Companies have learned two main lessons from the pandemic. Firstly, how to prosper with staff working outside the office for the first time. Secondly, how to utilize the revolution in working patterns, and other changes accelerated by COVID-19, to maintain better cost controls.
That’s according to the latest Plimsoll Business Mood Survey, the biannual confidence survey of thousands of business leaders at some of the UK’s most dynamic companies. We asked key stakeholders across thousands of industries the following questions:
Question 1 – Have you gained or lost ground during COVID-19?
As the results show, two-thirds of companies are bouncing back strongly from the pandemic. Two-thirds of companies have seen sales increase and the same have seen strong recoveries in their profit margin. The companies that have not seen their performance recover, particularly profitability, will need to find margins quickly as inflation continues to bite.
As a result of this strong recovery, the number of people being employed and hiring intentions remain strong. Just over half of respondents said they were looking to hire more staff. Another quarter of respondents have retained the same people throughout the pandemic. Only a narrow 17% of companies have seen their headcount fall.
Finally, the number of companies intending to make an acquisition has increased slightly to 24% of companies. With such a rush to make up for lost time, how many poor deals will be made throughout 2022?
Question 2 – How is your business strength compared to 2 years ago?
Maintaining corporate financial strength throughout the pandemic has been a challenge few will forget, nor wish to repeat. From markets that were completely shut down to those that have seen supply chains collapse, companies have battled unprecedented disruption for more than 2 years.
Across the UK, GDP dipped a historic 9.7% throughout the first year of the COVID-19 crisis but has rebounded sharply as the economy has reopened. This is reflected in Plimsoll’s latest survey. 73% of companies surveyed responded that their company performance is much healthier than it was 2 years ago.
Only 1 in 10 respondents said that their financial strength had diminished post-pandemic. Were these companies riding the PPE / home-based demand boom that has since dissipated? Have there been shifts in customer behaviour, accelerated by the pandemic? Whatever the reason for the fall in financial strength, their business model may need to adjust to the new normal. The prevailing geopolitical and economic winds are yet to settle and they could be vulnerable.
Question 3 – What is the biggest lesson you have learned during COVID-19?
There isn’t a business around that can claim lessons that haven’t been learned over the past two years. However, most companies have focused on two key lessons that should stand them in good stead for the future of business.
21% of companies felt that adopting a flexible working culture has been their biggest lesson. Whether hybrid or remote models, dynamic, forward-thinking companies have learned that the results achieved are more important than where their staff achieve them. With such a scarcity of qualified staff, companies refusing to learn and adapt to new working patterns face the real prospect of low staff retention rates and, as a result, further compromises in corporate success.
The second most popular lesson has been the need for stricter cost control. Homeworking removes the need for expensive premises. Video conferencing replaces costly business travel. COVID-19 brought about decades worth of change in how businesses operate in just months. Success will be directly linked to how that change is absorbed and understood. Business leaders stubbornly wedded to old, pre-pandemic ways of working face being left behind over the next 18 months.
The ”other” responses we received to this question were much more narrative but often an expansion on these core themes. Many said “all of the above”. However, the overriding theme of the feedback we received was that the pandemic has changed how to run a business and left companies doing things they would need to have countenanced in three years ago.
To summarise the findings of Plimsoll’s latest Business Mood Survey, it’s a reassuringly positive tone. Most companies are feeling the benefits of the recovery or have been wholly unaffected by the pandemic. Many are confident in the health of their business. More dynamic leaders are using the innovations that have crept into all aspects of life since the pandemic to become leaner, more results focussed and more cost-conscious.
None of us saw COVID-19 coming. However, it has laid bare the need to be prepared for any eventuality when running a business. To have enough in reserve to weather the worst-case scenario. To continuously challenge your beliefs and your business strategy. To maintain a monitor on the financial health of your business and its position among key rivals.
Plimsoll offers the business analysis tools busy managers, owners and key stakeholders need to develop new insights into their performance. We provide valuation services, performance monitoring and benchmarking tools and the ability to distil large swathes of financial data into decision-ready analysis. Why take months wading through financial documents when you can have insight and intelligence in minutes?
Visit www.plimsoll.co.uk to find out more about our products and services.