A global pandemic brings unique economic challenges
The Covid-19 outbreak has significantly changed the economic landscape across the world.
Several countries have done a good job of managing the crisis. At the same time though, there are several countries where the situation continues to deteriorate. As a result, they’ve had to take drastic lockdown and social distancing measures to flatten and bend the curve. According to research conducted by Mckinsey, several major markets such as India, Russia, Brazil and Mexico are still seeing a rise in the number of cases.
While businesses across the world implement a work-from-home routine to mitigate the economic challenges, few countries are slowly easing the restrictions to restart their economies. However, easing restrictions and rolling back lockdowns can have negative implications. Countries like China and Singapore saw an increase in the number of cases shortly after raising their lockdown. Other countries continue to take precautionary measures and increase testing rates to prevent a second wave of infections. Here are some of the challenges that governments and businesses alike are facing as the global pandemic continues:
- Maintaining effective communication between management and employees.
- Declining employee productivity.
- Transforming the traditional workplace for remote work
- Educating employees and optimising the current systems in place.
- Increasing uncertainty around budgeting
- Estimating revenues and expenses.
- Stressed supply chains and investment pull-back.
The longevity of this virus is still unknown. Governments and businesses find themselves in a situation where they must prepare for the worst. The novel Coronavirus (a.k.a Covid-19) has adversely affected domestic Australian businesses and exports, directly impacting our inventory levels at a time when international supply chains are weakened.
According to research conducted by PwC, this pandemic could reduce Australia’s GDP by approximately $34.2 billion.
Analysts from BAML (Bank of America Merrill Lynch) are predicting that the pandemic will have a permanent impact on the world’s economies, resulting in the undoing of decades of economic growth and development. According to them, the consequences of Covid-19 could be much worse than earlier anticipated. It could potentially change the economic landscape for decades and lead to socio-economic unrests.
While the Covid-19 situation is constantly developing, steps have to be taken to mitigate the threats posed by it. Businesses need to change their marketing strategies and policies to optimise their operations and deal with these economic challenges. Previously, we focused primarily on managing and improving productivity while working remotely. The following points provide an outline for the steps that businesses should take to stay afloat during this crisis:
- First, we recommend organisations conduct an extensive risk assessment and analyse their vulnerability.
- This would show where they currently stand and what steps need to be taken immediately to safeguard themselves.
- A comprehensive risk assessment would prompt a revision of existing policies and strategies. This would result in better implementation of said policies.
- Finally, organisations need to adopt a new method of dealing with events and incidents. Work from home (WFH) could make it difficult for organisations to escalate issues that employees face on a daily basis. Therefore, a detailed report structure highlighting such instances is necessary
Economists are still trying to understand what the future holds for us at the end of this pandemic. In the meantime, making minor revisions to policies might give organisations the tools they need to survive and emerge stronger on the other side.