While businesses have struggled with the COVID-19 pandemic, they’ve learned some valuable lessons, too.
Here are 9 top takeaways. We’ll focus on what the pandemic can teach companies about financial planning, business technology strategy, human resources management and logistics. As we consider these areas, we’ll look at what challenges business owners faced during the pandemic, how they overcame them and what their solutions have taught about preparing for the future.
1. Prepare an Emergency Financing Plan
The pandemic drove home the need for cash-flow management. Insufficient funds to maintain staff and operations was the biggest challenge businesses faced during the first quarter of the pandemic, according to a global survey conducted between March and June of 2020 by the International Labour Organization (ILO), an agency of the United Nations dedicated to maintaining international labor standards.
The survey found more than 60% of companies didn’t have enough cash flow to handle the situation effectively.
This crisis forced many companies in the U.S. to turn to government relief programs such as emergency SBA grants and loans. While such stopgap measures may be necessary in a crisis, good financial planning which positions you to tap into financing resources when needed represents a more sustainable long-term strategy.
To better prepare for the future, companies are shifting to better financial forecasting which leverages technology for more frequent cash-flow projections based on real-time data, reports online accounting news provider Accounting Today. Anthony Jackson, a principal at professional services provider Deloitte, recommends that companies use technology to make weekly projections of liquidity and cash flow rather than relying on year-old data to make financial planning decisions.
2. Keeping Up with Technology Gives Your Business a Survival Edge
The shift to technology-based financial projection reflects the broader effect the pandemic has exerted on accelerating digital transformation.
When lockdowns went into effect, businesses without the ability to continue operations digitally faced a radical crisis. Brick-and-mortar-based industries such as restaurants were devastated. On the other hand, some technology-oriented companies thrived. For example, tech giant Amazon.com increased its profits nearly 200% during the pandemic.
For many business leaders, this provided an incentive to prioritize digital transformation. The pandemic accelerated digital transformation initiatives at 59% of organizations, while prompting 66% of organizations to complete initiatives that had previously met resistance, according to a survey by technology provider International Business Machines.
3. Ecommerce Can Sustain Your Sales
The sustainability of companies such as Amazon during the pandemic stemmed partly from a reliance on ecommerce sales. As lockdowns cut into brick-and-mortar retail trade, consumers turned to online shopping. The global ecommerce sector increased its share of total retail sales to 19% from 16% during 2020, according to the United Nations.
This trend highlights the growing importance of employing digital marketing strategies to drive sales. Companies that invest in marketing methods such as blogging, search engine optimization, digital advertising and social media marketing will be better positioned to command future sales from ecommerce shoppers.
4. Cloud Infrastructure Promotes Resilience
For companies pursuing digital transformation in the wake of the pandemic, cloud computing plays a critical role. Where lockdowns have undermined business models based on a conventional brick-and-mortar office and on-site information technology (IT) center, a cloud-based infrastructure enables companies to run their operations from any location while maintaining a minimal on-site presence.
Accordingly, the pandemic has promoted increased cloud adoption. This year 90% of enterprises “expect cloud usage to exceed prior plans due to COVID-19,” according to a report by cloud-based IT management solutions provider Flexera.
Reliance on public cloud providers as well as hybrid cloud solutions is growing. As cloud usage increases, many companies are facing the challenge of accurately estimating cloud costs. Again, this underscores the central role financial planning plays in post-pandemic business success.
5. Remote Workers Can Benefit Your Business
A key component of digital transformation is the effective utilization of remote workers, and a major effect of the pandemic was increasing the remote labor force dramatically. By the end of the first quarter of 2021, 72% of U.S. white-collar workers were working remotely at least 10% of the time, a level which has stayed stable since October 2020, according to Gallup polling. Asked whether they would continue working remotely given the chance, 35% said yes.
Amid this trend, employers are reviewing their remote work policies and determining how to adapt to the new normal. A survey conducted by professional services provider PricewaterhouseCoopers (PwC) in November and December of 2020 found 83% of employers felt the shift to remote work had been successful for their company, with companies seeing gains in productivity and other benefits.
However, employers and employees differ on:
- How many days a week workers should be in the office
- How fast the return to the workplace should proceed
Companies that can negotiate an agreeable balance of remote and office work with their employees will have a workforce advantage going forward.
6. Upskilling Can Help You Adapt
Digital transformation, cloud migration and the shift toward a more remote labor force have reinforced the need for workers with technology skills. A survey by research firm Gartner found 58% of workers need new skills to do their jobs. However, because of tight budgets brought on by the pandemic, 74% of organizations were forced to freeze hiring.
This means that rather than recruiting new employees to fill skills gaps, companies are turning toward upskilling their existing labor force.
Upskilling can provide a faster and more cost-efficient path toward closing skills gaps than recruitment, which can be a long and expensive process. Employers who prioritize training their existing staff will find it easier to rise to the challenges of digital transformation.
7. Employee Well-Being Is a Priority
The pandemic has heightened employer awareness of how employee well-being affects business. In addition to the impact of the coronavirus on employees’ physical health, many workers faced emotional health challenges. Employees struggled with issues such as isolation and balancing life and work while working from home.
In response, employers are placing an increasing emphasis on benefits that promote employee well-being in areas beyond physical health. A survey by financial services firm Fidelity Investments and health policy nonprofit Business Group on Health found that in 2021, 92% of employers are increasing mental health and emotional well-being benefits, while 74% are increasing programs to support work-life balance, 64% are enhancing child care support and 83% are increasing support for employees’ financial well-being.
As more employers offer these types of benefits, companies will find following suit increasingly important to stay competitive at recruitment.
8. Employee Retention Is Critical
Another human resources challenge emerging from the pandemic is employee turnover. As businesses open up again, employers are returning to the office. However, many employees want to keep working from home. They are prepared to look to other employers to maintain their newfound workplace flexibility.
A survey by insurance provider Prudential found 42% of workers anticipate looking for new jobs if their employers won’t let them continue working from home and 26% plan to look for new companies after the threat of the pandemic subsides.
To avoid what human resource analysts are calling a “turnover tsunami,” companies will need to prioritize employee retention. Businesses that offer workers incentives to stick around will face fewer problems with skills gaps and talent acquisition.
9. Prepare for Supply Chain Disruptions
The pandemic has wrought havoc on supply chains. For a time, retailers were stuck with inventory they couldn’t sell. But as consumers have begun buying again, supplies are running short of the rising demand. A U.S. Census Bureau survey found 36% of small businesses faced delays with domestic suppliers during the first week of June, as summarized in a White House report on the situation.
While these developments were beyond anybody’s ability to predict or manage, they underscore the need to be prepared for supply-chain disruptions. Businesses that develop agile supply chains going forward will place themselves in a better position to adjust to supplier fluctuations.
Gartner recommends that logistics managers develop a framework for responding to disruptions that takes into account factors such as geographic scope of supplier difficulties, logistics labor shortages, capacity constraints, collaboration with shipping partners and cost, among other considerations.
Use the Pandemic to Prepare for the Future
The pandemic has taught companies a wide range of lessons that can help businesses prepare going forward. The sudden economic downturn underscored the need for financial planning to prepare for emergencies. The disruption to brick-and-mortar business highlighted the value of digital transformation in areas such as:
- Cloud infrastructure
- Remote workforce management
Digital transformation also has driven home the need for human resources teams to focus on:
- Employee well-being
- Worker retention
Supply-chain disruptions have reinforced the need to prepare logistics contingency plans. Companies that take these lessons to heart will have an advantage going forward into the future.
When it comes to preparing for future financial emergencies, knowing how to find emergency financing can be critical. Fast Capital 360 offers a wide range of business financing options for companies that need cash. If you’re wondering what financial resources may be available to sustain your company in an emergency, browse our blog for financing tips or take a few minutes to fill out our free online application and see your loan options.