COVID-19 CRISIS – BRACING FOR THE IMPACT
It’s not new to see a hustle in the board rooms to nail the right strategy for continuous business growth at this time of the year. However, with the worldwide Covid-19 outbreak, most of these discussions are being ruled by ‘cost restructuring strategies’ at the moment. Thanks to the age-old perception of ‘job losses’ being synonyms with ‘cost restructuring’ the clouds of uncertainty have started to appear for many. While handing over pink slips to the employees may look like the easiest way to manage costs in such uncertain times, there can be much more besides that, which the management can opt for.
To start with, a clear identification of essential and non-essential items can be prepared to come up with some actionable points. The efforts can start with Human resource vertical as it has the potential to stop certain spends while still being able to control attrition. The appraisal cycle for example can be postponed for the time being or only designation appraisals can be given with backdated arrears once the market gets back on track. The annual performance-linked bonuses can also be given later. Employees can be incentivized on time and leave instead of money. If necessary, the senior management can take a cut of a few percents in their monthly salaries. R & R (Rewards and Recognition) ceremonies and any kind of celebrations (birthdays, anniversaries, team outings) can be stopped with immediate effect. Some quick actions can be taken on marketing spends too. Instead of any ATL/BTL activity, the focus should remain only on digital marketing. A conscious effort can be made to create content worthy enough to get noticed on its own, without spending much on paid promotions. Organizations can use their existing relationships with each other to settle down for barter marketing techniques wherever possible. Some organizations heavily depend on external agencies for most of their marketing activities or HR-related activities which can be done by the internal teams for the time being.
Besides this, a lot of operating expenditure can be controlled by Admin and IT infra verticals. For example, electricity consumption can be brought down since most employees are working from home nowadays. Even if there is a handful of staff available, only the required number of lights and fans can be used leaving the rest switched off. The use of office stationery can be brought down and if possible reused as well. Any kind of food expense being incurred on cafeteria can be brought down encouraging employees to bring home-cooked food on the days they are working from the office. Any in-person out of office meetings can be called off along with any travel plans bringing down the logistical and travel cost. In the case of sales organizations digital assets like computers, printers, etc can be shared between the sales and support teams. In case the digital assets have been procured on a rented basis, then it is advisable to do away with them for the time being and share the owned assets. Organizations having rented branches can choose to close a few of them and consolidate the staff in bigger owned offices leading to massive cost saving.
The only advantage that India has against this invisible enemy is the learning it has got from the exponential rise of Covid 19 cases in other countries. However, the economic impact is still in the process of being analyzed. Most organizations are at a crucial juncture where they still have time to take the right steps to absorb the sudden economic shock. The coming months might prove to be a litmus test for businesses and only the ones with the right planning will be able to sustain the impact.