Many people across the world have, to a greater or lesser extent, been working from home for the past month or so. This trend appears likely to continue in many countries, and there is no clear indication when this is likely to stop. It seems unlikely that even once lock-downs have been lifted, people are going to be slow to return to their pre-virus routines. This begs the question, what will the longer-term impact of COVID-19 on the business environment, and who will emerge as the winners and losers?

Is business travel going virtual?
How would large parts of the world have coped throughout the virus-induced lock-down period without the Internet? It has been critical in the dissemination of news and information about the various and related issues. Some of this has been fake and people have had to use common sense to weed out the truth. 

Not only has the Internet enabled communication to continue via the normal social media platforms, but lock-downs have also been a boon for video conferencing on platforms such as Zoom and Microsoft Teams. This has become so pervasive that one has to question if the regular, short-hall, there-and-back flights for a few business meetings will resume. 

The decline in this type of travel will be good for business network providers which will probably experience greater amounts of data traveling across their networks. On the flip side, the negative impact on travel related companies such as airlines, bus companies and taxies as well as travel agents is will be significant.

Does ‘bricks-and-mortar’ finally give way to ‘clicks-and-courier’?
With limited social interaction recommended, Internet shopping and home deliveries are becoming the norm. E-commerce retailers have diversified their offerings to maximise the opportunities presented by lock-downs. This trend is most likely going to continue as people opt to work from home in the medium term. The beneficiaries are therefore e-retailers and courier and logistics companies. The losers are those bricks-and-mortar retailers with no or limited e-commerce offerings. Unfortunately for them, they were under pressure even before the pandemic. 

The NASDAQ includes the world’s largest technology and e-commerce companies, the apparent beneficiaries of these changes. Is this why it has continued to climb despite the prospect that many ‘traditional’ multi-national companies are bound to post poor financial performances severely impacted by the global down-turn?

Will offices give way to meeting rooms only?
How will the owners of property companies that have invested in predominantly retail centres and office space be affected? Retail centres in many western economies have been under threat from the Internet for some time. This trend will only worsen if the post lock-down view of many is to continue with social distancing. In the office space market the beneficiaries could be companies that provide flexible office space and meeting room facilities only such as WeWork, Regis and The Boutique Workplace Company. Many businesses are likely to assess their long-term need for large areas of open-plan office space if they have adapted well enough to a dispersed working environment.

How will the teams of the future be built?
The subject that dominates many conversations relates to reducing the number of employees and retrenchments. However, managing the remaining work force is becoming more challenging for Human Resource Management practitioners. Most people are used to the camaraderie and team spirit that is associated with regular physical interaction in an office environment. Maintaining a team spirit and integrating personally is now going to become increasingly challenging the longer that social distancing continues.

The manner in which companies recruit will also be impacted. Interviews can be done over the phone or via a video link. But, it is a challenging medium through which to make those critical calls around compatibility and ‘fit’ within a team, especially when interviewing two well matched candidates. For those businesses that can continue to operate remotely there is a positive. Employees can be sourced from anywhere, not only the city in which the company is physically located. This expands the pool from which talent can be sourced.

Can you know your customers?
An increase in fraud, especially cyber fraud, seems to be inevitable. Large numbers of people simultaneously logging in to corporate networks simultaneously from disparate locations makes authentication a challenge. In this environment large amounts of confidential information is being exchanged. Businesses need to ensure that the computers that their employees are working on at home have suitable anti-virus protection and that the networks that they utilise are sufficiently secure. A failure on this front will present cyber criminals with an opportunity and makes the protection of confidential information and the authentication of clients’ identities even more burdensome. Original documents cannot always be obtained in time and virtual documents and sign-offs are becoming the order of the day. It appears that providers of security solutions and network services are being presented with a significant opportunity. Insuring against cyber-crime is also going to receive renewed attention.

What if the lights go off?
The impact of power outages on employees working from home will be far more disruptive than where they are all at an office park of shopping mall that has access to off-grid power generation. It will bring far more businesses to a complete stop. Providers of batteries and generators to the residential market are likely to experience renewed interest in their solutions.

Winners and losers:
Who are the probable winners and losers going to be in the post COVID-19 world going to be? Here is our view:

In a short space of time, lockdown has forced us to question our business models and answered questions that we might have asked ourselves for some time, turning conversation into evolution. For others, the changes will be more pronounced.

Mettle Corporate & Specialised Finance
William Marais
T: 27 21 929 4884
E: wmarais@mettle.net