New Delhi: As the COVID-19 pandemic disrupts several economies worldwide, particularly India’s, a new report by the International Labour Organisation (ILO) says that the greatest challenge faced by businesses across the globe has been keeping up cash flow to manage operations and staff, tide over supplier disruptions and gaining access to raw materials.
In its report released on Friday, titled ‘A global survey of enterprises: Managing the business disruptions of COVID-19’, the ILO surveyed 4,530 organisations across 45 countries between July and September this year. The organisations were asked questions about continuing with operations, their financial health and pertaining to their workforce.
The report mentioned that more than 85% of the organisations surveyed reported that the COVID-19 pandemic had “a high or medium financial impact on their operations.” It added that only close to 33% said that they had enough funds to recover from the economic impact brought about by the pandemic and that micro and small enterprises were among the most affected.
“At that time, 78 per cent of those surveyed reported that they had changed their operations to protect them from COVID-19, but three-quarters were able to continue operating in some form despite measures arising from government restrictions. Eighty-five per cent had already implemented measures to protect staff from the virus,” the report said.
It added that close to 80% of the organisations had planned on retaining their staff. However, the report mentioned that larger firms were more likely to have said so with close to 25% saying that they feared losing more than 40% of their staffers.
In terms of preparing for unforeseen events and risk management, less than half of the companies surveyed had chalked out a business continuity plan at the time COVID-19, with micro and small enterprises the least likely to have prepared for such situations. “Additionally, only 26 per cent of the enterprises who responded said they were fully insured and 54 per cent had no coverage at all. Medium-sized enterprises, (those with 100 to 250 employees), were most likely to have full or partial coverage,” he report added.
With respect to fashioning a business recovery, about 40% of the organisatoins said they did not have the funds required to support it while close to two third said what they had was not enough.
Out of the sectors that the surveyors reported on, “the tourism and hospitality sector, followed by retail and sales, were most likely to report funding issues.”
“The ILO survey finds that COVID-19 has severely disrupted enterprises worldwide irrespective of size, sector or region of operation. The economic contraction and additional shocks from COVID-19 have put significant pressure to enterprises. The magnitude of disruption includes inadequate cash flow to maintain staff and business operations, lowered demand for products and services, supply chain disruptions, transport restrictions and workers’ inability to go to their physical workplaces, among others,” the report said.