We are once again in national lockdown until mid-February (which may stretch to the end of March) to fight against the fast-spreading new coronavirus variant.
The prolonged shutdown and severity of restrictions have resulted in severe challenges for SMEs. Small businesses are the backbone of the UK’s economic system; heavy blows have bowed this down despite the Government’s strategies to help it stay upright and businesses viable.
In this article, we will discuss the five major concerns of Chief Financial Officers (CFOs) for SMEs during the pandemic crisis.
Let’s get started…
1. Issues around work from home
Unlike MNCs and large businesses, most small businesses have started to return to the office. But, once again, the Government’s firm stay at home protocol has created a cloud of confusion for employers, forcing employees to work from home. Both employers and employees want to get back to a shared physical workspace, at the same time, many employees now prefer working from home, and employers are enthused by the increased productivity – confusion!
Corient has successfully adapted to WFH culture since March 2020. We have set systems in place to keep our employees engaged in the cloud workspace. We have kept up our training, complaints, and grievances, and employee awards ecosystems to keep our staff happy and productive, and to transition new employees into our work culture. Our investment in technology has paid off in excellent communications, support, and smooth workflow.
2. Reduced revenues
Businesses will lose millions of pounds in revenue due to the shutdown of hospitality and non-essential shops. The disruption in business in tourism, pubs and restaurants is expected to adversely impact survival, more so in this lockdown phase than in March 2020. According to Deloitte’s CFO, business revenues will face a 22% fall compared to pre-COVID estimates. Some significant structural changes will be expected from all SMEs to survive this major downfall.
3. Innovation at stakes
Innovation is a result of close collaboration of ideas and great teamwork. However, with major IT employees moving back to their hometowns from March 2020, companies faced repeated internet and network connectivity challenges. This crushed the companies’ spirit of innovation with their dispersed workforce and shattered work environment. However, even in WFH culture, Corient observed a significant boost in employees’ productivity. Corient’s team mitigated the gap in creative performance via regular video conferencing among all team members. This initiative has boosted the creative spark and diversity of thought to bring innovative ideas for the business.
4. Sceptical stakeholders
With rapidly changing Government rules and regulations in the COVID scenario, stakeholders have a reduced say in business crafting. This circumstance has put SMEs under pressure and services on hold to customers, employees, suppliers and investors at large. Planning and traditional methods of execution of plans have almost vanished during the pandemic.
Despite uncertainty due to COVID, we at Corient have kept our internal and external stakeholders engaged and happy. This clarity with stakeholders is maintained with regular interaction through calls, video conferences, emails and reports, which also helps keep their decision-making process going.
5. Employment challenges for new graduates
With the COVID lockdowns continuing to tighten hiring budgets, more and more companies worldwide are placing a freeze on hiring, cancelling internships and pushing back joining dates. Rising uncertainty has forced many businesses to hold off hiring for this year regardless of the business needs. According to a study conducted by the National Association of Colleges and Employers (NACE), 70% of companies consider revoking employment and internship offers for now. New graduates of 2020 will face considerable hurdles before landing a job.
The final words…
UK business can only grow if SMEs use financial resources smartly. Businesses need to make financial decisions using professional financial advice to support them in the long run.
Other critical aspects of the survival of SMEs are access to credit and financial management of the business. CFOs of all major companies will agree that SMEs need to implement operational and strategic changes in the system to act as a long term solution to rebuild and renew the UK’s economy.
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