Over 69% of Sri Lankan companies anticipate unforeseen opportunities amidst the pandemic while 92% have taken some form of measure to manage staff count, ‘Sri Lankan Market Trends Survey’ published by Ernst & Young Sri Lanka said.
New business opportunities are continuing to emerge post-COVID-19 and they intend to explore them beyond the crisis.
“As business leaders navigate the crisis and its aftermath, the role of employees and HR functions in shaping the organisational response to the emerging market trends cannot be overstated. People and HR functions are both critical to the organisation’s continuity, resilience and capacity to reimagine its future for the new normal,” stated Partner and Consulting Leader, Ernst & Young Sri Lanka and Maldives, Arjuna Herath.
The survey captured the responses of over 200 organisations – representing a workforce of over 250,000 across 12+ sectors, captured the business and HR challenges faced by organisations amidst the Covid - 19 crisis.
 Arjuna Herath
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“Over 57% of the survey respondents anticipate a high negative business impact that is presumed to last for over 6 months whilst, the Tourism and Hospitality, Apparel and Related sectors re-affirmed the impact on their businesses to last for almost 12 months,” said Herath.
The respondents in the Automotive and Construction sectors predict the impact to last for about 5 – 6 months which is the shortest period the participants believe the impact would last.
To manage and mitigate the business impact, almost all respondents indicated that they have been compelled to enforce short to medium-term changes to their HR plans in the form of controlling workforce numbers or compensation, while implementing various other cost optimisation measures across the business.
Hard decisions have been taken to reduce the size or remodel the shape of workforces and how they are remunerated, to match business and liquidity demands.
The study depicted 92% of organisations as having taken some form of measure in relation to managing staff count, whilst ‘Freezing of Recruitment’ was seen to be the most common practice adopted, representing an overall 89% of all respondents across most sectors.
While Construction, Telecommunications and the Tourism and Hospitality sectors respectively had the highest number of respondents having imposed ‘termination of contract staff’, this may also be in proportion to the number of contract staff these sectors employ. Respondents from diversified companies, logistics and the healthcare sectors had indicated retention of almost all contract staff, at the time of this study.
Few respondents, predominantly those in the telecommunications sector, also signaled to opt for other ways of managing headcounts, such as reviewing post-retirement extensions and short-term staff engaged in projects.
Herath also stated “Although organisations both global and local, have adopted numerous rigorous measures, much like salary cuts, furloughs and layoffs, to either improve current cash flows and bottom line or to protect future cash flows and bottom line, it is apparent that these actions must be imposed alongside due consideration to the overall business impact.’
The survey revealed that 82% of respondents were compelled to impose measures around compensation and benefits, to curtail liquidity pressures during the height of the pandemic as well as to protect future cash flows.
While pay cuts were predominant in the Apparel, Tourism and Hospitality, Construction and Diversified sectors, reduction in allowances and other forms of benefits was prevalent across all sectors.
Gaps in understanding and readiness to adapt to the almost-overnight enforced ‘Work from Home (WFH)’ guidelines, surfaced many HR challenges of its own.
Nearly 50% of organisations indicated in the survey that they found WFH unsuitable for a majority of job roles in their organisations, considering the nature of work performed and 65% of organisations had to contend with the challenge of depleting staff engagement and motivation levels.
Yet for all, to allow the practice of social distancing post-lock down, WFH is expected to continue at varying levels.
Herath further stated, “Successfully returning to the physical workplace is the priority. Yet, safety of our people comes first and organisations that put people at the center can win the trust that will define true resilience in a post-COVID world.’
In this context, EY introduced its ‘Remote Working Index’ (EY RWI) – a scientific tool to help organisations gain an aggregated and granular view of the remote working propensity of activities and roles, in determining who returns to work and what can continue to be done remotely to achieve sustainable benefits.
On a brighter note, new business opportunities are continuing to emerge post-COVID-19. The survey found 69% of organisations having identified unforeseen opportunities that they intend to explore beyond the crisis.
It was further observed that nearly all respondents in the Banking & NBFI, Apparel & related, Logistics, Consumer Products & Retail sectors have identified unforeseen opportunities during the crisis that they intend to explore. An overall 60% of respondents exploring future proof business avenues to identify sustainable business models, led by the Banking & NBFI sector, Information Technology sector and Diversified Groups may justify the 70% of Banking & NBFI and Insurance sector respondent’s indication to strengthen budgets on technology for business and process optimisations.
Thus, the role of HR becomes even more pivotal in helping them transition into the ‘New Normal’ and build the required skills among their workforce to meet their new demands.
As leaders plan for life beyond the pandemic, building a human-centered approach to improving enterprise resilience may not only drive a faster recovery but allow organisations to emerge stronger than ever. (SS)
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