Financing & Support
The majority of participants indicated that they had received furlough payments into the business within around 6 days of applying. In one instance, an organisation had already received notification of an audit to check the legitimacy of their claim and it is expected that this activity will ramp up in the coming weeks.
Now that the first furlough payments are being received and with the view that the scheme is unsustainable in the long-term, the conversation has moved towards the composition of the workforce post the scheme being accessible. There is a moral/commercial dilemma for many organisations and many will be forced to make difficult decisions based on their cash position.
There continues to be a mixed response on progress with banks. Some participants have had positive and supportive experiences, whilst others have found it challenging to access funds. Though funding is available for businesses, the process is deemed to be cumbersome and many felt it was unlikely that banks will deliver all that has been made available by the government as a result. Others were more optimistic that there would be a progressive increase in support from banks.
FWB Park Brown’s Aberdeen office has been hosting a number of industry specific and functional leadership forums, focused on sharing issues and learnings from Covid-19 and what it means for both the current and future business landscapes.
Whilst the themes and challenges vary between each forum, there are common points and insights throughout.
A full list of upcoming forums can be viewed at the end of this article.
Looking forward, participants questioned whether the government perhaps has a role to play in investing in large scale employers which have a long lead time for recovery, or industries deemed strategic to the country’s operation e.g. public transport.
In the oil & gas sector, many OFS businesses are comfortable around their cash flow for the next few months but have concerns about Q3 and beyond. Many participants highlighted that they have already been contacted by customers attempting to negotiate discount on completed, ongoing and future projects.
Many businesses have found that client engagement and accessibility has been stronger during this period. Some personal barriers that may have existed pre-lockdown have broken down as we get an insight into clients’ home lives.
Decision making is significantly slower across the majority of industries which makes it challenging for the supply chain to forecast ahead. Cancellation and shelving of projects occurred very quickly at the beginning of the lockdown however, there has been an uptake in IT and pre-qualification activities in some markets. Whilst this can be viewed as positive, there are some concerns that clients are taking this opportunity to strike while businesses are potentially fragile or nervous and may be attempting to push down margins.
M&A activity has slowed down considerably however, there are still deals being completed in the oil & gas market. Lockdown is providing an opportunity to shape strategy and restructure the business internally, enabling them to emerge from the crisis in a strong position.
As the government moves towards relaxing certain measures of the lockdown, employees have naturally raised questions, and in some cases concerns, regarding the measures their employers are putting in place to ensure the environment they are returning to is safe.
Communication from employers, particularly the frequency of communication has never been more important. Business leaders are conducting weekly town halls to articulate measures being taken to navigate their businesses through this crisis, as well as how they will phase returning to work, as and when appropriate.
The importance of open and transparent communication is a priority for businesses. Whilst it was acknowledged that they may not be able to alleviate all concerns harboured by employees, articulating the steps being taken, the challenges being encountered and displaying empathy for the uncertain situation people find themselves in, has factored highly on leadership teams agendas.
Return to Work
The majority of organisations are in the process of considering what the return to work looks like, and in many cases businesses offering manufacturing or maintenance related services already have staff back on site. In these instances, procedures are being tightened up daily and HSE communication is frequent.
In the oil & gas sector, participants from the offshore industry discussed variations in operator responses to protocol and testing measures, making it challenging for oilfield service firms to adapt. There appears to be some movement towards a unified approach through involvement from Unions and regulatory bodies.
Office-based professions are unlikely to see a return to the physical workplace for some time, having proved that the capability to work from home exists and productivity remains high. Where a return to the office is necessary, social distancing measures will remain in place and thus, collaborative working may remain challenging. Consideration is largely being given to measures around arrival and departure from the workplace as well as commuting. If working from home is proving effective, the short-term cost of equipment required to set up workplace safety may be deemed unnecessary.
Executives are being challenged to think differently about how the business looks moving forward. It was suggested that many organisations will need to deconstruct their product and service offering, adapting specifically to what their customers want / need in future. The Non-Executive community discussed challenging the core pillars organisations are built upon and, where necessary, encouraging change – in some cases this involved dealing with the somewhat unpalatable however encouraging leaders to think radically was viewed as crucial.
With the focus turning to the return to work, many organisations are starting to consider the future of their workplace and what will be required. It was discussed that the importance of physical offices may diminish and businesses are thinking strategically around other areas and processes they can begin to automate to allow for a more flexible approach to working.
For some organisations with international operations, the impact of restricted travel and related issues has highlighted the need to develop a strong workforce locally and good relationships with local partners. Whilst responding to tenders and pulling together bids has not presented too many challenges, the point at which projects need to be executed in-country may pose issues for those organisations who do not have a strong local presence.
Developments in technology will be sought across many industries, particularly those which have always delivered services using traditional methods. This period has offered the opportunity to reflect on key strategic changes businesses need to make to be able to adapt quickly and thrive in future.
The crisis is shining a light on organisations with strong leadership. Leaders of the future are acquiring new skills with respect to crisis management and resilience and these will be carried forward.
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FWB Park Brown
FWB Park Brown continues to deliver its full range of services which includes providing support and advice during the Covid- 19 Public Health and developing global economic crisis.
We have established a range of cross sector as well as sector focused discussion forums for Chairs, NEDs, CEOs and all the main business management disciplines. We are also working closely with the Scottish HR Leadership Group to provide constructive support including discussion forums and Q & As.
Summaries of the discussions will be posted on our news section and also on LinkedIn.
For further information about any of these forums please contact us via email@example.com