Writing for The Leaders Council, Tim Bond [pictured], Head of Insight at the Data & Marketing Association, discusses survey findings where businesses report tentative signs of recovery and hope for the future, despite another challenging year ahead.
Since the first Covid-19 lockdown in March 2020, the Data & Marketing Association [DMA] has been conducting regular surveys to understand more about businesses’ experiences of the pandemic. The ‘Coronavirus – The Impact on Business’ series offers insights into how businesses have coped with the challenges of the last year and how they intend to build back as some level of normality begins to return.
The survey results have provided the DMA with important information about how businesses have been affected over the past 12 months. Specifically in terms of revenue, staff recruitment and terminations, managing costs, budgeting, and what the government and associations like the DMA can do to help throughout this period.
The latest findings reveal some positivity for businesses looking forward. However, these results also point to a long road to fully recover from the pandemic for many organisations.
Impact of the pandemic
Most businesses [70 per cent] are still feeling the negative economic impacts of the pandemic. Although this is down from a high of 94 per cent stating this in April 2020, it is still most of the organisations surveyed.
Positively, those reporting the economic impact as extremely negative has almost halved – from 31 per cent a year ago to 16 per cent now. This is also a notable decline from the one in four [25 per cent] feeling this way in November 2020.
Furthermore, of those businesses that have been negatively affected, almost two-thirds [63 per cent] report seeing some signs of recovery compared to earlier in the pandemic. This suggests that around half of UK businesses surveyed are starting to see signs of recovery.
These early signs of recovery are reflected in the estimates of revenue decline amid the pandemic. In March 2021, businesses reported revenues were down by just under a quarter [-24.0 per cent], a significant improvement on the low of almost half [-47.2%] reported in May 2020.
Staff retention and recruitment
One of the biggest impacts on many businesses in the UK over the last year has been their ability to retain existing talent [whether permanent or freelance], let alone recruiting the next generation. While one in five organisations [21 per cent] have recently hired new permanent members of staff, just half as many have been able to bring back freelance or short-term staff [nine per cent]
Furthermore, the bonus and salary limitations on retained staff are expected to continue, as just eight per cent report having re-instated these reductions already. Although one in four [26 per cent] are hopeful they will be able to restore these in the coming months as their recovery takes shape.
Just one in five businesses [21 per cent] are planning to recruit for data and marketing roles in the near future, with an overwhelming two-thirds still not in a place to expand currently. When asked about the likelihood of recruitment returning in the coming year, just 13 per cent were confident they would be able to. A third said they would definitely not be hiring this year [35 per cent], with the remainder believing it was either possible [37 per cent] or unlikely [15 per cent].
Looking ahead
Amid the continued success of the vaccine roll-out and the roadmaps to reducing restrictions, the confidence that businesses have in the UK government has returned somewhat. After a low of just 16 per cent feeling confident in November, this has returned to 33 per cent – its highest since May 2020. Half of those surveyed [50 per cent] also believe the government should be doing more to support businesses.
Looking forward to the next 12 months, businesses forecast modest revenue growth [+5.9 per cent]. Most encouragingly, the majority of organisations surveyed in March this year [75 per cent] believe their revenue growth would remain either static or see some positive growth over the next year. Meaning that despite the challenges behind us, and even those that lie ahead, most businesses are finding ways to adapt and succeed.
The ‘new normal’
Many organisations have continued to ask staff to work remotely over the course of the pandemic, never falling below two-thirds [66 per cent in September 2020]. In March 2021, this figure was back up to 84 per cent amid the latest lockdown restrictions and most expected to stay working from home for the next few months – for around 62 days on average.
Over half of professionals [52 per cent] expect the offices and spaces they work in to change for the long-term post-pandemic too. Many would like the new ‘working norm’ to include more working from home [78 per cent], flexibility of hours [78 per cent] and days [65 per cent], and more virtual meetings [63 per cent].
The long road to recovery
A year on from the first UK-wide lockdown, trading remains extremely difficult for many businesses. Revenues remain significantly below pre-pandemic levels and budgets for the coming year look set to be similarly reduced.
It’s encouraging to see signs of hope returning after what’s been a year of challenges and difficult decisions. As revenues begin to return, this optimism is reflected in the financial forecasts and plans to hire new staff in the coming year. However, these signs of positivity are tentative and the road to full recovery will take time.
The year ahead will have its own challenges for businesses, from conducting business post-Brexit to ensuring a data adequacy agreement is finalised with the EU, not to mention the unknown of what impact coronavirus will continue to have.
