The COVID-19 crisis is a systemic shock to the global economy that has affected all organisations. The world is on the edge of a major economic recession. This short report gauges ACCA members and other stakeholders’ views of the impact of the crisis so far and the measures being undertaken to mitigate the impact of COVID-19, exploring and sharing the early lessons that have been learned. The survey supporting this report was issued on 13 March 2020. Over 10,000 members and other stakeholders across the world from over 100 countries responded to the survey. Further demographic information on the respondent base is available towards the end of the report.
Organisations irrespective of size, sector or country of operation are being hit right across the value chain. By far the most widespread concern ACCA found was regarding the impact on organisation’s stakeholders, and stakeholder safety and health remain immediate issues. Almost 60% of respondents cite reductions in employee productivity.
The operation value chain is dramatically affected, which has led a significant number of respondents to see a fall in customer demand, major supply chain disruptions, deferred launches of new products and services, and capital investment plans being put on hold. Almost 40% of respondents are already experiencing cash-flow issues, a particularly acute challenge for smaller organisations, and for a minority there are small but growing concerns about financing and debt obligations, which we could expect to rise in the coming weeks. The immediate picture is of focusing on short-term survival, which may worsen over the coming weeks and months.
Revenue and profit forecasts are being dramatically reduced. Among business leaders surveyed, 80% expect year-on-year revenue and profit to be significantly below forecasts. Smaller organisations have a more pessimistic view and among business leaders of the smallest organisations (fewer than 200 employees) 85% expect year-on-year revenue to be lower than the previous year, and 86% expect year-on-year profit to be lower.
In the face of a significant crisis such as COVID-19, it’s important for organisations to plan and perform financial reforecasts regularly. However, in practice, only 53% of respondents suggest that their organisations have performed a reforecast since the COVID-19 outbreak.
The data suggests many respondents remain unsure of the impact of different government interventions around the world in response to the COVID-19 crisis. While different business support strategies are being adopted, only 17% currently see these as effective. For most companies, employment and remuneration policies are under review to reduce cost, flex employment models and ensure compliance with emerging health and safety requirements. The data shows a range of other interventions already activated by some organisations, including recruitment freezes, salary freezes and removal of staff bonuses.