A new national survey on the business impact of the Covid-19 pandemic shows that over half (56%) of participants across all sectors are currently operating under their normal capacity. An even bigger percentage (76%), has seen their revenues shrink and a quarter (23%) has had to shut down, temporarily or permanently. For just two in ten it is business as usual, while only a tiny fraction (2%) has grown its operations.
It has been five months since South Africa went into lockdown to mitigate the health implications of the Covid-19 pandemic. From a private sector point of view, they have been far from smooth sailing: according to the findings of the new BeyondCOVID Business Survey conducted by specialist management consultancy Redflank. The survey conducted between 7 June and 22 August, shows 76% of the over 1800 participating companies have seen their revenues drop since March 2020.
Sectors most affected are accommodation and food services outlets (93%), construction (89%), arts, entertainment and recreation (87%), service providers such as hairdressers and beauty salons (86%), wholesale and retail (83%), and travel support services companies such as car hire ventures and travel agencies (81%).
Besides that, 56% of survey participants are currently operating under reduced capacity and 23% have reported having to shut down. “Reassuringly, 83% of businesses that have closed expect to open up again at some point. Only 4% of all companies we received feedback from will remain closed. Most of these companies operate in the beauty, hospitality, food and agriculture sector,” says Redflank director Lings Naidoo, noting the above research which forms the backbone of the company’s BeyondCOVID Playbook. Launched today, the eBook outlines tangible and workable strategies to help the private sector adapt and respond to the pandemic and mitigate its consequences.
When it comes to Covid-19 fueled retrenchments, accommodation and food services companies top the list. “68% of respondents in these sectors have had to let all, most, or some of the employees go, followed by water, , hair and beauty salons (62%), construction firms (61%) and entertainment, arts and recreation players (57%),” Naidoo explains.
A key finding the BeyondCOVID Business Survey reveals is that an employees’ value to their organisation no longer depends on them working from an office: over half (51%) of companies said they are dealing with the pandemic by having 20% or more of their staff working from home. This particularly concerns the financial and professional services industries, real estate, and the media, information, communications, and technology sectors.
“Interestingly, 44% of these companies say this could become a permanent set-up. It’s evident that the Covid-19 pandemic has accelerated the remote working trend, which is quickly evolving into a new way of life” Naidoo says, he adds that not all industries have that luxury, such as agriculture, construction, travel, and tourism. “Only 30% of respondents falling into these categories said they have more than 20% of their staff working from home. They also suffered most retrenchments, revenue losses, and cash flow declines.”
To move beyond Covid-19, 36% of organisations are reworking their business strategies to overcome the implications of the pandemic. Others are working on enhancing their internal skills set. “The assets organisations view as most critical to help recovery include enhanced customer services (64%), as well as improved financial (56%), marketing and sales (46%), people management (45%), and planning (44%),” says Naidoo.
When it comes to the future, an average of 20% of participants expect that thee South African economy will take over a year to recover from the pandemic. “Companies in the legal, accounting, finance, and education are most negative about the future,” says Naidoo. “participants in mining, electricity and air-conditioning, water and wastewater are most optimistic.”
Key findings, a snapshot:
– 4% of businesses closed permanently
– 19% of business closed temporarily. Of them, 83% expects to reopen
– 20% of businesses are operating as usual
– 51% of businesses have 20% or more staff work from home. Financial services companies top the list with 84%.
– 56% of businesses are operating at below capacity
– 68% of accommodation and food services companies have had to retrench staff members, and 39% expects more retrenchments
– 76% of businesses have seen their revenues drop. Accommodation and foods services companies top the list with 93%.
Redflank’s BeyondCOVID Playbook will be released on Tuesday, 1st September 2020. To order the free eBook, visit www.beyondCOVID.co.za. To contribute, please sign up as a volunteer, industry partner, sponsor or think-tanker or simply complete the BeyondCOVID Business Survey.