The Covid-19 coronavirus pandemic has caused major disruptions to economic activity, forcing businesses to adapt and rethink how they operate.
Redflank – a specialist management consultancy – conducted a BeyondCovid Business Survey which found that 76% of South Africa’s businesses reported revenue losses because of the coronavirus pandemic. Findings also show that 4% of businesses have permanently shut down while 19% of business are still temporarily closed with the expectation that they will re-open.
The BeyondCovid Business Survey used data collected from June to August with more than 1 800 respondents.
Redflank director Lings Naidoo said they interviewed key industry leaders to analyse the impact of Covid-19 on South African businesses. Naidoo said the worst hit businesses were micro-enterprises which were only allowed to operate at 14% capacity and small enterprises which were only operating at 17% capacity.
The survey found that sectors most affected were accommodation and food services outlets, construction, arts, entertainment and recreation, service providers such as hairdressers and beauty salons, wholesale and retail, and travel support services companies such as car hire and travel agencies.
“Overall, 56% of survey participants are currently operating under reduced capacity. Most of these companies operate in the beauty, hospitality, food and agriculture sectors,” said Naidoo.
The survey also found that Covid-19 fuelled a high number of retrenchments in these very industries.
“Accommodation and food services companies top the list. Of the respondents, 68% said they had to let most of their employees go. The hair and beauty salons, construction firms, entertainment, arts and recreation players have the highest job losses,” said Naidoo.
The survey also showed working from home was a key developing trend in some sectors. Some employees no longer found high value working from an office, the survey revealed.
“You see this trend a lot in the financial and professional service industries such as real estate, the media and ICT sectors,” said Naidoo.
“Interestingly, 44% of these companies say this could become a permanent set-up. It’s evident that the Covid-19 pandemic has accelerated the remote working trend, which is quickly evolving into a new way of life,” he said.
Redflank also launched a BeyondCovid Playbook intended to help enterprises shape their response to challenges and opportunities brought about by the pandemic. The playbook outlines strategies for how businesses can adapt and respond to Covid-19 and how they can maximise business survival, job protection and job creation.
Naidoo said 36% of organisations are reworking their business strategies to overcome the implications of the pandemic.
“Most said they will pay increased attention to improving customer services, the state of financial reporting, marketing and sales, people management, and overall better planning,” he said.