Six Helpful Steps to Get Companies Back in Black From COVID-19 Blues

It’s now safe to say that COVID-19 is a black swan event that took the world by shock. While experts had long warned of the dangers of overexploiting natural resources, the sheer extent to which this virus disrupted global supply chains is unprecedented in modern memory. Wuhan plays a vital role in global manufacturing, especially in opto-electronic technology, biology engineering, pharmaceutical, automotive, and steel manufacturing. The city is home to approximately 200 Fortune Global 500 firms with a recent study suggesting that approximately a fifth of and nearly all Fortune 1000 companies have Tier 1 and Tier 2 suppliers in Wuhan respectively. Even companies with no direct presence felt the brunt of the lockdown as Wuhan boasts the largest inland port in China, and is less than 1200 km from other hubs such as Beijing and Shanghai.

Although it is too early to completely assess the economic and psychological impact of COVID-19 as of June 2020, companies can certainly take some measures to minimize the long-term implications. It is absolutely essential that organizations get back (or at least attempt to return) to a ‘business as usual’ approach in a post-COVID world. A few proposed steps are –

  • Communicate, educate, and reassure – Employee welfare and safety must be an organization’s topmost priority. It would comfort employees to a great extent if the senior management educated them and the company suppliers about the virus, its symptoms, and containment strategies adopted. The HR department could review records of employees with prior health conditions to suggest alternative work arrangements to minimize the risk of contracting COVID-19. If this is not feasible, communication should be properly executed and employee proposals encouraged.
  • Better safe than sorry – Adopt a preventive as opposed to a reactive approach with a flexible sick-leave policy being the foremost choice. Although some symptoms might not be COVID-19 related and could be due to influenza or the common cold, it is always better to err on the side of caution. Lost productivity from some employees staying at home is undoubtedly less expensive than closing an entire manufacturing unit, office premises, or distribution center.
  • Accept increased absenteeism – Unfortunately, absenteeism is bound to increase as health screening protocols are rigidly enforced and employees displaying symptoms are strongly urged to self-isolate. Containment policies result in labor interruptions and shortages. This can range all the way from travel restrictions, school closures, to quarantines for those exposed to COVID-19 directly.
  • Make flexible work arrangements part of company culture – Often key to seal contracts between parties in different countries, corporate travel has recently been highly problematic as it has been directly linked to the unchecked spread of COVID-19. Companies have rather belatedly begun implementing policies that restrict non-essential travel. Going forward, flexible and remote working must be seriously considered as a viable alternative, particularly in back-office and other clerical jobs.
  • Align IT support with ever-changing workplace requirements – As remote working and flexible work become commonplace, IT systems & support will need to adapt to the requirements of the next decade. An explosion in online activity in the BYOD era has had a tremendous effect on network robustness, data security, and system stability and this is particularly so in nations with a less developed telecom infrastructure. Companies will have to be ahead of the curve to have the appropriate systems and well-trained staff in place to guarantee a seamless operation that can cope with an ever-evolving workplace.
  • Keep the cash registers ringing – Companies will almost certainly have to develop a treasury plan for effectively managing their cash reserves. The immediate priority should be reducing aged accounts receivables with a laser-like focus on collection maturity. If possible, extending accounts payable to conserve cash would be extremely beneficial. In a survey conducted by Peking and Tsinghua University, 85% of SMEs in China were anticipated to run out of cash within months if COVID-19 was not managed, emphasizing the vitality of sound cash flow management policies for the long-term stability of businesses.

In conclusion, organizations are advised to view the current global scenario as an opportunity and not a crisis to push the necessary changes to secure their long-term prosperity. Companies that fail to do so would only have themselves to blame if they fall behind their nimbler rivals more attuned to the direction in which the COVID-19 winds are blowing.

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