Post-Covid economy: 'There will be winners and losers', speaker tells ClubDate Posted: 09 June 2020
Last week’s virtual guest speaker, Frank Holmes, provided members with an exploratory insight into how the Welsh economy is being affected by the coronavirus pandemic, and what may lie ahead in the coming weeks and months for businesses. Mr Holmes, Partner at Gambit Finance and Chairman of the Regional Economic Growth Partnership Board, shared some of the key findings of a newly published report, “Covid-19 – Business Support: The Return – Seeing Around Corners".
Accordingly, 72 per cent of businesses have furloughed employees, and almost one in three (30 per cent) businesses are planning redundancies post-furlough due to both sector contraction and “the additional realisation that many businesses are overstaffed.” Half (50 per cent) of businesses foresee further falls in revenue, two-thirds have been recipients of the government’s Bounce Back Loan Scheme and 60 per cent believe economic recovery is unlikely to be realised until the end of 2021/early 2022.
Yet against this backdrop, Mr Holmes argued optimistically that “it is critical to reconstruct for the future, and not dwell on the past.” Indeed, while recognising the severity of the current situation he was keen to stress that opportunities will also feature in the post-pandemic economy. “Growth may be slower” he said, but it is possible we will see a “burst of innovation” in a reconnected world.
He went on to say that three-fifths (60 per cent) of employers will be prompted to make significant changes to staff training and employee working practices, while 50 per cent have either initiated or plan to expand their product ranges or services in a bid to open up new revenue streams and reposition their organisations from which they can grow once more.
As well as pivoting their offering, organisations may also see opportunity on greater collaboration between industry, academic and government – something Mr Holmes sees as “critical” to the recovery effort. Then there is the matter of geography and increased efficiencies.
The last three months have forced businesses to adapt to remote working, perhaps for the first time. This has enabled employers to ask themselves a number of questions – the answers to which could have a profound impact on the bottom line: do we need all our people to be office-based and could/should we consider reducing the space we currently have; in the face of talent shortages local to us then could we use a remote workforce instead; could remote working continue to be the norm on an ongoing basis?
“The world has changed too much, Mr Holmes said, “the virus is not going away anytime soon, and the challenges ahead are enormous, but the situation will get better.” He added: “We have some amazing companies in our region. This pandemic highlights the need for greater self-sufficiency and support local and enterprising supply chains.”
Asked if he could foresee parallels between the current situation and that which took place after the last recession, Mr Holmes said there is likely to be a rise in the number of new business start-ups. “For many people,” he suggested, “this may be the best alternative. But as always, there will be winners and losers and a significant number don’t get past their third birthdays. Let’s hope that those who do get through are built up from good foundations.”
The full address delivered by Mr Holmes is available to watch via the link below.
You can download the Covid-19 – Business Support: The Return – Seeing Around Corners report by clicking here. You can also watch the full address delivered by Frank Holmes via our YouTube page - click here.