(STL.News) 2020 is a year of change and transformation for the business world. In order to survive and manage spending effectively during pandemic squeeze, many companies had to adapt to the new reality and find a compromise with budgeting during such a tough time. What areas were cut most, and what results would they have in the long run? Find out all the details in our article.
Cost-Cutting Measures During COVID-19
What were the first things to cut when businesses started feeling the negative consequences of the pandemic? Here are some offline activities that were compromised first:
Working from home, a rare practice before the pandemic had become an optimal solution for many companies worldwide. Many world-famous brands fine-tuned and automated all the working processes so that their employees would be able to continue teleworking even after the crisis. This means that they don’t need to have a physical office to work effectively anymore, and they can cut expenses on rent and utility bills.
Those companies who suffered from the crisis the most have no other choice but to cut salary budgets. The changes in budgets had led to negative consequences, such as:
- Employees layoffs – The most radical measure that employers had to do during desperate times was downsizing. Since the beginning of the lock-down, the unemployment rate has increased drastically all over the world, meaning people can no longer participate in the global economy.
- Re-calculating salaries – Coronavirus has changed the way employers treat their employees as well. Many companies started saving money on salaries by paying their employees as freelancers or contractors, as well as cutting their social benefits.
- Pay cut – When companies can neither fire employees nor afford them to stay, they try to find a middle ground by cutting their salaries. The cutting varied from 20-60 percent, and even though many employees weren’t thrilled about this change, they didn’t have any other choice than to stick to it, otherwise, they could lose their jobs.
New Marketing Strategies
Due to pandemic progress and worldwide lock-down, businesses had to reconsider their marketing campaigns. Many had reduced the budget on traditional ad campaigns while targeting social media marketing because of its transparent pricing and significant gains even in difficult times.
What Expenses Can’t Be Cut
Still, some spendings can’t be cut, no matter the hard times. They are mostly connected with the online aspect of the business.
Many businesses cut costs on marketing because people were no longer willing to buy stuff thanks to lock-down. However, this spending can’t be cut completely, as a decrease in advertising will soon transform into zero sales. That is why companies had to find new ways on how to stay engaged with the audience.
No matter the weather outside, security issues are always on the agenda. The new reality allowed online attackers to create completely new cyber-security issues, such as malware infecting, spam emails, phishing scams, cybercrimes, etc. All of them are somehow connected with the pandemic, which immediately grabs the victims’ attention in time of uncertainty like this.
Due to the negative consequences of COVID-19, such low profits and hence costs cut, many businesses started searching for new ways to protect their software and data online because even a minor security problem can cost an owner their business.
To make your business effective and remote staff productive, you have to rethink how to collaborate in the distance. That is why many companies invested in cloud communication tools and flexible business telephony. VoIP service has become very popular among businesses of all sizes as it helps to reach people no matter where they are at very affordable prices. Besides, many VoIP providers offer numerous automation solutions, such as lead distribution, auto dial, etc. Investing in remote telecom tools can help enhance business communication infrastructure and save money in the long run.
The main challenge that many companies had faced since the beginning of the pandemic was to find a compromise and set new priorities for the business. The things connected with the offline world like office, traditional street ads, and human resources were no longer in value. While everything connected with remote working and communication had got an entirely new meaning.
Will the companies be ready for the probable second wave? Waiting is not an option if you want to be well-positioned when post-pandemic reality emerges. The best way to do this is to take action today by setting your top priorities – this will help you create a manageable strategy to survive during any crisis.