In positive signs for the economy’s recovery, research from IRIS Software Group (IRIS), one of the UK’s largest software companies, have found businesses that prioritised harnessing technology to move to cash free trading and support flexible working while increasing customer communications during lockdown predict a return to pre-pandemic trading levels in just six months.
Overall, of the 1,119 IRIS customers surveyed, businesses remain broadly confident about their ability to bounce back; with some clear trends emerging about the key priorities they need to focus on to return to pre-crisis levels.
Nearly a third (29%) of businesses that moved to cash free trading, increased customer engagement throughout the lockdown (27%) and moved to cloud or hosted systems to support flexible working (26%) predict they will return to pre-pandemic levels by the end of 2020. The move towards digital payments, combined with prioritising engagement through cloud-based systems has enabled many businesses to continue trading throughout the lockdown period, and put them in as strong a position as possible as we enter the next normal.
Elona Mortimer-Zhika, CEO of IRIS Software Group said, “Despite predictions of the worst recession on record, UK businesses are demonstrating clear resilience in adapting successfully to meet the COVID-19 challenge head on.”
The biggest challenge faced by British businesses during the COVID-19 lockdown period was the cancellation or pausing of work from customers and clients – with over half (56%) of respondents citing this as their number one challenge. This was followed by late payment of invoices (32%) and an influx in customer queries and questions (31%).
One in five (19%) respondents cited a lack of clarity around the lockdown rules impacting business results as a key challenge. Supply chain problems and technical software challenges while working from home were also named as barriers to business growth by 19% of respondents.
However, nearly a third of respondents who are now making changes to employee benefits (30%) and tracking key assets more closely (28%) as key priorities also predict they will return to pre-pandemic status within six months.
The research further found that firms taking other proactive steps are anticipating a recovery in under 12 months. Over a quarter (26%) reported focusing on improving employee record keeping and management will help towards a sustainable recovery. While nearly a third (28%) are focused on investing in employee engagement and automated technology to speed up their bounce back within a year.
Mortimer-Zhika added, “As businesses begin to settle into this new normal, they cannot rest on their laurels. The biggest lesson that must be taken from this is that we have to be on our toes now. We can’t pick up where we left off. We must make quick decisions on imperfect data. Uncertainty is around the corner, and businesses must be ready for the next normal.
“Our research shows the impact of the five biggest challenges faced by organisations during the crisis can be controlled. Throwing into sharp relief the necessity for businesses to have as strong a handle on these controllables as much as they can, whether that be their people, commercial contracts, supply chain, cashflow or technology. So if the worst happens, they will be in the best place possible to react. Businesses, regardless of size, need to harness technology to put themselves in the best position to control these controllables and move forward with confidence.”
Interestingly, the UK’s smaller and micro businesses took markedly different actions during the crisis when compared to larger businesses. This has impacted on how confident they now feel moving into the next normal.
Over half (53%) of micro businesses took tax breaks and other relief offered by the government, while less than 10% of medium to large businesses did (11% and 8% respectively). Nearly two in five (39%) small business sought finance from a bank or lender, while less than 10% of medium to large businesses did the same (7% and 5% respectively).
The research further found that 38% of small companies restructured their business during the crisis, while only a quarter of medium and large businesses did the same (25% each).
As a result of these measures taken, only 21% of small businesses and 14% of micro businesses report feeling confident about recovering from the pandemic. In stark contrast, nearly all (84%) of large businesses feel confident about their organisation’s future, given the evolving COVID-19 situation.
While the biggest challenge for large and medium sized businesses lay in managing the transition to home working and employee engagement, it was the micro and small businesses which struggled with paying staff and chasing invoices.