Leaving lockdown ‘won’t be plain sailing’ for business

Covid-19 News | Employment & Skills | Latest News | Surveys

Many companies will only be able to operate at significantly reduced levels under social distancing rules, a new survey from the Institute of Directors reveals today.

The poll of over 800 members of the IoD, the professional institute for company directors, found that businesses will take weeks to get up to speed after lockdown ends.

  • Under social distancing rules, just half (49%) of those surveyed could operate at pre-crisis levels, while more than one in five (22%) would be working at less than half capacity.
  • A majority (53%) of firms would take over a month to return to pre-lockdown activity levels even if lockdown ended entirely and demand returned to normal.
  • 51% of directors polled had started drawing up plans for an eventual relaxation of lockdown measures, but almost a third (30%) were waiting on government guidance.

The IoD stressed that for business to continue to operate, or reopen, directors would need to be confident that acting in accordance with government guidance would keep their employees and customers safe. Directors carry responsibility for health and safety at work, and some may not want to open workplaces if they are not comfortable with the level of legal risks.

With the survey showing that many firms face an uphill struggle to get back to anything like pre-coronavirus levels, the IoD called for the Government to be “innovative and agile” and continue to adapt its support for the economy, including introducing a flexible furlough scheme, which would allow firms to furlough workers for ​a shorter period of time or bring staff back flexibly, while the overall support is tapered.

Jonathan Geldart, Director General of the Institute of Directors, said: “Leaving lockdown, when it happens, won’t be plain sailing for business. Social distancing presents an unprecedented challenge for firms, and some may be simply unable to make it work.

“Organisations that can adapt will take time to start firing on all cylinders, particularly as demand across the economy continues to lag. Businesses may face another cashflow crunch as they spend money on measures to make workplaces safe before revenues return.

“Directors want to be responsible, and protecting their staff and customers is paramount. Guidance which provides a clear framework for operating safely is crucial. Business leaders must work with their people to build trust and understanding around the way forward.

“Directors have significant legal liabilities and they need the confidence that if they do the right thing they won’t be at undue risk. Ultimately, individual business leaders and boards have to exercise their own judgement, as guidance can never predict every scenario. Trying to do so could make it too prescriptive.

“This is a time for innovative and agile policymaking. Many small firms may need support accessing protective equipment to get up and running again. Employers will need flexibility as the furlough scheme is unwound to manage the return to work. The Government must also ensure the debt burden businesses are taking on now doesn’t hold back growth plans in future.”

Full survey results

816 respondents, conducted between 1-6 May 2020

To what extent could your business operate while maintaining social distancing rules?

We could NOT operate viably 6%
We could operate, at less than half pre-lockdown levels 16%
We could operate, at over half pre-lockdown levels 23%
We could operate viably at pre-lockdown levels 49%
Don’t know 2%
Other 3%

Has your (primary) organisation started making business plans for an easing of lockdown measures?

Yes 51%
No, we are waiting for government guidance 30%
No, we are only focussed on other business issues 12%
Don’t know 1%
Not applicable 4%
Other 2%

Assuming demand were to pick up, if the current lockdown measures were lifted altogether, how long do you expect it would take for:

Your organisation to re-start activities Your organisation to return to pre-lockdown activity levels
Under 1 week 33% 9%
1 – 2 weeks 21% 8%
2 – 4 weeks 10% 11%
4 – 8 weeks 6% 11%
8 weeks + 6% 42%
Our activities have not been impacted 23% 11%
Don’t know 1% 7%

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