Coronavirus will Change Companies Forever

Coronavirus will change how companies operate, more remote teams and work from home
Coronavirus

The novel coronavirus a.k.a COVID-19 pandemic is wreaking havoc around the world. It’s not only the biggest health emergency the world has faced since the Spanish Flu (1918-1919) but it’s causing severe economic destruction which is most likely to put the world economy into a depression.

Companies are having to completely rethink the way they do business during this crisis and draw emergency plans for business continuity. Companies which survive this period will need to reinvent the way they operate in a post COVID-19 world. This crisis is already testing the best of companies; just as previous emergencies did. Once the virus is contained and worldwide lockdowns end, a lot would not remain the same.

While few Fortune 100 companies had contingency plans to deal with this crisis most companies have had to adapt in a jiffy. Many companies which have not been able to adjust are facing severe loss of productivity & business. Contracts are being stalled or terminated citing the Force Majeure clause. Already staff are being furloughed or terminated in unprecedented numbers. Even the staff which manage to retain their jobs would face smaller raises & bonuses.

The fact that firms like Citrix and Zoom have seen their shares rise in recent weeks due to the shift to work from home model, also means that more and more companies have come to realize that remote operations even with global teams is possible. Many companies are witnessing that staff working from home can be as productive as usual, while yielding many benefits such as no need to commute, more free time etc. Moreover, due to the long lockdowns many corporations will also come to realize that many staff positions are not necessarily required in a work from home environment.

Even when the mandatory lockdowns end and offices reopen, there is going to be a major shift in how companies operate and how the work force is arranged & managed. In the short term, companies will of course urgently deal with the issue of sanitation at the workplace and staff health. Business travel is going to be curtailed and a lot more meetings are going to be done over video conferencing. Business travelers arriving from higher-risk zones will be asked to prove they are clear of COVID-19 or go under mandatory self-quarantine. Personnel will be encouraged to work from home wherever possible and many staff would actually prefer such an arrangement.

In the long term however, the era of robots and automation (as described in Mark Mills’ excellent business book Work in the age of Robots), which had been dawning for a while now, will probably arrive sooner due to Coronavirus. Those furloughed or terminated employees may not be brought back in the same numbers and many positions may be replaced either by AI driven software or robots in the factory/warehouse environment. Large corporations like Amazon would be leading this shift. Staffing positions will be up for a rethink and non-critical support job functions would be the first to be curtailed.

Corporate real estate sector which relies on renting out offices to companies must be fearing the length of these lockdowns. For the longer it takes, the easier it will be for firms to realize that there is no need for the large offices anymore, and that a smaller setup is what they can manage with to lower costs and facilitate work from home teams. This would translate into more affordable rents and overall cost structure which in a way would be a positive for startups and small businesses looking to rebuild. The high costs of doing business are likely to face downward pressure simply due to the lowering of demand due to many companies going out of business and renegotiation of existing contracts. In times like these, it’s hard to see a positive outcome from this crisis but after a few years once the world has recovered, we will see companies thriving again with a more inclusive and flexible work culture.

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