Clearly everyone is focusing on current trading, the here and now has to be front and central in every decision and at the forefront of every business leader and business owner’s mind.
How do I plan through such unprecedented time?
How do I ensure my business has cash and can meet its short and medium term liabilities?
How do I retain my staff?
How do I provide a continuous service to the clients and candidates I have worked with and built strong relationships over many years?
These are the critical decisions facing everyone on a daily basis.
Whilst our focus is quite obviously drawn to the challenges outlined above, we must take time to plan for the other side of this pandemic, ensuring we are able to immediately upscale and take advantage of market demands once we begin to come out and the economy begins to ramp up.
So, “What happens next”?
If we take account of the plans we have already put in place as the immediate and critical actions to buy time to make longer term informed decisions, what the economists are telling us about the impact of the government support and how it is likely to shape future market strength and trading conditions.
The government working with the Bank of England has been bold and has acted swiftly to provide support to business and to underpin the economy by taking 4 immediate and decisive steps.
- The salary subsidy through furlough has enabled business to retain rather than make redundant large numbers of employees, reducing the salary burden to business and protecting 80% of the income of those effected.
- A further reduction in the Bank base rate to support business and encourage continued spending through this crisis, in particular as we come through the other side.
- The Government loan scheme on a zero interest basis to support businesses in financial difficulty to trade through where ever possible.
- The new scheme introduced to assist the self-employed retaining their status and to provide financial support over the coming weeks and possibly months.
These measures have been taken to assist our economy and underpin business.
Additionally, other considerations include deferred payments for both VAT and NI, increased borrowing with rates being at the lowest of levels. Therefore, government has a strong appetite to leverage debts over a 10 year period supported by a proactive approach to QE. Inflation is also likely to fall which will act as a driver to support consumption and infrastructure spending once we begin to come out through this period.
Other considerations impacting the projected economic bounce are sterling exchange rate, our fiscal unity and consistency, and whilst it seems a long forgotten subject, a clear and defined strategy around Brexit with the most commonly held view of an extension of one to two years to have the most positive impact.
So, “What happens next”?
We must focus on what’s within our control, make informed business decisions, manage our finances, continue to do what we do best, embrace new ways of working, consistently engage with our people, our clients and our candidates, take government advise and support, work harder and more diligently than ever before.
So the “what happens next” is that we get through this together as a team, whether you are a client, a candidate, a competitor or one of our own, we must all work together to ensure we come through the other side able to play our part in the economic bounce and to help driving the uplift in the UK economy in the back half of 2020 and beyond!