COVID-19 has had significant impacts on businesses and society. Social distancing measures, restrictions on travel and group gatherings are but a few of the ways we have all been affected. But the world is adapting to these challenges, and businesses are adjusting their operations. With recent news reports containing good news about the effectiveness of vaccines developed in response to the virus, hope for a better 2021 without the pandemic is beginning to take root.
Ahead of the PAIB Virtual Conference 2020, the Institute carried out a survey of its professional accountants in business (PAIB) members in August, to find out how the pandemic was affecting their organizations and operations. Over 1,300 PAIBs completed the survey, with 85 percent of respondents from the corporate sector, and 15 percent in the non-profit sector for organizations including not-for-profit organizations, government, regulators and academia. Sixty-six percent of respondents were senior to middle management, with 21 percent executive-level and 13 percent junior. Meanwhile, 41 percent of respondents worked in the financial services sector.
Impact on operations
COVID-19 has seen lockdowns, mandatory closures of businesses, and volatility in financial markets. Slightly over half of respondents indicated that their organizations had faced difficulties due to this market volatility, which affected the corporate sector more than the non-profit sector.
The COVID-19 pandemic has also had negative impacts on the day-to-day operations of businesses. Over half of respondents reported very negative or negative impacts on revenue, customer demand, customer behaviour, business operations, supply chains, and employee engagement. However, fewer respondents reported an impact on their reporting and business development activities, such as new product releases and merger and acquisition activity.
Respondents also reported difficulties in their communications and people engagement, with over 40 percent reporting challenges. These were more difficult for those in the non-profit sector, at over 50 percent.
The pandemic has also required financial projections and budgets to be more dynamic. Of the respondents, 63 percent reported that their organizations had adjusted their financial forecasts for 2020, and just 12 percent reported they had not. Robust forecasting is important for the management of a company to understand the situation an organization faces, and determine the most appropriate responses.
Policies implemented by organizations
Across many areas, respondents reported that their organizations had developed or were considering developing new policies to cope with the disruption. Policies supporting flexible working, including working from home, were the most common. Work-from-home policies were established by over half of respondents’ organizations, while 45 percent said their organizations had developed flexible working hours policies and 20 percent had them prior to the pandemic.
Regarding business policies, while many respondents from larger listed companies reported that their organizations had business policies already in place to handle a crisis, respondents from non-listed or privately held companies said their organizations had developed or were developing plans after the pandemic hit. Respondents at non-listed or privately held companies also indicated at double the rate of other respondents that that they did not have any such policies to cope with the pandemic. The survey suggested that data management policies were increasing as a consequence of the pandemic.
Preparing for the future
How quickly the world can recover from the pandemic will be instrumental in minimizing its long-term damage. For organizations to rebuild and recover, it is crucial for them to have the right business strategy. Overall, it appears from the survey that many organizations were taking a wait-and-see approach to adjusting their strategies. Half of the respondents were uncertain as to whether their strategy had changed, while a quarter said it had changed. The three most common changes reported were changing business plans, implementing new company policies (including work-from-home policies) and more use of digital services.
Preparing for the future requires organizations to invest in technology. Of the respondents, 43 percent indicated that their organization would invest more in technology. Harnessing the right technology is vital for organizations. Tools such as cloud computing can help PAIBs to discover trends in their data and make actionable recommendations based on up-to-date information, and can help organizations to better prepare for the future.
Read more about how PAIBs and their organizations have reacted to the pandemic in the Institute’s latest survey, The COVID-19 Impact: A survey of PAIBs, available on the Institute’s website.
“Over half of respondents reported very negative or negative impacts on revenue, customer demand, customer behaviour, business operations, supply chains, and employee engagement.”