Few, if any, businesses were prepared for the impact of Covid-19. Some businesses were less affected but many felt effects on demand and their 2020/2021 business plans.

The businesses that have survived are mainly those that adapted and quickly developed a crisis management plan. This is especially true in hard-hit industries. Businesses that could not adapt likely had to close, or at least make steep budget cuts and lay off staff.

Even when the pandemic is under control, the market will be changed forever and will not look as it did in 2019 again. Many trends that occurred or were accelerated due to Covid-19 will remain and continue to grow post-pandemic.

In this blog, we discuss the major changes brought by the pandemic and how these changes have affected businesses.

The Impact of Covid-19 on Businesses

The Digital Transformation

A primary impact of Covid-19 has been the rapid acceleration to digital. Both as a means of communication and as a sales and promotion platform.

Being unable to meet in person has led to meetings, both internal and external, being held via digital video call platforms. There has also been increased demand for digital organization and planning tools, such as team management software.

There has also been a necessary increase in using digital platforms to reach customers. For example, more and more companies have had to move to ecommerce operations to reach their customers.

Companies that you would not necessarily have thought of having digital offerings have also had to deal with the digital transformation. For example, doctors' offices have moved to holding appointments via video call where possible.

A move to digital to connect with customers, coworkers, and other business contacts has been a major impact of Covid-19.

Changes to the Workplace

The impact of Covid-19 on where we work has been very noticeable too. When the pandemic first began, office employees were forced to work from home. This was a new experience for many but the majority of companies have found the move successful.

This impact has changed the workplace forever. Many companies are considering sticking with the remote setup post-pandemic. Others are considering a flexible schedule, allowing employees to work from home some of the time.

The success in moving to a remote setup has resulted in companies thinking about their office spaces too. Many will give up their office spaces while others will look to downsize.

This may also lead to former work hubs, such as city centers, looking very different. They will be quieter and more sustainable but businesses that rely on employees such as coffee shops will suffer, as they have during the pandemic.

No matter what companies decide to do about office location, they need to start drawing up plans for executing their decision. Whether that’s making the office safer or setting up for permanent remote work.

Changes to Employee Management

The pandemic has been hard on most people. For example, a societal impact of covid-19 has been social isolation for many. Management has needed to keep this in mind and offer more support to protect the mental and physical health of employees.

Another issue to keep in mind is the increased chance of employee burnout when working from home. Management needs to be clear about the hours their employees are to work and that they shouldn’t be working overtime most of the time.

Management should also make it clear how they think employees are performing. Without daily face to face contact with management, employees can worry that they are not performing as they should leading to stress, anxiety, and possibly burn out.

If you had to make lay-offs due to the pandemic, it’s also important to try and keep the morale of the remaining employees high. Be transparent as well about whether their jobs could be at risk. The same goes for boosting morale if raises and promotions have had to be put on hold.

Both where employees work and how they’re managed has been changed due to the pandemic.

Changes to Hiring

The hiring process has also been uprooted by the pandemic. Interviews have had to be moved to digital platforms. This can make it more difficult to judge candidates effectively.

The onboarding process has also had to be adjusted. New employees often receive in-person training. But due to the pandemic, this process has to be undertaken digitally. Onboarding is now done via video or call, and through regular email and messaging.

Additionally, new employees may find it harder to fit in having never met their coworkers in person. This can negatively affect their output and motivation.

Changes to Consumer Demand

The pandemic has seen changes in consumer behavior and demand. This includes increased demand for online/delivery services and a decreased demand for products and services that require in-person contact, such as dining out.

Some of these trends will continue post-pandemic while others will fade.

The move to more online shopping and consuming certain products online, such as print publications like magazines, is likely to continue. Even out of the pandemic, the ease of shopping and consuming online will stay appealing and this trend is likely to grow.

On the other hand, some changes, such as a decrease in eating out, will disappear. In fact, there is likely to be a steep increase in social activities such as dining out, going to the movies, and traveling once restrictions are lifted. Consumption of these services is then likely to return to a similar level as before the pandemic.

Changes in Spending

Something seen during the pandemic that may continue post-pandemic is a decrease in discretionary spending. During the pandemic, consumers thought more about budgeting, even if their income was not affected.

The pandemic made many aware of the importance of saving and the fact that their income could disappear instantly. This will cause more of the population to save a percentage of their income and have a budget to avoid being caught out should something affect their income in the future.

More consumers will likely be comparing prices too. They will also be looking for the best deal or waiting for sales and promotional offers on the products and services they want/need.

During the pandemic, consumers thought more about budgeting, even if their income was not affected.

Changes to Supply Chains

Supply chains have been impacted by Covid-19 too. This has drastically affected some companies. Having one part of a supply chain not working can ruin a whole operation.

To adapt, businesses have had to quickly find alternatives if their usual supplier cannot fulfill their order. Many businesses have also streamlined their operations, removing unnecessary suppliers or moving production of certain elements in-house.

The pandemic has highlighted the negatives of having a complicated supply chain for some businesses as well. Relying on lots of suppliers for your own operation to run successfully can end badly if even a few of those suppliers encounter difficulties or close completely.

This has been especially true during the pandemic for companies that have an international supply chain. Differences in restrictions in each country, border closures, and global travel restrictions will likely have caused more problems than if a completely domestic supply chain was used.

Increased Budget Concerns

A lot of businesses have been impacted by drops in revenue due to covid-19. This will result in decreases in available budget too. Even if revenue has been stable, uncertainty may cause some businesses to reduce budgets.

Businesses will have been reworking budget plans and sales projections and will continue to need to do this. It’s a good idea to create projections for multiple scenarios including a best, worst, and likely case when doing budget planning.

Many companies have had to deal with supply chain issues including delays and loss of suppliers.

Changes to Strategy

Companies need to be planning for future crisis management. Many companies are used to preparing for industry challenges and threats. But few prepare for national and global upheaval.

This is something that now needs to be considered. Globalization makes the likelihood of another new virus spreading relatively high. Other issues such as climate change effects could be a problem too. Global disruption may become something that businesses have to prepare for and live with long-term.

In the shorter term, planning needs to be flexible and focus on a range of possible scenarios. If this is not done, companies risk facing major problems if the Covid-19 situation does not change in the way they thought.

Governments and other officials may have one prediction for the rest of the year, but these change quickly. Again, businesses need to plan for lots of scenarios, keep track of the current situation, and adjust plans and strategies as needed.

In Conclusion

Covid-19 has affected all businesses, some much more than others. Whatever industry they are in, companies have had to very quickly adapt and adjust to a constantly changing environment, with many scenarios occurring that will never have been imagined.

While surviving will have been a struggle for many, being able to plan around a crisis will make businesses more resilient to future challenges and threats they may encounter. The effects of Covid-19 may also have caused businesses to adjust their operations and take advantage of opportunities in a way that will greatly benefit them well past the end of the pandemic.

The Impact of Covid-19 on Businesses