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THE BUSINESS REACTION TO COVID – How are South African organisations really responding?

There has been much speculation about the impact of Covid on business. Rather than listening to assumptions, Mindworx, the South African digital consulting and talent agency, surveyed its extensive client base to assess the real on-the-ground reaction. Comprised mostly of large companies and public sector organisations with a sprinkling of SMEs, the respondents represent a wide range of sectors. Here’s how they view business as a result of the pandemic.

Asked what they thought recovery would look like, 55% saw a U-shaped curve; an extended period of recovery with previous growth levels only achieved when Covid is under control. However, 20% saw an L-shaped curve, expecting slow long-term recovery and little faith in a return to previous profitability and growth levels.

For almost two-thirds of clients (59%), more than 80% of their staff have worked remotely since the hard lockdown, with 66% intending to return in the first quarter of 2021. The balance is either unsure or will not return to the office. But there is another aspect to the question of location, as explained by Jonah Naidoo, CEO of Mindworx: ‘In August most of our clients said their people were going to continue working from home, but by October more companies said they wanted a hybrid model.’

He says that with a possible second wave of the pandemic on the horizon, clients are now considering a Q2-2021 return to the office, if at all.

Given the uncertainty of the economy, permanent recruitment has slowed notably. Executive search for senior executive talent continued only if it had already started pre-lockdown or when critical skills were needed. With so much uncertainty about the future, few companies have the appetite to hire for anything other than critical roles.

Said Naidoo: ‘Many clients indicated they would use contractors, but the reality is that gaps are filled by existing staff taking on additional duties. As a result, there are fewer new job opportunities. Inevitably, many companies are restructuring – resizing or downsizing – to reduce costs and get more value for their HR spend.’

Self-employment is set to grow as formal employment declines, especially as companies can no longer afford to employ specialists permanently. Eighty five percent of respondents said they could benefit from hiring gig workers for skills that are not available through conventional employment.

Among mature global companies there is a thriving gig economy for scarce and project roles, but this is not as widespread in South Africa as yet. According to Naidoo, this flexible labour model could best serve our country’s unemployment crisis and we should expect to see the use of freelancers and short-term contractors grow rapidly.

‘Work from home has been an important catalyst for digital transformation,’ he said. ‘Our clients report that 85% of their staff had adapted well to new technology and this is echoed by Microsoft CEO, Satya Nadella, who said in April that we’d seen two years’ worth of digital transformation in two months. Our research certainly bears this out.’

Naidoo continues: ‘Reskilling is more effective and efficient than recruiting, and there’s a great opportunity now to digitally transform organisations in South Africa.’

Given the massive change in the way people work and the increased requirement to make every rand count, the need for integrated people analytics has been fast-tracked. A data-driven approach to better understand the people in a business will help increase staff engagement and improve performance and efficiency. This trend will assist companies in their migration to new ways of working.

This year’s backlog in skills development spend will impact the talent pipeline for several years and could negatively affect B-BBEE scorecards in 2021 but, says Naidoo, this creates the opening for employees to learn new skills. ‘Employers now need to think beyond their norms, reorganise their people and their thinking on how the teams they have can be trained to do the work that needs to be done in this increasingly digital world we now inhabit.’

As Nelson Mandela Bay faces enhanced lockdown restrictions with other parts of the Eastern and Western Cape at risk of following suit, the whole country needs to be on alert and do what it can to avoid an imminent second wave of the pandemic. Business owners and managers would do well to take note of these results collected during the peak of the first wave and make the necessary plans and adjustments now.

Download the full report here 

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