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A new report on the impact of the COVID-19 pandemic on businesses shows that their biggest challenges have been insufficient cash flow to support staff and operations, supplier disruptions and access to raw materials.
With companies already under significant competitive pressure before the crisis, government restrictions, health challenges, and economic fallout from COVID-19 further delayed many companies.
Disrupted cash flow was the biggest problem, the survey found. More than 85 percent reported that the pandemic had a high or medium financial impact on their operations. Only a third said they had sufficient funds for the recovery. Micro and small businesses (those with 99 or fewer employees) were the most affected.
The survey, conducted by employers and business membership organizations (EBMOs), involved more than 4,500 companies in 45 countries around the world. EBMOs collected data from their business members between March and June 2020. Companies were asked about business continuity, financial health, and their workforce.
At that time, 78 percent of those surveyed reported that they had changed their operations to protect them from COVID-19, but three-quarters were able to continue operating in some form despite measures stemming from government restrictions. Eighty-five percent had already implemented measures to protect staff from the virus.
Almost 80 percent said they planned to retain their staff; larger companies were more likely to say this. However, about a quarter reported that they anticipated losing more than 40 percent of their staff.
Looking ahead, you need to prepare for unforeseen circumstances and mitigate the risks associated with a business disruption. Less than half of the companies surveyed had a business continuity plan (BCP) when the pandemic hit, and micro and small businesses were the least likely to have made such preparations. Additionally, only 26 percent of the companies that responded said they were fully insured and 54 percent had no coverage at all. Medium-sized companies, (those with 100 to 250 employees), were more likely to have full or partial coverage.
Strengthening government measures to support businesses is also essential for their recovery. Four out of 10 companies said they had no funds to support business recovery, while two-thirds said funds were insufficient. Of the sectors analyzed, the tourism and hospitality sector, followed by retail and sales, was the most likely to report financing problems.
Production of the report was facilitated by the OEBs who collected and shared the survey data with the Bureau for Employers’ Activities (ACT / EMP) of the International Labor Organization. ACT / EMP is a specialized unit within the ILO Secretariat that maintains close and direct relationships with employers’ constituents.
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