Return to ‘normal’ will take longer than previously anticipated

10 June 2020 3 min. read
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Eden McCallum has released the third version of its Covid-19 survey series. How has the sentiment of European business leaders changed over the past three weeks? 

The latest survey, which was conducted among 180 executives and managers working across Europe (the majority of which are based in the UK and the Netherlands), found that expectations regarding the duration of disruption from Covid-19 continue to worsen. Now, 65% of respondents expect business to take over 9 months to return to ‘normal’, versus 56% three weeks ago and 39% in early April. 

Planning assumption: when will business return to ‘normal’

However, forecasts of the revenue impact appear to be stabilising, with 34% expecting a 2020 revenue fall of over 30% in the third survey versus 32% in late April and 40% in the first survey. 

According to the latest statistics, the world now has over 6.8 million people infected with Covid-19, and to the tune of 400,000 confirmed deaths. The outbreak of the pandemic has caused an economic recession in nearly all major economies regionally, with the latest forecasts estimating that the aggregate economy of the European Union will contract by over 7% this year amid the fallout of demand. 

Working from home

As part of lockdown and restricted travel measures, most companies have adopted a ‘work from policy’. In Eden McCallum’s survey, over 50% of respondents said that over 80% of their employees are currently working remotely, with around one fifth of companies operating with 100% of employees working from home.

Expected change in 2020 revenue due to COVID-19 crisis

As the lockdown eases across Europe, 65% of employers highlighted that they will continue to encourage remote working, suggesting that Covid-19 is set to structurally ramp up demand for home working. Meanwhile, only 6% are currently actively encouraging a return to onsite work, and in response are making changes to workplace layouts to enable physical distancing, and introducing staggered shifts. 

The report further casts a dark shadow on the mid-term prospects for Europe’s labour market. 60% of the leaders surveyed said that they are considering permanent reductions to their workforce once government support ends, with not surprisingly profit-driven private equity backed businesses most likely to cut staff. 

According to Eden McCallum’s second Covid-19 survey, while companies are busy enacting their business continuity plans, they are in parallel preparing their business and operating models for a different post-corona world.