The COVID pandemic has fundamentally changed the way we work and the way businesses do business with each other, their customers and suppliers. It has been astonishing to see how quickly and, in most cases, how successful that transition has been.
Our survey carried out in August 2020 on how businesses have coped with lockdown since March 2020 revealed a sense of resilience, determination and optimism in the face of continued uncertainty. Click here for the survey results.
But just as businesses were beginning the slow return of staff into offices, the government has had once again to reintroduce further restrictions, and in some parts of the country, partial lockdowns.
Businesses need to learn from their experiences over the past six months and prepare for a further and potentially prolonged period of disrupted work patterns.
Our director Gary Wong offers the following advice.
The change to a more agile workplace has been happening for many years, especially in certain sectors such as technology and finance. Many of our colleagues work from home for part of the week, hot-desk and travel between different offices and client or customer premises. But perhaps no-one would have predicted such a radical shift in March 2020 when COVID-19 closed office doors.
Whilst undoubtedly disruptive in those first few months, businesses have largely found that with the right IT infrastructure and with good and regular communication with staff, it is an arrangement that has worked well.
Employees tell us that they welcome the saved commuting time and the ability to work around family commitments. Employers, particularly smaller and more agile businesses, are saving considerable amounts of money by reduced rents and rates, and in some cases giving up a permanent office altogether.
At the time of writing, COVID infection rates are on the increase with the government responding by localised lockdowns and the reintroduction of greater restrictions. The Prime Minister has not ruled out a second national lockdown.
There are new challenges that businesses must consider.
Wellbeing and mental health
Wellbeing and the mental health of staff is a big consideration, with staff feeling isolated from colleagues. Working from home can, if we are not careful, sometimes feel a little like living at work, tied to a computer screen for hours at a time without the natural interruptions that come with office life. Technology has helped although too many hours on Zoom or Teams calls can equally be detrimental.
We are seeing, particularly in the technology sector, companies appointing dedicated HR staff to help businesses make a more permanent transition to working from home and a future where a hybrid approach is likely to be common. In other instances, we are hearing of employers putting aside funds to purchase office equipment for employees to enable them to work from home safely and effectively (it’s happened at Hillier Hopkins).
The physical and mental health of staff will continue to be a key challenge which all businesses must continue to monitor.
Make time for reflection
Businesses, if they have not already done so, should make time for reflection and planning. What lessons can be learnt from the past six months, and what steps can be taken now that will make it easier to continue to do business with the spectre of COVID on the horizon for many months to come.
Many businesses dipped into the “disaster recovery” plan (many for the first time!) and now would be a good time to reflect on what went well and with hindsight, what improvements could be made.
That may include a review of the IT systems a business uses, adoption of more cloud platforms, a review of office leases and rents, and continuing to offer support to staff to work from home. The ability to understand, react and make decisions quickly is vital.
Health check and scenario planning
Planning should also include a detailed financial health check, and the first step would be to scenario plan the impact of COVID on turnover and profitability.
With the help of your accountant, a typical scenario planning exercise will start with the worst-case position – zero income. What would zero income look like and how long can a business survive with zero or little income?
The exercise continues at different income points building a picture of how the business will react and needs to change, taking into account fixed overheads such as rents, and more variable ones, like salaries and taxes.
Scenario planning would also include a review of the government funding that is available to help cash flow alongside support that has already been claimed. It is, of course, important that repayments are factored in.
A more detailed guide to scenario planning can be found here.
Look after your supply chain
We would also recommend that a business review and look after its supply chain, asking the question whether a business is too reliant on one key supplier or customer? If so, what steps can be taken to diversify both?
Environmental factors should also not be overlooked. A new reporting regime is now in place for businesses considered large energy users – businesses that consume more than 40,000 kilowatt-hours of energy a year in the UK. That energy consumption must now be shown in a company’s annual report if your company meets the definition of a large company. Click here for more detailed article.
How we can help
COVID continues to present challenges that businesses will not have faced before and the need for advice and guidance has never been more important.
Hillier Hopkins can help – we offer a free consultation which is completely confidential and where you are under no obligation. Please get in contact with Gary Wong on gary.wong@hhllp.co.uk or 03300243200
