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As talk of reopening businesses starts to take center stage, CFOs around the globe are taking a long-term approach and thinking about how their industry can begin the process and what business will look like after the coronavirus pandemic.
They are most concerned about being able to keep employees safe. In the latest of PWC's COVID-19 CFO Pulse survey (published April 28), 64% of CFOs surveyed ranked workplace safety measures and requirements as their top concern of moving businesses back to "normal" operation. Coming in a close second was reconfiguring work sites to accommodate social distancing (55%). The previous survey dealt with layoffs and the financial impact of the COVID-19 crisis. PwC is conducting the global surveys of finance leaders on a biweekly basis. The next set of results will be released on May 12.
One way companies are trying to safeguard their workers is through automation. Almost half (46%) of CFOs responded that they plan on increasing automation, with 60% of those in Germany and Mexico saying that automation and remote working are among their top three concerns. In addition, 21% are looking at implementing contact tracing when they reopen.
As for when CFOs expect to be able to get back to "business as usual," 49% said they believe that could happen within three months if the crisis ended today. (That number is slightly lower than reported in the previous survey (56%).)
Only 20% said they were worried about insufficient staffing, and 7% even say they are considering restarting employee benefits such as on-site daycare to ease the burden of those who want to return to work but are still faced with closed schools and outside daycare.
Once businesses reopen, some CFOs are concerned about the supply chain, with just over half (52%) responding that they will look to alternate sources. The energy and utilities industry is most concerned with supplier health (60%), followed by the automotive and industrial manufacturing industry (58%).
Globally, a large majority (70%) of CFOs expect a significant impact to their business operations as a result of the coronavirus crisis, however CFOs in Denmark (48%), Switzerland (47%) and Germany (44%) report less concern than the overall average.
From an industry perspective, it comes as no surprise that retailer and consumer based CFOs are most concerned (75%) about the financial impact. Reports that the crisis will almost certainly lead to a recession is top of mind as well (as of mid-April, the International Monetary Fund (IMF) predicted that the global economy would fall 3%, which would be the worst downturn since the Great Depression) — 80% of respondents to the PwC survey said they expect to see a decrease in revenues and profits and report that the looming potential for recession (69%) and the financial impact on operations (67%) are their top concerns.
Cost containment is the most favored action (82%) to try and stem the tide, with capex expenses being the most likely place to start.
Most CFOs however do not see a significant impact on mergers and acquisitions, with just 20% responding that they would change their M&A strategy.
Investments in digital transformations are not expected to be significantly impacted with only 20% of CFOs saying they plan to cancel or defer those investments.
Steve Salkin is a Managing Editor for ALM. He can be reached at [email protected].
