No one’s denying it. COVID has been a blow from a personal and business point of view. Many of us have faced unprecedented challenges from personal, family and financial points of view, leaving many of us lacking in motivation.
However, are we looking at the full picture when considering the impact of the coronavirus crisis on businesses? The negative impacts on demand have dominated the headlines, however, let’s flip things on their head. Some businesses have worked to make profit during these challenging times, finding gaps in the markets or adjusting their business models.
Focusing upon the lessons of efficiency and productivity that have been learnt, in spite of the challenges, from the pandemic, provides for some interesting food for thought.
Two major costs bog down businesses of all shapes and sizes;rent and staff. The pandemic has shown how the costs of both can be reduced. Through furlough, a large proportion of staffing costs have been absorbed by the government. Furthermore, the pandemic has shown how a workforce can best ream lined towards only the most indispensable of staff, with tasks previously covered by full-time employees able to be outsourced. As we begin to return to the office, team sizes have reduced, making for more efficient and cost-effective work forces.
As a consequence of these reductions in staff, the in-house size of teams has reduced. Therefore, the old-school, expansive, multi-floor office spaces, that cost companies an arm and a leg to rent out are no longer necessary. Smaller, co-working spaces are cheaper to lease and are better suited to a trimmed-down team. These reductions in rent, combined with fewer staff on the payroll, could push down a business’s two major costs substantially.
Therefore, if businesses can learn from the pandemic and trim the fat on the costs side, could they offset the hits they might face in demand? Perhaps not in the short run. However, in the long run, businesses may learn that bigger is not always better, and that maintaining small, efficient teams in smaller workspaces could be an effective strategy going forwards. As the economy begins to pick up once again post-lockdown, leaner businesses with smaller teams, working out of smaller offices, could begin to see increases in profit, carved out of a reduction in costs.
What do you think?