Fatihah Ramzi | 30 December 2021
The arrival of Omicron has left the world economy on pins and needles. What efforts can businesses take to mitigate the damage and maintain everyday operations functioning at near-full capacity?
The arrival of omicron has left the world economy on pins and needles, as they try to make sense of the scant, frequently contradicting information on the new COVID-19 version. Omicron has put the entire world on high alert, and businesses are scrambling to devise methods to mitigate its potential workplace effects.
Despite the fact that much about the new version remains unknown, Dr. David Levy, CEO of the preventive health organization EHE, stated that efforts to restrict the virus and its variants have been consistent throughout the COVID-19 epidemic. Getting the vaccine, using a mask indoors, and social distance in high-transmission regions, as well as getting tested on a regular basis, are all part of these attempts to prevent the infection from spreading to others. But, aside from these, what efforts can businesses take to mitigate the damage and maintain everyday operations functioning at near-full capacity?
1. Virtualising Organisation
Given the fast changes your workers may undergo on a daily basis, the new omicron variation necessitates a focus on their health and well-being, as well as that of their families. It’s critical to virtualize back-office and other activities as soon as possible for worker safety. First and foremost, CFOs must have a plan in place in the event that key personnel become unwell. CFOs should evaluate how the line of command and power will move among their staff employees if executives and others are inaccessible for important decisions and critical duties.
Second, CFOs will have to help finance and other activities become more virtualized. CFOs should think about how they might help their employees connect online and improve overall employee participation. Workplace virtualization has the potential to erode traditional sources of job satisfaction. Furthermore, virtual exchanges on ambiguous matters, which are generally best addressed in person, will be required. In a virtual work environment, where visual as well as other social interaction indicators may not be clear, caution must be exercised to minimize misinterpretations.
Thirdly, allocate crucial resources and financing for virtualisation to IT. Many businesses lack the infrastructure to provide full virtual accessibility to vital data and systems. CFOs should collaborate with their CIOs to support critical remote access to important systems and data while ensuring data security. Staff will very certainly require remote support and training to assist them in adapting to the new systems and practices.
Finally, CFOs must keep infection risks to a minimum for on-site employees. Some employees, particularly those working in production and operations, will be unable to work from home. To permit social separation, safe handling of materials, and effective disinfection of the office, this restriction will necessitate new ways of managing the workspace. CFOs can play an important role in determining the resources that will be required to restructure their firms’ workplaces.
2. Bolstering Liquidity
CFOs’ first objective is to guarantee that their company has adequate cash and liquidity to operate. Given reductions in global stock prices, economic uncertainty, and difficulty in estimating results, the cost of financing has increased in over the last few weeks, and fresh stock issuance through public markets are becoming unappealing. CFOs should rethink their strategies to acquire and manage liquidity, as well as handle their financing and credit rating relationships, in this environment. Finance and liquidity can be revisited by CFOs to revise their present grasp of debt arrangements, assess potential financial covenant breaches, and more. CFOs will be able to anticipate any potential concerns as a result of this.
3. Managing Risk
Risk management and stewardship will be a priority for CFOs. Cyberattacks, internal control systems, and supplier breakdowns are some of the direct hazards you’ll have to deal with. Companies may become more susceptible to cyber threats when they virtualize their workforce. The significance of vigilance and expenditure in cybersecurity will keep rising.
Due to strained, disengaged, or unwell employees, firms may become increasingly prone to internal control breaches as layoffs and cost reductions occur. Fraud should be a top priority for CFOs, as it may add a lot of money to the bottom line. We can expect more supply or receivables disruptions with the new variant. These risks can be mitigated by diversifying and securing suppliers, as well as monitoring client payments. Third-party risk management is still important.
4. Recovery Plan
With the advent of the new version, it is impossible to predict when the economy will return to normal; however, it is never too early to consider your company’s future plans. Because of the social distance that characterizes this crisis, CFOs should explore experimenting with different recovery models to see which markets and segments will return first. CFOs should concentrate on digital transformation and addressing critical talent shortages.
Before the epidemic, many companies were already working on digital transformation projects. Maintaining efforts to virtualize the workplace and processes may help firms better meet future needs, given the virtualization of work and its potential for continuous use.
Layoffs, cutbacks, and retrenchment are common during economic downturns and recessions. During a downturn, you can attract essential talents from other firms and institutions that are deleveraging and forced to downsize. Over the next few years, institutions and experienced-hire recruitment companies may provide more qualified applicants at reduced prices.
As the impact of COVID-19 intensifies globally along with the new variant, Omicron, CFOs must take these steps to help manage their teams and communicate effectively during these challenging and uncertain times.