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How CFOs are ‘planning for the worst, hoping for the best’

Financial executives are approaching the ongoing impact of COVID-19 in a markedly different environment from two weeks ago.
By: | March 31, 2020 • 3 min read
(Photo by Brook Mitchell/Getty Images)

PwC’s new biweekly survey of chief financial officers on the ongoing impact of COVID-19 revealed a markedly different picture than two weeks ago.

For instance, 87% report the pandemic is a “great concern” for their business—up 33 percentage points from earlier in the month. About 80% anticipate the fallout from the virus will decrease their revenue or profits, a jump of 22 points.

“Companies all across America and the world are being affected in some way, shape or form,” said Tim Ryan, chair and senior partner at PwC, on a March 30 conference call to discuss the survey’s findings. “It’s rare—super rare—to have something like this that is affecting virtually every single organization.”

While the pandemic is impacting industries differently—retail and travel are suffering, while healthcare and food packaging are seeing increased demand—about 60% of those surveyed are focused on cost containment.

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“Many companies are planning for the worst and hoping for the best,” Ryan said. “They’re making sure to take actions that skew toward planning for the worst to make sure they do everything they can to survive and even thrive in this environment.”

The survey, conducted March 23-25, found that CFOs are beginning to think beyond just immediate impacts, said Amity Millhiser, PwC chief clients officer.

Also see: Answering your legal questions about coronavirus

“The actions they’re taking to offset costs are moving away from only thinking of things in the short term to looking at longer and medium-term investments,” she said. Along those lines, 64% are deferring or canceling investments, double the number from two weeks ago; the investments they’re looking to curtail are largely in facilities and IT.

Overall, however, CFOs said their companies are doing what they can to avoid workforce reductions. Only 16% are considering laying employees off in the next month.

That finding was part of a series of questions focused on the workforce that were added to the second survey, said Bhushan Sethi, global people and organization co-leader.

Respondents reported three primary areas of concern when it came to their workforces. First was employee health and safety, he said. That involves ensuring employers are aware of the health status of employees, both remote and on-site, and developing policies and protocols to adhere to social-distancing and other guidelines. Of note, 56% of respondents said their organizations are looking at new benefits in light of the pandemic, including additional paid sick leave and childcare allowances.

Also see: 8 benefits employers should zero in on during the COVID-19 pandemic

“I think we’re going to continue to see other creative benefits to meet the needs around the health and wellbeing of people,” said Sethi.

Organizations that have shifted from in-person to virtual workforces are also navigating challenges associated with that change. Nearly 60% said productivity is a challenge, and employees are also struggling to figure out the best tools to get their work done. The wide range of personal obligations that workers are now also managing is another challenge. Sethi said overwork and burnout were common issues clients reported before COVID-19 and are especially relevant now, with home and work responsibilities blending.

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“A one-size-fits-all approach to working from home won’t work,” Sethi added. “Leaders need to be checking in with people, understanding how they’re working or if they need a compressed schedule.”

Long-term workforce planning is also concerning the C-suite, according to the survey. While few organizations surveyed are planning on immediate layoffs, more than 40% do anticipate some type of staffing changes.

“Some of the larger organizations are looking at creative alternatives,” he said, “including sabbaticals, compressed schedules, furloughs and other levers they can pull to avoid layoffs.”

Jen Colletta is managing editor at HRE. She earned bachelor's and master's degrees in writing from La Salle University in Philadelphia and spent 10 years as a newspaper reporter and editor before joining HRE. She can be reached at hreletters@lrp.com.

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