Coronavirus vs Business: What to Do to Employers During the Quarantine
The spread of the coronavirus has officially received pandemic status. The whole world is preparing that the situation may not improve until the end of summer. However, the shattering effect for the business became apparent much earlier. Experts say COVID-19 has become a catalyst for triggering the global economic crisis. Companies experienced issues with non-fulfillment of contractual obligations, disruption of schedules, non-payment, forced production downtime, and more. According to Bloomberg, the global market in 2020 may lose $ 4.1 trillion due to the coronavirus pandemic. The world economy was already on the verge of recession, and now production growth in key regions of business activity (USA, EU, China) will fall to the lowest levels for the last 10 years.
Global cost of Coronavirus may reach $4.1 trillion, ADB says
Business owners and executives have a triple task today. They have to control the situation, develop a plan of actions and measures, and quickly adapt to changes.
💡 Analyze whether your business is worth saving
No matter how sad it may sound, try to imagine the worst scenario for your company. It is often the case that even if things go badly, for the company it is not the end. You may lose office and reserves, however, the customer base, skills, and your product will remain. In other words, the business is still there, only its scale and format will change. Sometimes, you will have to start from scratch again, but remember that this time, you have more experience and resources.
The quarantine is the right time to clearly evaluate how viable the business is. There is an old saying about a dead horse, which is already useless to feed. Though if you still feel some potential, challenge yourself and try to keep your business. Use the following tips to build your own anti-crisis strategy.
💡 Review Your Solvency
Besides making money, every business also has payment obligations. These two things are inextricable conditions for the successful functioning of the company. A business owner can pay rent, pay suppliers for materials or goods, pay for advertising, transportation, and much more.
In a crisis, when every penny counts, there is a strong temptation not to pay the bills, thus simply deceiving your partners. Naturally, after such actions, it is unlikely that it will be possible to get away with it. Especially if such actions are systematic. Therefore, you should always choose a fair line of behavior like constructive negotiations instead of deliberate deception. If you feel that you can’t pay as much as you paid before, or you can, but want to save, start negotiations with partners about new conditions for cooperation.
💡 Avoid loans
If a loan is hanging on you, try to find ways to repay it as soon as possible so as not to risk your property. And it is also better to wait with new loans in times of crisis. On the one hand, such advice may seem illogical if there are problems with financing. But any lending has its pitfalls as in an unstable economic situation, all debts can become very dangerous.
In cases of delayed repayment of a loan, a business risks its own production and resources, and the entrepreneurs may risk their own property. Any problems with timely repayment of the loan can provoke bankruptcy. If you can’t completely refuse lending at this stage, then at least keep all your loans under strict control and plan all the expenses on loans in advance. You must be very careful not to become a bad payer and entail bad consequences for the business.
💡 Reevaluate your staff
It is always important to be able to distinguish effective employees from those who just sit out in the office and say goodbye to the latter. And in a crisis, this measure is not just important, but extremely necessary. Building a business relationship with staff should be based on a clearly defined employment contract containing salary conditions, a bonus payment scheme, and other financial issues.
The crisis brings a lot of negative aspects for both business owners and hired employees. It becomes difficult to pay a fixed rate to the staff, as the amount of wages depends on the actual profit of the enterprise. The business owner should carefully analyze the financial state of the company and decide if he needs to reduce staff. But in any case, it will be important to set clear plans for production or sales for employees every month in a crisis. Nobody will be happy about this, but the situation dictates its rules.
💡 Optimize your expenses
It is important to divide all company expenses into categories: A – vital for the existence of the company, B – of secondary importance, C – auxiliary, increasing the comfort of work. If financial forecasts are poor, cut back on costs starting from category C.
The introduction of tight control over expenses (transportation costs, stationery, household chemicals, utilities, etc.) brings a quick result.
In times of crisis, it’s worth expanding your usual boundaries and considering looking for other suppliers, carriers, and more budget materials of the same quality.
💡 Upgrade marketing system
If in the conditions of a steadily growing economy, many companies managed to attract customers and increase sales without a strong system of marketing. But in crisis conditions, your processes of attracting customers must be accurate and aggressive. Skills in building sales channels during a crisis are indispensable for survival. You will need effective analytics and accurate processes for finding potential customers in the B2B segment, and active Internet marketing is important for B2C companies. And in almost any business it is extremely important to build an effective sales department. In a crisis, it is the basis for survival.
Quarantine is a very good moment to tighten your competencies in marketing, Internet marketing, and sales management.
It is vital to remember that the crisis is a cleaning of the market from inefficient companies. At the same time, it creates great opportunities and very large capitals are formed in crises. The question is whether you are able to extract opportunities from the crisis. You will have two options for survival: to be fast or dead.
💡 Review your product range
Take a fresh look at your range of products and services. Regular studies of consumer preferences and their solvency should be carried out continuously, regardless of the state of the economy in the country. And during a crisis, you must immediately respond to any changes in consumer behavior. Consumers with unstable profits may no longer be able to purchase your products or services at the same price. It’s time to review the range and include products of the economy category or develop special offers at low prices.
💡 Switch to Remote Work Mode
A lot of businesses today offer their services only online. And their scope is huge, from IT sphere and various educational projects like ivoryresearch.com to entertainments. Moreover, many other companies began to think about transferring part of their employees to permanent remote work after the end of the COVID-19 pandemic. This would help enterprises reduce costs. Consulting company Gartner conducted a survey of 317 financial directors. It turned out that 74% of companies agree to transfer up to 5% of staff to permanent remote work.
Business owners should treat the transition of teams to remote work as an opportunity to learn new tools and optimize resources. In the conditions of an imminent economic crisis, it is necessary to use all available means to adapt to difficult market conditions and to get ahead. And the main thing is to properly organize team communication. Luckily, nowadays there are plenty of tools for productive remote collaboration.
When working distantly, teams need a platform for unlimited communication with each other. E-mail is not always a good option, so it is necessary to choose an efficient way of interaction for faster feedback.
Many free and paid services that can be used to conduct online meetings:
It is the classic tool for online calls. The business version of the application allows group video calls for up to 50 participants. Skype is also a good option when you need to demonstrate the screen. Besides, you can exchange files up to 300 MB on the application.
A platform for video conferencing. It is suitable if the company uses Google services: you can send invitations to Gmail and a link to the call will automatically appear in Google Calendar. Due to coronavirus, enhanced Hangouts Meet features will be free until July 1, 2020.
Zoom is a convenient tool for webinars and video conferencing. It synchronizes with the calendar and records online meetings in the cloud storage. You can communicate through a browser or install the application on a computer. Zoom is a definite leader among meeting solutions.
You can create channels using popular tools like Slack, Viber, WhatsApp, Telegram. All of them are convenient for chats and video calls.
💡 Project control
Efficient planning is the key to success for remote work. The best approach is to use cloud-based software so that everyone has access to the files and data they need at any stage of work. Project management apps also provide access to files for different company departments and send reminders and notifications.
Some of the most popular project management tools for remote work include:
It is a simple tool that is easy to implement in the workflow without long adaptation by the staff. The versatility and flexibility of Trello make it one of the most comfortable case management systems for small teams. If you competently build the company structure in Trello, then a team of 50+ people will be able to interact quite comfortably, and you, as a manager, will cope with the control of key tasks and processes.
It is a simple and effective project management system. It contains tasks, calendars, discussions, profiles. The app allows you to organize collaboration with customers and partners. You can control the degree of preparation of the project and monitor the activity of each team member
How can managers check if their staff is really busy with work? Currently, the progress is evaluated by the number of tasks completed and goal achievement, and not on the hours spent. But it can still be difficult to track the effectiveness of everyone.
If performance starts to reduce, time tracking tools can help a lot.
For a bigger company, you will also need a HR management tool to build and control a productive workflow. CakeHR application will allow setting motivating tasks that make your employees reach their potential, track results, and use team resources to achieve the goals you need.
Remote work needs additional protection measures as many team members will use a WiFi connection to access the company network. Therefore, it is vital to introduce an information security policy before switching to remote mode.
Remote teams should strictly adhere to general safety rules like strong passwords. It is also recommended to store confidential information on a reliable cloud platform. And when working via public networks, it is better to use a virtual private network protected by a VPN service.
* * *
Crises pass, but with them, each company continues to write pages of history. President Lincoln, during a great difficulty, said: “If the challenges grow, then we must come up with these challenges. Since our challenges are new, we must also think and act in new ways.”
The crisis is not the time to set sky-high goals and dream of conquering the world market. Look soberly at the current situation and study forecasts regarding the further development of events in the economy. Put aside experiments for the future, even if they are very interesting, and focus your efforts on how to reduce costs. And, perhaps, the most important thing is not to panic but to act rationally and decisively.
Rebecca Willis: HR manager, personal trainee in management, freelance writer and active guest contributor.
CakeHR by Sage is a cloud HR and people management solution that streamlines and automates your HR processes across the end-to-end employment journey, while creating really engaging and rewarding experiences for your employees.