Two-thirds of Irish finance leaders are concerned about the possibility of a fresh outbreak of Covid-19 as businesses reopen.

More than a quarter of Irish finance leaders expect revenues to drop by 25pc or more, a study on how finance leaders are managing the Covid-19 crisis.

According to the study by PwC, in tandem with a webinar on the subject, less than one-in-five are “very confident” about identifying new revenue opportunities.

989 CFOs from across 23 countries, including 69 in Ireland, participated in the study.

“With lockdown easing, Irish businesses who have got through the immediate crisis are thinking about what they need to do to survive and thrive moving forward”

It found that more a quarter of Irish finance leaders believe it will take more than a year for their businesses to recover from the pandemic – longer than any for other country participating in the survey.

Despite the economy rearing to open up, what needs to be discussed is how 67pc businesses are concerned about the possibility of a fresh outbreak of Covid-19 when they reopen, higher than their international peers (58pc).

Other concerns are the impacts of a global economic recession (64pc) and financial/profitability impacts (42pc).

New ways of working

New ways are set to remain a permanent feature of working, with 78pc of respondents confirming greater remote working and work flexibility will be in their future plans

That said, companies are accelerating plans to return safely to the workplace with 88pc planning to reconfigure work sites, up from 76pc a month ago; 72pc planning to change safety requirements, up from 59pc last month.

Key strategies to rebuild revenue streams, according to the survey, are new, enhanced or repurposed products or services (67pc) and changing pricing strategies/payment terms (64pc).  Irish companies though expect to have a keener focus on pricing strategies compared to global companies (48pc).  35pc will enter new geographic markets and just 22pc will focus on upskilling and acquiring new talent.

“Companies are clearly concerned about a new wave of infection and the impact on their financial position,” said David McGree, Strategy and Markets partner at PwC Ireland.

“There is a need to remain focused on adjusting to this new normal, protecting your people and re-engaging your customers while at the same time pursuing new revenue streams through product and service innovation. Companies need to continue to do their scenario planning, and in particular, now in light of a no-deal Brexit on the cards.”

More agile businesses

There is evidence to suggest that some aspects of the current situation will make business better in the long run and therefore may be here to stay. Respondents confirmed that these included: greater remote working and work flexibility (78pc), better resilience (68pc), leaner operations (49pc), automation and technology investments (43pc) and new ways to serve customers (42pc).

“There is no doubt that the workplace of the future will be a very different place, but it is likely to change for the better,” said Ciara Fallon, director for People & Organisation, PwC Ireland.

“The survey confirms that some organisations will look to capture the unanticipated benefits of working through the pandemic and make positive changes to adapt their ways of working.  One fifth of respondents reported not having enough people to do critical work, however, the crisis also highlighted some vulnerabilities in the workforce. The survey suggests companies really need to focus on strengthening critical skills, building new skill sets for the future and supporting employee well-being and resilience.”

With lockdown easing, companies are accelerating their plans to be safe as they transition back to on-site working: 88pc of respondents now plan to reconfigure work sites to promote physical distancing compared to 76pc a month ago; 72pc now plan to change workplace safety requirements (wearing masks, offering testing to workers etc), up from 59pc last month; and over a quarter (28pc) now plan to reduce their real-estate footprint, up from 12pc a month ago. 

HR battles ahead

Nearly six out of ten (58pc) Irish respondents reported to be expecting either temporary furloughs (35pc) or staff layoffs (23pc) in the month ahead but this figure is down from 65pc two months ago. At the same time, one in five (20pc) still expect to have insufficient people to accomplish critical work in the month ahead.   Over a third (35pc) expect productivity losses due to lack of remote working capabilities, down from 61pc two months ago.   

“With lockdown easing, Irish businesses who have got through the immediate crisis are thinking about what they need to do to survive and thrive moving forward,” explained Garrett Cronin, Consulting partner, PwC Ireland.

“Businesses are focused on re-igniting their operations, bringing their people back, but to a workplace that is fundamentally changed. They are confident that they can keep their people and customers safe and are less concerned about productivity losses due to remote working capabilities. They are beginning to focus on the long term and maintaining critical investments.  It will also be very important to rebuild supply chains, pricing strategies and markets in the months ahead.”

Written by John Kennedy (john.kennedy3@boi.com)

Published: 17 June, 2020

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