How Businesses Adapted in 2020
2020 was a year like no other. While there were many challenges, there were also many opportunities. Read on to find out how businesses responded to the unique events of 2020.
Uncertainty has plagued businesses in 2020. The social and economical impacts of the COVID-19 pandemic have been monumental. The back and forth fluctuation in government restrictions across the country has forced businesses to adjust quickly in order to stay profitable. In addition, 2020 saw Australia enter its first recession in 30 years, an indication of the direness of the economy. This article will summarise some key business statistics as well as strategies used by businesses to adapt over the past year.
Reduction in Employees and Trade
The effects of the pandemic reduced the amount of employees as well as the invoices issued by businesses. Many traders suffered following restrictions imposed by the government. Arts, accommodation and information media services were the three largest industries to report a decrease in employees since 1 March 2020.
Government measures such as JobKeeper have somewhat helped to cushion the blow. For example, the arts and recreation services industry reported an employee reduction of over 20%. This figure may have been significantly higher without the JobKeeper scheme. Find further information about the figures here.
Modifying Business Operations
In a telephone survey conducted by the Australian Bureau of Statistics (ABS) in June 2020, businesses responded to how they made changes to business operations in response to COVID-19. These changes include:
Changing the offering of products or services
40% of businesses in the survey indicated they had changed the way they offered their products or services. 20% of these businesses intend to keep these changes long-term. The shifting of many small businesses to online sales is an obvious example of this. Delivery on an ad hoc basis can occur online. This in in addition to the minimisation of risk in contracting COVID-19. Compliance with social distancing laws was essential for those trading face to face. This impacted the physical layout of many businesses and the way they delivered their product/service.
Changing operating hours
31% of respondents changed their operating hours due to the pandemic. However, only 10% intend for it to be a long-term change. The lack of face to face contact has meant that many physical business premises’ have reduced their hours. With less traffic in store, changing the operating hours provides a cost saving measure for some businesses. Alternatively, some businesses have opted to deliver their products rather than having set operating hours of business.
Changing staff roles or duties
25% responded that staff roles or duties within their businesses have changed, with 15% of these changes intended to be permanent. Businesses have been forced to adjust to fluctuating demand for their products and services. As discussed earlier, staff numbers have reduced in many industries. Many existing staff have had to take on or merge into other roles within the business. Taking on a different level of responsibility in response to business demand.
Changing the products or services available
22% of businesses changed their products or services available in 2020, with 11% intending to make it a permanent change. While this was one of the less popular modifications to business operations, it did involve some innovative changes for businesses. The demand for products such as masks and sanitizer temporarily changed the direction for many. On the other hand, products and services delivered this year may have been altered to comply with the pandemic regulations.
9% of businesses said they had changed suppliers in the survey, with 6% indicating a long-term switch. Late payment times were a common occurrence in 2020. This can be traced back to the limited cash flows businesses have been operating with in 2020. Furthermore, border closures both domestically and internationally have meant some businesses have been forced to change suppliers in some instances.
The survey summarises by stating that 75% of businesses traded with some form of modification in 2020. 65% introduced new hygiene practices, 57% limited the number of customers on site and 46% made workforce changes such as working from home or reducing staffing. The challenges of the COVID-19 in 2020 have been handled in a variety of ways depending on the business. It is clear that businesses have adapted somewhat to the adversity that 2020 has brought. 2021 however, presents many similar challenges for business owners. Our COVID-19 Resources page can provide the information needed to best approach the obstacles of 2021.