Published 18. Mar. 2020
The Impact of COVID-19 on Businesses
COVID-19 has affected all industries and organizations are seeing the impact it has on their business. In this article, we highlight the major concerns and strategies businesses are taking during these troubling times.
All the major industries of the world are currently dealing with the devastating effects of COVID-19 (or the coronavirus). From manufacturing to marketing, 2020 has seen shifts in the way businesses and organizations operate in the wake of the deadly virus.
Through our Executive Trend Survey, we’ve managed to gain insight into how the top 500 companies are responding to COVID-19 and what executive leaders believe will be the effect of the devastating virus towards their business and how their strategies will change.
The Negative Impacts Are Short Term
It’s undeniable that coronavirus has negatively impacted businesses all over the world and our survey results solidify it as such with an overwhelming 93% of respondents noting that it will negatively impact their business.
However, what stands out from the survey is the number of businesses that believe the negative impact of COVID-19 will be short-term, instead of long-term. Specifically, only 28% of respondents are expecting a long-term negative impact while 65% are expecting a short-term negative impact on their business.
Of course, the negative impact can be wide-ranging and depends on the nature of the business itself, but the most obvious one would be on their revenues.
Revenue Takes A Fall In 2020
Companies and businesses are taking major hits at the beginning of 2020 due to the rapid spread of coronavirus and the results of our survey show that 86% are expecting revenue to take significant falls due to the direct impact of the outbreak.
From that 86%, 33% are predicting a revenue fall of more than 15%, 21% believe their business’ revenue will fall within 10%-15%, while another 33% expects their revenue to fall 10% or less.
The significant drop in revenue will have a trickle-down effect on the economy as companies are struggling to adjust their business strategies in preparation for an economic downturn.
An Economic Downturn Is Coming
From closing down productions/operations to a drop in consumer confidence, COVID-19 continues to impact businesses and the way they operate. However, our executive survey shows that many leaders are predicting that an economic crisis will be the aftermath.
77% of our respondents believe that an economic downturn is an inevitable outcome due to government restrictions and the continued threat of health to consumers, especially in major urban areas.
Countries such as Italy, China, and India are expected to take the greatest personal financial impact as people continue to observe social distancing measures and observe travel bans.
Businesses Will Bounce Back
Despite the current situation, our respondents are bullish in their businesses’ ability to bounce back and have their operations return to normal, once government restrictions have been lifted.
Only 12% of our respondents believe that their operations will take 6 months to over-a-year to return to optimal levels. This is a huge gap to the 88% of surveyed leaders who expect to have their businesses back to operational levels in less than 6 months.
From that 88%, 32% are expected to be operational in less than a month while another 32% expects daily operations to return to normal in 2-3 months. Lastly, 24% hopes to have their organization back to normal in 4-6 months.
Shifting Towards Remote Work
With government restrictions in place and the shutdown of non-essential services, many companies and businesses have shifted towards remote working to ensure that the coronavirus doesn’t spread within their organization and continue operations as usual.
Based on the results of our Executive Trend Survey, 73% of executives that responded have decided to shift their organization into fully-remote working environments to continue business operations. In addition to remote working, 67% have also decided to postpone business events/activities to reduce social contact.
Still, many organizations are unprepared for remote working and are too focused on finding collaboration tools instead of training people on how to work from home and encourage a continued winning momentum.
Long Term Effects of COVID-19
It’s not an understatement to say that the pandemic has significantly impacted the way businesses and organizations operate across various industries. From our survey, it’s evident that many executives are developing new strategies to prepare for a post-coronavirus world.
At least 55% of those surveyed are prepared for an increase in long-term remote work situations in the event of another government movement restriction. In addition to that, 51% of respondents are also focusing on business continuity planning (BCP) and scenario planning to manage potential threats from a 2nd or 3rd wave of coronavirus.
Preparation will be key in a post-coronavirus world and businesses are already taking steps to integrate initiatives, such as better work-from-home capabilities, and measures to reduce the negative impacts of major pandemics.
A Post-Coronavirus World
The results of the Executive Trend Survey paints a bleak picture for businesses in the following months as major industries are bracing for the worst economic downturn in recent years.
However, there is a light at the tunnel as leaders and respondents are optimistic that once the dust settles on COVID-19, businesses and consumers will be quick to return to normal. For the latest COVID-19 business impact findings, read our article ‘The Impact Of COVID-19 On Businesses: 5 Months On‘.