We hit the 1st of the year 2020 with so much excitement, others even referring to 2020 as “year twenty plenty”. Not knowing that in a month’s time we would be hit with the sad news of the country being in a recession
As a small business owner, this raised major concerns about growth or rather survival, especially in the midst of the SOE challenges, budget speech and other economic-related challenges.
As a result of these economic challenges, some of the companies have started implementing measures short of retrenchments i.e. short time, to manage the impact of the economic recession. Then there were talks about the 4IR, which meant that everyone has to not only know about it but adapt to it as well.
At least, we or rather, I saw/see good things coming with the 4IR, which gave me hope. Then boom…COVID-19!
Just like any change, the first reaction is shock and denial until it hits home. Then the government put us at ease saying we shouldn’t panic, the country is ready to address the matter. We trusted and still trusting, but the numbers and the impact are of great concern.
What does this mean for a small business owner or an employee?
Following the WHO confirming the coronavirus as a global pandemic, and the SA President’s speech last Monday, we have seen an increase in the number of people not going to work or working from home.
This, to an ordinary person or a small business owner, translates to less production meaning less revenue for clients whom we are dependent on for projects and income. It also means that the operating costs will go up as they will have to continue paying labour costs (due to the permanently employed
workforce) as well as machinery that is idling in their operations.
For a small business owner, this means projects have been canned or cancelled, thereby having a major impact on income which might threaten survival later on
A small business owner will be forced to tap into their reserves/ savings to keep the business going, but no one can vouch how long the reserves may last. Even when the country and businesses move towards normalcy, there is no guarantee that there will be opportunities for small businesses.
Corporates will have to recover from the shutdown/ partial closure period by considering various options such as cutting down on consultants, contractors, etc. This is understandable as a means short of
retrenchment, but painful for a small business owner.
Only those small businesses in the ICT industry might experience growth in this period, as this calls for better systems and innovative ways to carry on with business whilst employees are at home. Small businesses in the ICT industry will be able to jump on this opportunity and provide such solutions.
The main hope for small businesses might be government projects, but we cannot put all our eggs in that basket as there is no guarantee.
However, this doesn’t stop us from pursuing our goals and trying things that move us out of our comfort zones
There are opportunities outside SA, within Africa where the economy is not as bad. We just hope that
the impact of COVID-19 will not be as bad or too long. We have an amazing country with outstanding opportunities for small businesses.
In general, my take on this is that corporates, and everyone for that matter, has no choice but to adapt to the 4IR. COVID-19 is fast-tracking this
Think of how organizations are now forced to have systems that accommodate a virtual working style, flexible working environment, different employee engagement practices, a different leadership style,
different culture, etc.
Another throw to it would be…do employees have to be permanently employed or can they choose to be contract employees?
Although we see a positive push towards the 4IR, some employers saw themselves having to allow employees to work from home without having fully prepared for it
This says a lot about how concerned those employers are about the wellbeing of their employees. They
might not have all the systems in place, but need to be applauded for their investment in their employees and families’ wellbeing. This talks to diversity and inclusion.
As mentioned above, these employers will have to find every possible way to minimize the impact of low
efficiencies and high operating costs when things move towards normalcy. This is not easy. Hopefully, this will not lead to more retrenchments.
Another aspect that is ignored is the impact of COVID-19 for domestic workers in rural areas and townships
I’m one of the fortunate people to have grown up with organic food in the rural areas, however, there is a shortage of water in some of these areas. And a significant number of people in these areas might be household assistants in urban areas. We are approaching a big holiday (Easter) that normally sees us going back home to visit our families.
With the limited income that might not make it possible to test for COVID-19, what happens if one goes home and infects the entire village where there’s not adequate water to take the precautionary measures we all hear about?
Are the rural clinics well equipped to deal with this pandemic? Does everyone have access to clinics or medical assistance? Is everyone in the rural areas aware of the virus and what it does? How does one quarantine themselves in that environment?
Thinking of the squatter camps, people might be aware of the virus and what to do, but how does one quarantine him/herself in that environment? And what is the impact on fellow employees, as we know that a significant number of our workforce is from that environment?
For an employer, this means more investment in employee wellness initiatives and programs, ensuring that employees belong to a medical aid etc.
As I was driving through my neighborhood this morning, the streets were dead, it felt like a Sunday or a holiday. And just as I was thinking that the country was heading towards a mini shut down, when I came back home I saw the good news about China having contained the virus, meaning that “not all is doom and gloom”.
We will pull through as a country as we always do, but the question is “how big is the impact, and how long will it last”? What measures does the government have in place to minimize the impact?