer attitudes and behaviour to your industry. Develop emotional intelligence towards your customers changed behaviour.
- Involve all team members in the business reopening plan. Communicate with staff to receive their thoughts on how the business should return to the workplace, which in turn will empower employees.
- Do not ignore your business cash flow, monitor your financial position closely and look into financing options should you require further cash flow.
- Ensure you have reliable suppliers of products needed when returning to work. It is encouraged that you contact your supplier, ensure that no constraints are expected and evaluate products which may not be required anymore.
Covid Ready Quiz
Take our Covid Ready Quiz to see how prepared you are to return to the workplace and receive some tips depending on your stage of preparedness.
