COVID Impact n Business Continuity
Nearly 54% of Canadian businesses have reported a drop in sales, and an additional 28% have had to temporarily shut down operations altogether, due to the impact of the current pandemic, thereby, impacting their business continuity. Also, only 29% of Canadian companies have a pandemic business continuity plan in place. We have provided below a detailed overview of the impact of COVID-19 on business continuity in Canada.
COVID Impact on Canadian Business Continuity
Many Businesses Still Feel Unprepared to Open
- According to a Salesforce survey of Canadian businesses, nearly 30% of the businesses stated that they do not feel prepared to open and continue their businesses during the pandemic. One of the top reasons for the same is that almost half (44%) of the businesses don't have a health and safety work plan in place.
- Additionally, nearly 25% of Canadian businesses lack a clear vision and don't know where to start when it comes to reopening and continuing their business. Also, the lack of sound technology during COVID-19 is hampering the business continuity of many Canadian businesses.
- As per the above-mentioned Salesforce survey, almost 20% of Canadian businesses have been unable to adapt to today's environment due to the lack of the right technology in place. On the contrary, nearly 60% of the businesses felt prepared to reopen and continue their operations during the pandemic because they were able to leverage technology to quickly pivot and adapt to the current situation.
- Due to the impact of the COVID-19 pandemic, 76% of Canadian businesses feel a sense of urgency to implement the right technology to help their business continuity in the future. Nearly 83% of businesses agree that technology has allowed them to sustain and continue their business operations in the current slowdown.
- As per a survey by Citrix, 61% of Canadian IT leaders mentioned that they are accelerating their move to the cloud as a result of the pandemic. Also, only 29% of companies have a pandemic business continuity plan in place.
- According to a survey by Statistics Canada and the Canadian Chamber of Commerce, due to the impact of COVID-19 on their finances, nearly 40% of Canadian businesses feel that they would not be able to sustain and continue their business operations for more than three months even if they decide to open.
- Also, despite substantial aid from the government, many Canadian businesses, given their depleted finances due to the low consumer demand during the pandemic, are worried about the impact of debt and taxes on the continuity of their business operations, and hence feel jittery to reopen.
Impact on Financial Resources Hampering Business Continuity
- According to the data from Statistics Canada and the Canadian Chamber of Commerce, more than 50% of Canadian companies have lost at least 20% of their revenue because of the COVID-19 pandemic. This poses a great challenge to the business continuity of these businesses.
- The data highlights that nearly 32.3% of Canadian businesses have lost 40% of their revenues during the pandemic, and nearly 21.2% of the businesses have witnessed at least a 20% impact on their sales. In aggregate, more than 80% of businesses across the country have reported a "medium to high drop in demand for their products or services."
- As a result of reduced business operations and revenue, the companies across Canada are cutting down on staff salaries and employee count to continue their business operations. As per data from Statistics Canada, nearly 38.1% of Canadian organizations have cut down upon employee working hours or shifts, nearly 13.4% of companies have reduced employee salaries or wages, and 40.5% of companies have laid off employees as part of their business continuity efforts.
- Among other measures, nearly 34% of business owners are reducing operating expenses, 29% are dipping into savings, and nearly 15% are applying for more credit to sustain themselves and continue their business.
- Additionally, many companies have made on the fly adjustments to their business processes to minimize the impact of the pandemic and continue their business operations. Nearly 20% of the businesses have changed their production process to stay open during the pandemic, and more than 40% have started to adapt to work from home culture for their employees. Consequently, 60% of companies are hopeful that they will be able to get back to normal within one month of physical distancing measures being removed.
- According to a CIBC study, COVID-19 has negatively impacted the business operations of nearly 81% of Canadian small business owners, and almost 32% among them are worried about the viability and continuity of their business over the next year.
- The impact on revenues is more pronounced in the case of small businesses. Nearly 60% of small businesses with 1 to 4 employees and about 56% of those with 5 to 19 employees have reported a 20% or more YoY decline in their Q1'20 revenue.
- To tackle the impact of the same and maintain continuity of their business operations, 47% of small businesses with 5 to 19 employees that laid off at least one employee, have laid off 80% or more of their staff, and nearly 40% of them have requested credit from a financial institution. Also, 22% of small businesses with 5 to 19 employees and nearly 23% of businesses with 20 to 99 employees have had their rent deferred.
Work Refusals & Poor Employee Mental Health Hampering Business Continuity
- As per a survey by Teladoc, nearly 50% of Canadian employees feel that their mental health has been negatively impacted by the current pandemic. Poor employee mental health hampers employee productivity, thereby impacting smooth business operations and business continuity.
- Also, 52% of Canadian employees aged 18-34 and 37% of those aged 65 or older have reported a negative impact on their mental health due to the current pandemic.
- Realizing the significance of employee mental health for business continuity, 39% of Canadian employers are taking actions to support the mental health of their employees, and have added workplace mental health resources and have opened a dialogue around workplace mental health. Some employers have also waived fees for mental health support of their employees.
- Additionally, the issue of work refusals can have a serious impact on the continuity of Canadian businesses. According to Mondaq, due to concerns about the COVID-19 pandemic generally, workplaces that are reopening may see an increase in COVID-19-related work refusals. As per a survey by Citrix, nearly 77% of Canadian IT leaders believe that employees won't return to office as normal after COVID-19.
- According to a survey by Morneau Shepell, 27% of Canadian employees feel that employers should provide clear guidance on how to prevent spreading or getting the virus, and 23% feel that employers should provide support to deal with mental anxiety. The survey also indicates that the level of mental health support an employer provides to its employees has an impact on its business operations and continuity.