A recent PwC survey among CFOs and finance directors reveals that 76% of Ireland’s finance directors expect a decrease in their company’s revenues and profits this year as a result of COVID-19 (Global: 80%). Of this, over a quarter (28%) expect this decrease to be 25% or more. Fewer global companies (20%) expect this level of revenue and profit reduction. Despite the pandemic, 15% of Irish companies either expect no impact on revenues and/or profits or expect an increase.
Less than one in five (17%) are ‘very confident’ when it comes to identifying new revenue opportunities when they return to the workplace and is significantly behind global expectations (27%).
Key strategies to rebuild revenue streams, according to the survey, are new, enhanced or repurposed products or services (67%) and changing pricing strategies/payment terms (64%). Irish companies though expect to have a keener focus on pricing strategies compared to global companies (48%). 35% will enter new geographic markets and just 22% will focus on upskilling and acquiring new talent.
More Irish companies than in any other country believe it will take more than a year to recover
According to the survey, more Irish finance directors believe that it will take more than a year to recover from the pandemic than in any other country participating in the survey. Over a quarter (26%) now believe that if COVID-19 were to end today, it would take their business more than a year to get back to ‘business as usual’, up from 17% two months ago and just 11% globally. A further 40% believe it will take between one and six months compared to 50% globally.
New ways set to remain a permanent feature of working
There is evidence to suggest that some aspects of the current situation will make business better in the long run and therefore may be here to stay. Respondents confirmed that these included: greater remote working and work flexibility (78%), better resilience (68%), leaner operations (49%), automation and technology investments (43%) and new ways to serve customers (42%).
The survey confirms that some organisations will look to capture the unanticipated benefits of working through the pandemic and make positive changes to adapt their ways of working. One fifth of respondents reported not having enough people to do critical work, however, the crisis also highlighted some vulnerabilities in the workforce. The survey suggests companies need to focus on strengthening critical skills, building new skill sets for the future and supporting employee well-being and resilience.
Irish businesses ‘very confident’ in providing a safe working environment but not so confident on building and retaining critical skills for the future
A significant proportion of responding Irish finance directors are ‘very confident’ when it comes to their ability to provide a safe working environment (Ireland: 80%; Global: 74%), meeting customers’ safety expectations (Ireland: 83%; Global:79%) and providing a clear response and shut-down protocols if there is a second wave of infection (Ireland: 77%; Global: 71%). But the survey reveals that Irish businesses have more to do when it comes to building and retaining critical skills and they lag global peers. Just one in two (51%) are ‘very confident’ about retaining critical skills (Global: 56%). Less than half (41%) are ‘very confident’ about building skills for the future (Global: 45%) and just 43% are ‘very confident’ when it comes to managing employee well-being (54%).
Working on-site will not be the same with plans accelerating
Irish finance leaders are much more concerned about the impact of the pandemic on their workforce (28%) than global peers (13%).
With lockdown easing, companies are accelerating their plans to be safe as they transition back to on-site working: 88% of respondents now plan to reconfigure work sites to promote physical distancing compared to 76% a month ago; 72% now plan to change workplace safety requirements (wearing masks, offering testing to workers etc), up from 59% last month; and over a quarter (28%) now plan to reduce their real-estate footprint, up from 12% a month ago.
Despite a high level of confidence in safeguarding their people, the top concern with respect to returning to the workplace and operating in a changed business environment, according to the survey, is the possibility of a new wave of COVID-19 infections (67%), higher than global concerns (58%). Other concerns are the impacts of a global economic recession (64%) and financial/profitability impacts (42%).
You can access the full survey results here.