The impact of the past eight months has undoubtedly had very serious long-term implications for many UK businesses. As the economy faltered with the onset of the pandemic, the majority of businesses have suffered various levels of financial difficulties, as well as having to adapt to new ways of working.
However, despite the economic and social impact of COVID-19, businesses are adapting and morphing in order to survive.
A recent article by Meghan Oliver focused on the business impact of COVID-19 as well as the implications Brexit is already having on UK businesses. The current situation is especially difficult, and any economic recovery will take many months.
However, despite the economic and social impact of COVID-19, businesses are adapting and morphing in order to survive. Through analysing data from our Coronavirus Data Tracker and new Business Tracker, we’ve taken a look at how businesses are planning for the future, as highlighted in our recent webinar.
Our data shows that almost three quarters (73%) of businesses are feeling confident that they will still be operating by the end of 2021; although only 22% say that they’re very confident. The flip side of this is that just over a quarter of businesses aren’t confident, highlighting the levels of uncertainty that remain.
Confidence is higher in medium and large businesses (78%), compared to small business (71%). This reflects their ability to adapt to manage costs, combined with the fact that they may have more working capital, or feel better able to access support.
Support for businesses
Whilst the majority of businesses anticipate that they will survive, there’s no question that support is needed to help many through the current climate. What we are seeing is a marked difference between the level of support that small businesses feel they’ve had so far, compared to medium and large businesses, specifically from their financial services providers.
Whilst just 8% of medium and large businesses state that they have not received any support from their business banks since the pandemic began, this rises to over a quarter of amongst small businesses (28%). Further to this, for sole traders and microbusinesses this reaches a staggering 40%, highlighting a marked disparity when it comes to the size of the organisation.
It’s a similar picture with insurance providers, although the disparities here are even more marked. Just under two in five people in small businesses (39%) say that they haven’t received any support from their insurance providers, compared to just 10% of medium and large businesses. Scale is a key factor at play here. For medium and large businesses, brokers are more likely to be used, who will be much better versed in the support that is available and how best to access this – for example through changing property insurance where promises are unoccupied, or SORN fleet insurance.
During the initial lockdown we did see examples of insurers proactively offering consumers support (Admiral’s rebate on car insurance), and these have been well received and boosted brand affinity. From our data we see that small businesses feel that they’ve been overlooked, and/or have not had sufficient knowledge to access support.
While we continue to go through further waves of lockdown, tiered restrictions, and economic upheaval, this does present an opportunity for insurers to offer ongoing support even if only through greater communications of what is available to small businesses.
Implications of home working
For the last nine months working from home has become the norm for many employees and it’s also become a lifeline to ensure companies can still function. This new way of working however does have significant implications, in terms of staff wellbeing, as well as productivity.
As the second lockdown continues, 30% of small businesses and 48% of medium and large businesses agree that since staff have been home working, they have been working longer hours. The problem is that, as far as the businesses are concerned, employee productivity has also decreased during this time (31% of small businesses and 51% of medium and large businesses agree).
Whether this has been compounded by the pressures of family care, furlough, potential redundancies, or the creativity void driven by a lack of face to face conversations, these trends have important implications in terms of employee well-being.
Three key challenges
In October we asked businesses what their three current biggest challenges are, and what they anticipate their future challenges will be.
For small businesses, the key issue is the drop of customer demand (38%), drop in revenue and how they can remain profitable (34%), and ultimately working capital and cash flow (30%). Due to the precarious position many small businesses are in, they can’t see beyond the current situation, so their long-term concerns remain.
For medium and large companies remaining profitable, cash flow and working capital are obviously important, highlighted by 28%, but they’re slightly lower down in terms of priorities. For these organisations cyber security is a top priority in the immediate short-term (34%); in terms of how to engage with customers with new ways of trading, as well securely meeting employees needs as they work from home. In the longer term, the key priority for focus is employee well-being (31%), along with strategies for maintaining (or rebuilding) profitability (29%).
Ultimately businesses and the economy will continue and it’s not all just about survival. As businesses recognise the creativity drains of remote working, employee wellbeing and productivity will start taking centre stage, especially for larger companies. As the initial ‘heads down and power through’ momentum fades, supporting and engaging the workforce in a virtual world will become ever more critical.
In our next article we look at the future of the workplace, with the continuation of remote working, the 5G revolution and the need to support the wellbeing of employees in these difficult times.
On Thursday 5th November we hosted our latest webinar, exploring how UK businesses are adapting in the wake of the COVID-19 pandemic, and preparing for the implications of Brexit. If you’d like to review or share the content you can:
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Our new Business Tracker, launched in October, aims to identify general business sentiment with a more forward-looking focus, addressing business challenges and future strategies. For more information about our new UK Business Tracker please download our rate card and/or get in touch with one of our business experts here.
Historical data is based on our fortnightly business COVID-19 tracker, launched mid-March 2020, (650 businesses: 400 small businesses & 250 medium/large businesses.) and newly expanded monthly B2B tracker, launched in October 2020 (1,000 businesses: 750 small businesses & 250 medium/large businesses.