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Will the coronavirus permanently change business?

At very least a new normal can be expected.
The virus could break down mental barriers … employers previously reluctant to allow staff to work from home may now come to appreciate the benefits. Image: Shutterstock

The economic impact of Covid-19 has been starkly apparent. Pictures of deserted streets in major cities like Paris, Madrid and Rome have been an eerie illustration of how far activity has been curtailed.

And now South Africa will join those countries in lockdown.

Read: Italy’s nightmare offers a chilling preview of what’s coming

Across the world, airlines have drastically reduced flights, factories have closed, and bars and restaurants have been empty.

“Basically, we have a forced shutdown,” says Peter Brooke, head of MacroSolutions at the Old Mutual Investment Group.

However, it is important to appreciate that this won’t last forever.

“I do think it’s very hard to look forward, and it’s very scary where we are now, but realistically the world will keep on turning,” Brooke says.

Read: How the economy could emerge stronger from Covid-19

It is also true that economic activity hasn’t stopped completely, even in those countries where citizens have been forced to stay indoors. Many people are still able to work from home, and goods and services are being delivered in new ways, often using the internet.

Change is coming

Essentially companies and customers are being forced to explore new ways to do business, and ironically they may discover that these options are better.

“I think the process that most companies are going through now will have lasting effects on how business is done,” says Kevin Lings, chief economist at Stanlib. “I think there is a lot of learning going on.”

In many cases, this means making better use of technology that has actually already been available for some time. Online shopping in South Africa is an obvious example.

“People will spend more time shopping online,” says Jonathan Smit, MD of PayFast. “The long-term effect is that they will become accustomed to browsing and buying online, and not visiting physical stores as often.

“If businesses can provide customers with a positive online experience, the short-term losses that brands may experience now could lead to their long-term gain,” Smit says.

This will also extend to other areas in business like secure sharing of information electronically, or making use of online conferencing because people can’t travel to meetings. This could lead to both cost-savings and reducing a company’s carbon footprint by limiting air travel.

“These options have been around and explored, but I don’t think they have really gained traction in the way you would have envisaged from a cost perspective,” says Lings.

“But this is forcing people to use this technology more fully, and I think you are going to find there is quite a big shake-up in companies as to which systems they use, and how they can be utilised.”

There is also the opportunity for small businesses and other organisations to come up with innovative ways of doing things that are usually done face to face. For instance, giving gym or yoga classes through online platforms, which vastly extends their reach, and therefore the potential revenue. The National Arts Festival has already announced that the event will be “completely virtual” this year.

“People are becoming a bit more creative about how they are doing things now because they are worried about the virus spreading, and maybe some of these things will stick,” says Sanisha Packirisamy, economist at Momentum Investments.

“Once the virus has died down maybe this will be an option for people who can’t get transport to a class, or who are maybe even in a different geography and still want to log in and participate.”

Remote control

A particularly significant change may come from the fact that this is the first time that companies will have their staff work entirely from home for an extended period. It may well lead to the realisation that this is better for everybody.

“There are a number of reports globally that the average worker would accept lower pay for the flexibility of being able to work from home,” Packirisamy says. “That’s because they get a better quality of life, less disruption in their daily lives, and they don’t have to commute.”

Studies also show that people who work from home are likely to be more productive.

“They don’t take as much sick leave, go for fewer breaks, and are more productive during the time they would otherwise be trying to get to work,” Packirisamy explains.

The additional benefit to companies is that they would require less office space and will be able to reduce the associated expenses. Economies on the whole would gain from lower congestion and reduced carbon emissions from people travelling to the office.

In South Africa, however, there is still a stigma attached to allowing people to work remotely. Managers tend to believe that employees will only be productive in the office.

“It almost seems that there is a bit of a trust deficit between management and employees on this,” says Packirisamy.

“That seems to be a bit of a mental barrier. But with people being forced to work from home now, that might help to start breaking this down, and companies will have an opportunity to assess whether employees working from home do add to productivity.”

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Has anybody found the list of what can stay open? There are going to be devastating and permanent impacts if government is stupid about this:

1. Assumedly farms stay open. If not get ready for a different kind of food fight.
2. Food supply chains stretch back widely. Beside all the food inputs, think packaging to pallets to cold stores to seed to fertilizer to all the labor for those.
3. The factories for the ‘essentials’ don’t exist in the cloud. To keep them going requires security, cleaning, repairs.

Can go on and on

I am wondering about this myself.
There are so many grey areas around what can be considered essential services.

Also even if you work within a industry that is considered essential (Like I do) but your role can be done remotely can/should you ask your employer to work remotely?

Interesting times to be alive, albeit scary.

Let’s keep cool heads guys, communication will be made available. Don’t stress yourselves with negative assumptions an speculation. As a loyal member of this forum, I appeal to all of us to use this lock-down period for inspiring and motivating each other… This is one time we have to put aside our negative opinions and share what will keep us going as a country. Let’s not kick each other when we are all down… I fear for my family, I worry about my neighbours. What happens to that homeless person I see every morning sleeping under the Malibongwe N1 highway bridge… I wonder what happened to the man who begs at the corner of Beyers Naude Drive, its been days without seeing him… Surely if you are human there are things that touch your humanity… I would like to say to all of us as South Africans… “LET US SHOW COMPASSION”. This too shall pass and we will get back to our normal individual lives… For now we need each other…Black,coloured, Asian and White… We are all South Africans after all.

Yes to all that has been mentioned here. I have other concerns. If there is an emergency at home e.g. geyser can one call for assistance? What happens to people like garden services? Can one order online and have goods delivered? In Kempton Park we have rows of unemployed on the sides of roads looking for casual work, are they going to be deprived of a chance to earn a living? Doubt if they have emergency funds. Are the police/army corona free? Are they going to practise social distancing?

Traders for banks? Whixh ones?
Farm to table, the whole supply chain really. And home delivery services?
Food delivery from restaurants?
Landlord services for these industries?
Dealing with any tenant issues?

And if people still go to shops,why will 3 weeks not lead to other spreading and just cause it to flare up post lockdown.

So many thoughts… Must just do more breathing exercises…

“No one will be allowed to leave their homes for the 21 days unless under strictly controlled circumstances, including seeking medical care, buying food, medicine or other supplies and collecting social grants.

For homeless people, shelters which meet hygiene standards are being identified, and for those who are unable to self-isolate at home, quarantine sites will be identified.

All shops will be closed for this period except for:

– Pharmacies;

– Laboratories;

– Banks;

– Essential financial and payment services, including the JSE;

– Supermarkets;

– Petrol stations; and

– Healthcare providers

“Companies that are essential to the production and transportation of food, basic goods and medical supplies will remain open,” Ramaphosa said.”

Hope this helps

Worryingly, no mention of private security or armed response industry. They out number police.

If they are not included, everyone in Suburbia with there stock pile of bog roll and bully beef are sitting ducks for criminals.

So much unnecessary panic!

Last night just before 21h00 i went to the shop to buy milk. The store was packed with people hoarding. I actually found this hilarious(I was lucky to have found the last liter of milk i might add)

Take it easy..Christmas has come early..Relax for 21 days, we are a food producing country unlike Israel and other nations who rely on imports, hence their shelves ran empty

There’s enough to go around. If everyone hoards, there won’t be..Don’t be selfish

Remember to check your cupboards for baked beans. You might have 30 cans hidden somewhere from the ‘94 panic

I recall how my mother bought loads of candles back in 94. For many years thereafter we lit candles for any occasion… Sadly the candles didn’t last up to the point when load shedding kicked in!

Interesting read. My daughter runs her business from home. She is a highly accomplished payroll manager and has been operating this way for 10 years. Most of her clients are small businesses. She has a couple of larger businesses, but all in all there is a lack of response from the latter. Why? The answer is, the management prefers someone on site. Old habits die hard. Hoping this experience will open some eyes. I was in America fairly recently and the trend is for people to be working off site for all size enterprises.

Dear Patrick This article of yours is pure rubbish to put it mildly. There is zero work ethic and respect for work in Africa. None.

This will be a test of that belief Lulu. After the CR drone there was commentary from the DA, FF+ and Dawie Roodt ON SABC TV nogal. This in itself, along with acknowledgement of the Oppenheimers and Ruperts donating R1bn each to the small business fund is encouraging, maybe the crisis has unified SA.

Then there is a podcast saying that this assistance will only be for 51% Black owned (read ANC and their chums) owned businesses. I hope it is wrong but we shall see whether SA will pass this test or fail.

As RW Johnson notes from Hemingway (from memory so apologies for any inaccuracy); “how do you go bankrupt, slowly then very quickly”. I hope this is not the “quickly”.

Oh it is, most definitely Paul (how can it not be?)

Some businesses may have considered the work from home idea and this may just push them to do it.

SA Flyer is a top quality publication that closed their head office a while back, they all woke from home and it is still the top mag it was with a head office. The editor moves around the country, 6 months here 6 months there.

May be the way of the future.

Even better would be an improvement in data lines and cost to facilitate this.
It would certainly weed out the office freeloaders.

For one thing it has made everyone an epidemiologist. Yes it will change a lot going forward.
Hopefully there will be lasting change in the financial sector.

There will absolutely change business . My Son (in IT) has been working from home for years now : No Commute : No second Car required : Always in the Office : Far more productive :
His USA Based employer has ONLY remote workers all over the world and have even developed a system which takes care of time differences .
It is Absolutely the future (If we all live to have one ).

We are going about this pandemic arse about face. What we need to do is to identify, isolate and quarantine that very small cross-section of the population most likely to suffer severe or fatal consequences if infected. The vast majority may or may not get infected and may or may not have mild or moderate symptoms, if any at all, but they can continue with a normal, active lifestyle, study, work and keep the economies going. I fully agree with the Governor of Texas – we are sacrificing not only our countries and the entire world economy, and wreaking havoc and destruction from which the world will not recover, with a mindless strategy of lock-downs and shut-downs in an attempt to save a few of us who are essentially at the sunset of our lives. Which of these self-serving, self-centered, geriatric politicians even bothered to ask the rest of us for our view before they embarked on this panic-stricken scramble to save themselves? I would rather stoically face and bear my fate so that there is something left for my children and grandchildren when this virus burns itself out of victims.

I agree with this in principle as far as developed countries are concerned. Waste of time, effort, money to institute lockdowns and also destruction of economies. Rather isolate all 65 year olds and older. Africa however is different. High rates of TB, Aids etc. This is media hype and brainwashing

Thx @Boombang for your comment. I was thinking of writing something in similar lines.

We are sociable animals. I cannot see us all still staying at home after this 3 week lock down. In fact to the contrary. We will be eager to mix again, even if tentatively and responsibly. I don’t see a dramatic change once the pandemic has passed

I would stockpile, without a doubt. The idea is to stay away from people, why on earth would I want to go into a busy shop? That is where all the Corona carries are. For the next 3 days I am stockpiling.

Very sensible comment from almost everyone. Yup, one needs to be practical.

If EVERYONE on the planet could’ve applied strict hygienic discipline (which would be near impossible) i.e. washing hands / not touching face / speak to another 2 meters away / no family huggs or kisses…SEX WITH MASK ON! (don’t forget about the other virus!)….then one would not have needed the economic damage of a lock-down.

Wonder how low the SARS collections / prov tax / VAT would be within the next few months, as SME’s struggle and fail. And yet Govt’s finances are in dire straights already.
There won’t be any other solution but now to go for “prescribed assets” unfortunately, as as sure as hell SARS collections will take a dive.

Going online is not the solution to everything (although it helps). The courier/delivery personnel will nicely spread Coronavirus for us. (DHL operating manual, updated Mar’20: courier places parcel on floor…he takes 1 step back…customer take 1 step forward & sign/pick up parcel…remember to wash hands…courier takes 1 step forward to retrieve delivery-book.You salute…he salute? 😉

Gardening services, plumbing emergencies, etc. Well, thinking to prohgramme a new App designed which can sync which my gardener’s phone, and he can do my gardenwork online from his home. We will soon test the App to see if it works…

Boombang You made my day. In today’s negativity it is difficult to find a person with a positive attitude. I all of a sudden feel positive as far as the situation in the country is concerned. We will succeed.

@ both afewdollarsmore & Bothalyn plus many others…

From where I am sitting and analysing the events of the past week, I have hope in the greater South African leadership…Both business and political. The man in the street, you and I must appreciate the selfless coming together of political parties to rally behind the vision of the president. For business to come up and render their support, should mean a lot in the face of all that’s facing us. As for the two families that have pledged a R1 billion each should leave us ashamed of our negativity around the crisis at hand. I think we can face this calamity together without excluding any part of our society and without judging any one in the process; for the greater good of the whole country… I am proud to be a part of this “rainbow nation” and I believe that the miracle of 1994 was not an illusion but result of a resilient people who can walk side by side when they are called to do so. I defer to the president and his team.

“A particularly significant change may come from the fact that this is the first time that companies will have their staff work entirely from home for an extended period. It may well lead to the realisation that this is better for everybody.”

I am based in Europe and have been working from home for three weeks now. I will never complain having to go in to work again. It is is soul destroying not having anybody around and spending 24/7 in the same space. Your days blur into one and then roll mercilessly into the weekend.

I think the impact will be the exact opposite, workers will see the value in the human interaction that your work brings.

We are allready leading such a dehumanised existence, with a stupid little 5′ x 2′ screen the epicentre of many people social life, dont take the workplace away from us as well.

End of comments.

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