Are Companies Feeling Confident in the Pandemic Environment?

The pandemic has resulted in an unprecedented change to all businesses. The effects have ranged from almost business as usual to complete shutdown with most companies falling somewhere in between.

Businesses have had the task of adapting to the rapidly changing environment. Many have also had to reconsider long-term plans as well as plans for a range of situations that could occur within the next year. Lastly, adjustments have had to be made for good to cope with ways the business environment has changed permanently.

With this vast amount of change and uncertainty, it’s understandable to wonder if companies feel confident in the pandemic environment.

General Sentiment

Many may think that companies are generally feeling pessimistic about the future due to the pandemic. However, a large percentage are feeling good about the current and future environment as they understand how the market is changing and adjust to that, taking on new opportunities.

Companies have faced disruption at various levels which will have affected how they see their health and future. This disruption has led to companies implementing an adjusted strategy or speeding up certain things such as moving to a digital or e-commerce platform.

These changes, while stressful and somewhat forced by the pandemic, have helped many actually grow their business and/or diversify their offerings. This will allow for more optimism going into the rest of 2020 and the next business year.

KPMG’s 2020 CEO outlook survey highlights this with a large majority of CEO’s saying that they “remain confident despite the challenging environment.”

Many are still optimistic about the health of their company. They’re forecasting a successful return to previous operations as well as the ability to take up new opportunities. The climate is especially good for those with offerings relating to tech, e-commerce, cybersecurity, B2B services, and health and medical.

The good health of these sectors, and consequent feeling of positivity and opportunity within companies in these sectors, is shown by a major interest from investors.

Investor Sentiment

Investors are highly interested in companies that will play a role in drug and vaccine discovery and development. They’re looking to invest in the health/medical, health tech, and life sciences sectors with around half of investors wanting to focus on these industries alone or as their number one priority.

Industries that appear to be highly scalable in the current environment with good opportunities for growth such as technology and software companies are a second priority for investment capital.

This shows that companies that are relevant to the current environment (such as health and medical companies) and/or have been easily able to adapt such as tech are going to be feeling confident going into Q4 of 2020 and 2021 and beyond.

Whether companies have been able to take advantage of opportunities or not, there are challenges and uncertainty for all to face.

New Opportunities

The pandemic, while catastrophic to many businesses and parts of society, has also bought a lot of opportunities. Those businesses that were able to adapt and take on these opportunities are the ones that have fared the pandemic best and will be feeling confident at the moment.

A move to digital models has been one of the major changes seen. While many businesses were moving more and more toward digital offerings, the pandemic accelerated this.

This includes the digitalization of current offerings and the creation of new digital revenue streams. In publishing alone, it’s estimated that the pandemic sped up the move from print to digital by three to five years.

Those that were prepared for this and had a good digital media base, will be feeling good in the current environment. They may have seen gains they did not expect to see from digital for a few years, such as steep increases in paid subscriptions and/or digital advertising revenue.

Those that manage to generate a large amount of revenue from customers as opposed to advertisers, such as publications with paywalls, will additionally be more confident and likely to survive and even grow.

Demand for media has increased during the pandemic. This is due to people wanting to consume more news on topics such as health and the economy. They also want to read more due to additional free time seeing an increase in publications like fiction and hobby-based books. If publishers can reach these consumers digitally and get revenue from them, then they have a good model and should be confident going forward.

If print does return as a large part of their operations again these businesses can additionally benefit from a more diversified range of offerings and distribution platforms. This will help with growth and risk mitigation both of which are important in an uncertain market.

Uncertainty and Challenges

Whether companies have been able to take advantage of opportunities or not, there are challenges and uncertainty for all to face. The publishing industry, as mentioned, is one area that has seen a large amount of change as well as losses and uncertainty for many.

Even before the pandemic, publishing companies faced a lot of challenges. These have been accelerated due to the virus. For example, print has become even less relevant and advertising revenue has become even harder to acquire.

This has understandably left many publishers quite nervous and uncertain about their future. Smaller publishers are especially likely to be struggling.

Many smaller print publishers never moved much into digital despite a growing trend of digital over print. Therefore, the jump to needing to be largely digital was much more difficult than for those who already had a decent digital presence such as larger publishing houses.

Additionally, even if many have seen an increase in digital sales, they generally haven’t made up for the loss in print revenue if that was the main source of income before the pandemic.

This means that even those that have been successful with a move to digital may be uncertain about the future. These companies may be considering laying off staff or cutting their budget in other ways to make up for the threat of not being able to return to their previous print revenue levels.

Another issue is that it isn’t easy (or cheap) to rapidly build a strong online presence. Some that were only using digital as a small part of their business will have found reaching their audience online difficult and possibly outside of their skill set.

For example, instead of competing on newsstands by carefully choosing cover images and headlines, they now have to compete on social media and search engine results pages. Success on these platforms is focused on more technical skills, especially for the latter.

With many small publishers having had tight margins and a reliance on government grants before the pandemic, these changes may be too much to handle.

Employers now have the challenge of balancing getting employees back to the office, making changes to keep them safe, and retaining employees who have decided they want to work remotely permanently.

Remote Working and Return to The Office

There is also uncertainty about the location in which staff will work. Remote working is something that many companies had to switch to full time for all staff.

However, CEOs and other high-level management are starting to worry about this being for the long term. Despite its benefits, having employees work remotely affects collaboration, creativity, learning, and the checking and monitoring of work.

Management may now be unsure as to what to do about work location in order to keep all employees satisfied and productive. A main issue will be the problem of getting employees back to the office when they’re possibly worried about safety. Many employees will also not want to stop working at home as they’ve enjoyed it and felt more productive.

Employers now have the challenge of balancing getting employees back to the office, making changes to keep them safe, and retaining employees who have decided they want to work remotely permanently.

Staff Retention and Recruitment

Another worry is related to the acquisition of talent in the current environment. Depending on a company’s industry and the positions they have open, many may find it harder to acquire highly qualified talent as employees are wary to make a change.

Despite this, a move to remote working has resulted in some seeing their talent pool increase as they can hire from a larger geographical area. Open positions are also a possibility for workers that previously could not work a standard in-office, 9-5 schedule such as stay at home parents.

Being able to find and retain high-quality employees is likely to be a concern of a lot of employers as a result of the pandemic. Being successful in recruitment will rely on employers keeping on top of trends in the employment market, adjusting their employee retention plan, and highlighting different benefits when trying to attract new employees, such as offering a lot of flexibility in their work schedule.