Coronavirus is keeping people on their toes, confronting companies with new operational challenges. Coronavirus is currently the largest threat to the global economy since the financial crisis of 2007 and 2008. Having emergency and crisis management in place and pre-planning multiple scenarios has become indispensable.
The risk of a global recession
The Coronavirus is threatening supply chains and the logistics setup of many companies, which is why it has become unavoidable that there will be a break in the supply chain and production causing longer delivery times. In view of the loss of production, important decisions should be expected in industrial production as well as in the retail trade. Simultaneously consumers have rapidly changed their buying patterns and travels, thus reducing their expenditures for goods and services. The great insecurity is causing a significant drop in the demand for goods and investment activities, which are limited to the bare minimum. It is therefore possible that a global downturn is just around the corner.
Tens of millions of small and medium-sized enterprises were shut down. Given that SMEs generate 80 percent of employment, it is important to understand the toll the novel coronavirus is taking on SMEs, in order to ensure that policy measures are appropriately designed to meet their needs. However, gauging the impact of COVID-19 on SMEs is particularly challenging because these enterprises are plentiful in number but small in
size. Unlike publicly listed firms, information on SMEs is scarce.
SMEs were struggling with many challenges, such as disruptions in logistics, restrictions on labour mobility, and declines in the market order. The major challenges varied by industry. For example, export firms suffered more than others, due to a decline in external demand. SMES in the residential service sector were hit particularly hard because of shrinking demand.
Businesses after a pandemic – Next direction
So after the pandemic, what is the next direction SMEs should take?
Global competition for most businesses is fierce. Therefore, businesses must take advantage of areas they can leverage to improve efficiency and reduce costs. It should be In order to allow more time and human resources to focus on generating revenue. Bringing more efficiency to the daily workflow while also scaling productivity, will become the focus of many businesses in the future. Working with an experienced outsourcing provider helps companies overcome productivity challenges, streamline operations and add additional resources that may be lacking in-house. From sales to recruitment to operations, outsourcing provides an unlimited amount of opportunities to help your business work smarter.
Advances in technology have helped forward-looking companies to benefit significantly from outsourcing services. This is particularly relevant for small to medium-size companies, which simply lack focusing on cross-functional departments such as finance and accounting.
There are one-time opportunities emerging from the disruption of the pandemic, therefore it is vital for businesses to re assess their strategies and the way they operate. Through outsourcing, businesses can create a pool of additional funds, by avoiding expenses from non-core activities. This helps them to enable opportunities for growth and innovation. The outsourcing model reduces expenses by eliminating the need to hire or train new employees. It also helps to increase occupancy costs and investment in additional office space and equipment. Having a large pool of outsourced “on-demand” talent means companies can rapidly scale up their workforce. These companies do not need to hire additional full-time employees and increase their overheads and their investment in office space and equipment. Using outsourcing creates new opportunities and makes better use of existing talent that helps employers get the most out of their current workforce.
How outsourcing can help sustain businesses in crisis?
In an attempt to develop greater business agility and resilience, companies are increasingly looking to reduce the Covid-19 risk through outsourcing. Almost (28%) of UK companies are looking to outsource at least one business area following the Covid-19 crisis. Now let’s discuss the three major benefits of outsourcing to businesses going through a financial crisis.
1) Reduction of costs
The impact of COVID-19 has proven that many workers don’t physically need to be in the office to work effectively — the same goes for outsourced workers or entire departments. Outsourcing the accounting function reduces payroll costs while adding highly qualified experts with a deep pool of resources, especially in times of crisis and uncertainty. Outsourcing can also mean less stress for business leaders over employee turnover or potential layoffs.
2) Security and efficiency in a virtual workforce
With many employees working from home for the foreseeable future, businesses are forced to quickly implement technology and solutions that will help them adapt to these new circumstances. In this virtual age, migrating an organization to cloud-based software allows business leaders and employees to have secure, remote access without any hassles.
3) Increased depth of knowledge and resources
Outsourcing firms come with expertise and domain knowledge in a particular area. It helps clients to deploy additional resources to hire employees and train them. Outsourcing companies are specialized in their domain which brings a competitive edge for their clients.