Employees are worried about returning to the workplace, and CFOs think it will take their company over three months to recover from the pandemic, according to PwC’s fifth COVID-19 CFO Pulse Survey.
For the first time, more than half (58%) of CFOs expect it will take their companies at least three months to recover from the long coronavirus-induced shutdown once they reopen, according to PwC’s fifth COVID-19 CFO Pulse Survey. That percentage has continued to increase every time the survey is conducted, said Tim Ryan, PwC’s US chair and senior partner, during a call to discuss the latest findings.
CFOs are also bracing for lower than anticipated revenues and reconfigured workplaces, as well as a skeptical workforce concerned about returning to the office safely, the study found.
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“The overriding themes we’re hearing from the CFO community are that the initial shock of the virus and its effect on the business community is over,” and executives are shifting to focus on what they can control, Ryan said. “We’re really seeing CFOs are normalizing what it means to operate a business in a COVID-19 world and are coming to terms with … broader revenue and cash flow expectations.”
Ryan said PwC believes the most successful companies post-pandemic will be the ones that focus on culture, employee safety and experience, revenue strategies, and cost management.
He delved more deeply into those areas, saying that PwC is hearing from clients “across the board” not just about how to protect remote workers, but how to evolve this culture so companies can continue to innovate while also addressing the employee experience.
The firm is also hearing that CFOs are cautiously optimistic about returning to work despite the absence of a COVID-19 vaccine and lack of mass testing, Ryan said. “Safety measures are largely working and while not perfect, when practiced with seriousness … there are generally good results.”
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Returning to work will be done at a slower pace, however, because generally, CFOs say work is getting done in the remote environment, Ryan said.
Digital transformation is an area where CFOs are and will continue to invest in, he said, to enable new ways of working.
The survey also found that 55% of CFO respondents said they are projecting revenue/profit losses to be greater than 10% this year, which is up only two percentage points from two weeks prior, suggesting that worries about more severe revenue losses are starting to level off.
Some positive notes
Meanwhile, layoff expectations seem to be holding steady with 31% of CFOs anticipating layoffs in the next month, a one percentage point drop from PwC’s survey of two weeks ago. The survey findings suggest that the urgency to reduce expenditures and cut costs is also diminishing, PwC said.
While 80% of CFO respondents said they are considering cost containment measures, this figure is down from 86% two weeks ago. In addition, fewer CFOs are anticipating furloughs over the next month (36% vs. 44% two weeks ago), the survey found.
Other bright spots include the confidence of businesses in their ability to protect their workers. In fact, nearly two-thirds (64%) of survey respondents said they are “very confident” their company can help create a safe workplace environment for employees, the survey said. In addition, 83% of respondents anticipate changing workplace safety measures, up six points from two weeks prior, and 43% anticipate making remote work a permanent solution for roles that can accommodate it.
However, employers are still likely to face a host of employee concerns about returning to the workplace. In a separate survey PwC conducted of more than 1,100 American workers the week of May 4, 39% were forced to work remotely or stop working altogether, but are still getting paid, PwC said.
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Within this group, more than half (51%) said that the fear of getting COVID-19 would prevent them from going back to the workplace if their employer asked. In addition, nearly a quarter (24%) said they are unwilling to use public transportation for their commute and 21% cited their responsibility as a parent or caregiver as a reason preventing them from going back to the workplace.
“Given the unprecedented nature of this global pandemic, it is clear that workers are very worried about being able to stay healthy and safe as they are asked to return to their offices and worksites,” Ryan said. “The most important thing business leaders can do to address their employees’ worries is to communicate frequently and transparently about how they are working behind the scenes to keep them safe, healthy, and employed.”
PwC has created Check-In with Automatic Contact Tracing, a tool that allows companies to help quickly identify and alert employees who may have come into contact with a co-worker at the workplace who has tested positive for COVID-19.
“As more companies reopen, CFOs are coming to terms with a new reality and managing their expectations accordingly,” said Amity Millhiser, PwC’s chief clients officer. “We are seeing many leaders begin to pull back from drastic cost containment measures as they figure out how to operationalize their businesses in a new environment that must take into consideration the calculated risks of operating during this crisis. While their worries are leveling off, this could all change if there is a future spike in infections.”
Other survey results
- 85% of respondents expect that COVID-19 will decrease their company’s revenue or profits this year (up five percentage points).
- 6% of respondents report that COVID-19’s impact on revenue or profits is still too difficult to assess at present (down six percentage points).
- 20% of respondents expect a decrease in revenues or profits of 25% or more.
- 58% are considering deferring or canceling planned investments (down 12 percentage points). Of these respondents, 80% (same as two weeks ago) are considering delaying or canceling facilities/general capital expenditures.
- 57% (vs. 62% two weeks ago) are considering workforce investments and 48% (same as two weeks ago) are considering IT investments.
- 52% are planning to understand the financial and operational health of their suppliers.
- 47% are planning to develop additional, alternate sourcing options for their supply chains (down nine percentage points).
- 73% anticipate reconfiguring work sites to promote physical distancing (up eight percentage points).
- 58% anticipate changing and/or alternating shifts to reduce exposure (up six percentage points).
Positive long-term changes:
- 72% believe their companies will be more agile and resilient moving forward.
- 68% cite moving to a flexible work environment has better equipped their companies for the long run.
PwC surveyed 288 US CFOs and finance leaders between May 5-7; 68 of them were from Fortune 500 companies. 81% of respondents were from public and private companies in four sectors: consumer markets (16%), financial services (23%), industrial products (26%), and technology, media, and telecommunications (16%).