It is significant for a business and the management to take up necessary measures in order to keep themselves safe from the potential crisis they might face due to the Covid-19 pandemic. Many businesses have shut down since the first wave of Covid-19. Almost every industry has taken a hit, thus, a decrease in revenue can be expected for a lot of businesses. On top of that, there have been structural changes like remote work that has altered how offices traditionally worked. Knowing about the various financial measures for businesses post Covid-19 pandemic is essential for staying afloat.
Problems Faced by Businesses During Covid-19 Pandemic
Businesses have faced several problems running their operations during the Covid-19 pandemic. We have mentioned a few of them below:
- Gathering new customers
- Retaining old customers due to lowering salary and layoffs
- Lack of funds to grow the business
- Policies, laws and regulations by governments that abstain businesses from running their operations to their full potential
- Lack of employee interaction and engagement
- Lack of confidence in entrepreneurs (owners of businesses)
- High uncertainty in incoming cash flow into the business
Some financial measures that businesses have taken are:
Hiring Freelancers or Employees on a Contract Basis
A company loses a lot of money paying its employees when it has no incoming cash flow. Employees become liabilities instead of assets and the company has to downsize in order to save its cost. Post the first wave of Covid-19, hiring has become a really cumbersome and expensive process. It is more viable to hire employees on a contract for a particular amount of time.
A study by Gartner shows that more than 32% of the companies have shifted to contract-based workers replacing full-time employees. This is probably one of the most important measures that a business or business owner can implement, in order to save a substantial amount of money. Now, it is on the HR department to ratify if the contract-based workers are capable enough to handle the work pressure.
Shifting Workforce to Work from Home
Almost all companies shut their offices down by the orders of the government and shifted their workforce to work remotely (work from home). Companies realised that the same amount of work can be achieved by making their employees work remotely. Post Covid-19 pandemic, a business can surely choose to let go of their offices and shift the entirety of the company to work remotely.
This saves a huge amount of money which would otherwise go into liabilities such as office rent, electricity bills for the office, and paying the personnel who are responsible for cleaning and maintaining the office space. As a business owner, the bigger one’s business is and the higher the number of employees one has, the more it will save on cost if it implements a remote work strategy.
Expanded Monitoring of Employees Post Pandemic
As the workforce has gotten more distant, companies have increased their passive tracking of employees. Independent firms use tactics such as checking the clock when employees have logged in through their VPN or when they have logged out from it. Companies have started highly relying on cloud technology. AWS provides services such as AWS Remote Work where an employer can track its employees to keep up the productivity.
AWS offers a PAYG (pay-as-you-go) scheme, which means that companies do not need to pay charges for licensing nor do they have to pay recurring bills per month in order to keep the monitoring service running. In simpler words, if a company runs its operations for 12 hours a day, the company pays the cloud services like Amazon to use the monitoring service for those 12 hours only. Also, if the workweek of the company is five days, then the company cuts down on cost for data collection drastically for the weekends due to the PAYG model. This is a major financial measure that companies have started to implement post the first wave of Covid-19 in order to save their overhead charges.
Policies for Employee Absenteeism
Due to the repercussions of the pandemic, workers across firms and companies may require some time off to cater to their own needs or the needs of their families with already aggravated levels of concern about their own financial circumstances and the economy.
Employee absenteeism could extend beyond medical leave that is available to every employee and relatively brief incapacity guidelines, even if they exist and are available to employees (both full-time and contingent workers) who are isolated and unable to work remotely. Businesses must plan for all potential eventualities and determine when to offer assistance or implement their policies for disability.
With the possibility of a recession lurking post pandemic, corporate leaders and business owners will be looking for ways to cut costs (letting go of workers who are incapable of working due to a situation of health) and brace for impact as the stock market can move both in upward and downward trends. However, cutting costs might hamper the work experience for employees which will reduce the brand name of the company and might lead to consequences that produce a negative impact on the business in the long-term.
The pandemic has resulted in a negative impact on entrepreneurial intentions, particularly small businesses and firms running independently. These businesses are doing everything to survive the recession by taking up creative solutions. Their ability to adapt to these changes, the new normal, is solely dependent on the entrepreneur’s willingness to keep experimenting with creative ideas and new business strategies in order to keep the business running somehow, as well as governmental growth policies. Adapting to the new normal and implementing new strategies as the few ones mentioned in this article is the only way entrepreneurs and businessmen can survive and eventually break out of Covid-19 prison.