61pc of Irish companies are considering how to make remote working a permanent option for staff who can avail of it.
The latest PwC Pulse survey – a fortnightly poll of 871 global financial leaders including Ireland – found that nearly half of Irish finance leaders (47pc) believe their businesses could return to normal within three months if the Covid-19 pandemic were to end today; while 88pc remain greatly concerned about the potential impact of the crisis.
It found that Irish companies are considering when and how to reopen work sites: 59pc plan to change safety measures and requirements, while 61pc are considering how to make remote working a permanent option for those staff who can avail of it; 76pc will reconfigure work sites to promote physical distancing.
“It is simply essential that companies continue to scenario plan for the ‘new norm’, however this will look”
“The survey shows that most companies have moved beyond the short-term, reactive phase of the novel coronavirus pandemic,” said Garrett Cronin, Consulting partner at PwC Ireland.
“While they remain focused on what they need to do, what it takes to ensure the safety of their people and the survival of their businesses, they are also thinking about how to stabilise. They are taking tactical steps that will prepare them to operate in ‘the new normal.’
“There is no doubt that technology will play an even more important role in how we work in the future and digital transformation is an important area that should not be scaled back if possible. We need more digital, not less.”
Has the working world changed forever?
In Ireland, according to the survey, there is an Increase in concern about the impact of the pandemic on the workforce, up nearly 20pc, though a major decrease in productivity concerns due to lack of remote working capabilities.
Despite this, over a third (37pc) of Irish respondents are planning to scale back digital transformation rather than increase it, double that of global counterparts (18pc).
Just over a quarter (29pc) of Irish CFOs now expect productivity losses due to lack of remote working capabilities.
This view has more than halved compared to two weeks ago (61pc) – likely due to the fact that employees and employers may be adjusting to remote working.
Nearly half (46pc) expect temporary furloughs in the month ahead, up from 39pc two weeks ago. Over one in five (22pc) now expect layoffs in the month ahead, down from 26pc two weeks ago.
Almost half (47pc) of Irish CFOs still expect to return to ‘business as usual’ within three months if the pandemic were to end now compared to 44pc two weeks ago (Global: 49pc). At the same time, more than a fifth (22pc) expect this to take more than a year, up from 17pc two weeks ago and is substantially higher than for their global peers (8pc).
Hardline view on finances
Irish CFOs are continuing to take a more hardline view compared to global counterparts on the potential impact of the pandemic on their businesses. 88pc remain greatly concerned about the impact of the crisis on their businesses (Global: 70pc).
An overwhelming majority (98pc) expect a decrease in revenues or profits this year as a result of COVID-19 (Global: 80pc). Nearly half (44pc) are concerned about the impact on their workforce, up from 26pc two weeks ago.
The survey highlights that changes in supply chain strategies are on the cards with Irish finance leaders hungrier to implement more stringent risk protection measures. Over four out of ten (44pc) Irish CFOs stated that they are developing additional alternate sourcing options (Global:52pc) while a similar proportion (41pc) will seek to improve risk protection measures such as disaster insurance coverage, more flexible force majeure contract clauses (Global: 32pc). Over half (54pc) will look to understand the financial health of their suppliers (Global 50pc).
The survey reveals a jump in implementing cost reductions (up from 78pc to 95pc) and deferring or cancelling planned investments (up from 61pc to 73pc) compared to two weeks ago. This scaling back is also more severe in Ireland compared to global counterparts.
Facilities and general capital expenditure are top on the list for deferment or cancellation (73pc). Other key areas for deferment/cancellation include workforce (57pc) and operations (37pc). In addition, over a third (37pc) are planning to scale back digital transformation, double that of global counterparts (18pc).
“It is simply essential that companies continue to scenario plan for the ‘new norm’, however this will look,” said David McGee, Markets & Strategy Leader, PwC Ireland.
“To protect our future, Government and business need to continue to work together now to map out how to safely reopen our economy, while balancing the essential health protections we will continue to need for the foreseeable future.”
Written by John Kennedy (john.kennedy3@boi.com)
Published: 1 May, 2020
