Editor’s note: Joyce Fang is talent management and business services firm Vaco NC’s Marketing Manager.

RALEIGH –  As the world takes steps to prevent additional COVID-19 infections, parts of the global economy have effectively halted. Despite quick responses from the CDC and world governments, including a recordbreaking $2 trillion relief package here in the US, economic repercussions have been devastating and far-reaching. Companies responded to health concerns and falling demand by shuttering branches and adjusting their workforce.

North Carolina is an unfortunate leader in jobless claims, being one of five whose claims rose 4,000% or more. We are already in a deep recession, if not a full depression. In fact, Goldman Sachs expects the economy to shrink at a record 34% annual rate during the second quarter of the year, before potentially rebounding in the third quarter.

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Despite the grim news, this may be the best time to invest in your company. Talent is available, products are cheaper, and competition is low while other businesses pause on strategic initiatives.

3 areas to come out of COVID-19 stronger
  • Virtual tech & cybersecurity

From remote work to grocery shopping, everyone and everything is virtual. In the US in the last week alone, pure e-commerce orders increased by 50%, while revenue increased by 42%. This will not change after the lock downs associated with COVID-19. Per a Gallup poll, 59% of US workers working from home due to COVID-19 would prefer to keep doing so after restrictions are lifted. 74% of CFOs agree and plan to keep a portion of their workforce in permanent remote positions post-COVID-19.

This, paired with the cost-savings of having online meetings, means the move to virtual is here to stay.

Take care of the bandwidth and security issues every business is encountering.

This includes:

• Boosting your cybersecurity protocols
• Enhancing your cloud migration and storage
• Unburdening your VPN
• Investing in software and hardware that operates efficiently in heavy-load times

Taking these steps will exponentially increase employee efficiency, accessibility and effectiveness, while keeping your data safe. Several of our clients have already taken steps to meet rising needs in telehealth, electronic health records, and compliance in a virtual world. Businesses that commit now to their virtual offerings have the leg up on their competitors that are waiting for the economy to rebound.

  • Talent

Our economy is facing the challenge of scaling production with limited and remote workforces, while absorbing gaps in service providers. Complex accounting and financial reporting implications have also emerged as a result of COVID-19 and the economic relief packages available.

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While 86% of companies have had hiring initiatives impacted, all organizations must continue to ensure it has the right talent to meet essential needs. In addition to beefing up virtual capabilities, most companies will need assistance in debt covenant compliance, adjustments for expected losses, reforecasting, process documentation, etc. This is especially true for companies taking advantage of the CARES Act loans and grants.

The demand for talent in the North Carolina market remains, albeit on a delay. During this period of uncertain cash flow, consider keeping interviewing processes active, hiring remote employees where critical, and supplementing full-time employees with consulting and contract labor to allow for increased nimbleness during uncertain times. Companies continuing to interview during COVID-19 are accessing
top talent with less competition.

  • Disaster recovery planning

This crisis is exposing limits to our internet infrastructure, exposing privacy and cybersecurity issues, and destroying traditional supply chains. Per CNBC, 40% of CFOs already have or expect supply chain disruptions that can take up to six months to recover from.

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Most organizations are facing strategic decisions during COVID-19, making technology, product, and process assessments more critical than ever before. There is no “one size fits all” to solving issues related to a global pandemic; however, many organizations are taking measured approaches to responding.

In a post-financial crisis analysis, the Harvard Business Review found that companies that used slowdowns to reexamine their business models reduced their operating costs on a permanent basis. When the demand returned, that cost-savings translated to faster-growing profits over competitors.

The main concern

Low cash reserves, unstable cash flows and an uncertain timeline of COVID-19 are implications that cannot and should not be underestimated.

The two ways to navigate these uncertain waters are to:

1. Take a holistic approach. Businesses that cut costs faster and deeper did not necessarily succeed in the aftermath of the financial crisis, nor did their heavily-investing counterparts. Companies that will come out of COVID-19 stronger are those that focus on anticipated needs and overall efficiency

2. Know your limits. Only commit to accessible projects. Ensure the right tools are in place for a remote workforce and virtual clientele. Divest nonessential assets. Actively manage financial reporting. If applicable, apply for loan relief as soon as possible, given the cap on the Paycheck Protection Program.

Prioritize project backlog to ensure timely project completion once the economy rebounds.

The outcome

During every economic downturn, two types of companies emerge. The first focuses on aggressively cost-cutting, while the latter deploys a high spend strategy to acquire new technologies and undervalued talent. Rather than committing to one of these, companies should target an optimal balance of each, with their core business and post-recession goals leading the way.

In the 2000 recession, Staples did not sway extremely to either side. They reevaluated their business model and, despite closing underperforming locations, grew their workforce by 10%, primarily to support core services. Post-recession, they outperformed their main competitor by 30%. During the financial crisis, Costco opened stores but focused their merchandise mix and limited product variations,
allowing for increased discounts and a more streamlined supply chain. These measures allowed revenues and earnings to steadily grow, even post-recession.

It’s true, this may be the best time to invest in your company. Talent is available, products are cheaper, and competition is low. However, businesses should selectively focus their capital to ensure they have the right tools and talent to support their core business. Companies that follow these principles will not only succeed but will emerge from COVID-19 more resilient.

About Vaco

Joyce Fang is talent management and business services firm Vaco NC’s Marketing Manager.

Joyce Fang

Vaco provides boutique level service, specializing in consulting, consultative project resources, executive search, permanent placement, and strategic staffing. Areas of expertise include c-suite search, accounting, finance, technology, healthcare IT, operations, administration and international managed services. Vaco invests in knowing our consultants and clients so well that we can accurately provide
insights and trend analyses for all things affecting North Carolina business development.