The nightly news has provided a plethora of statistics regarding the impact of the novel coronavirus (COVID-19) in regards to newly diagnosed cases, the mortality rate; its impact on the availability of hospital beds, ventilators and N95 masks; geographic penetration, age, gender and race characteristics. Not to mention the impact on our economy via lost jobs and business.
Earlier this week, ENX Magazine sent out a survey to its circulation base to get a glimpse of just how much impact this unprecedented event has visited on the office technology universe. Before we get started, here’s a bit of information regarding the participants:
A full 60% of respondents identified themselves as an office technology dealership. Another 6% identified as a manufacturer direct operation. Slightly less called themselves VARs, managed print service providers and distributors. Geographically, 27% identified as being from the Northeast, and another 27% hail from the Midwest. Another 18% are from the Southwest.
Ability to Do Business
Our first question asked, “How would you characterize your current ability to do business?” Sixty-six percent claimed to be “severely impacted” and 25% reported being “mildly impacted.” Only 5% reported “little to no impact” while 3.4% responded their business is at a “complete standstill.”
We then asked, “What client verticals have been most impacted?” Topping the list was hospitality at 73%, followed by education (71.3%), retail (67.8%) and travel (60%).
Given the changing needs of business and society in general, we asked survey responders “Has any aspect of your business experienced an uptick? If yes, what areas?” Managed network services led the way, with 21.2% citing an increase. Smart office solutions, such as video conference and digital display, ranked second at 15%. Supplies and security each garnered 14% of respondents.
Conversely, we asked respondents to identify “Which aspect of your business has experienced a decline?” Hardware (such as A3 and A4 units), not surprisingly, topped out at nearly 76%. Supplies were cited by nearly 69%, with service next at 66%. MPS was cited as a declining area of business by 43%.
Looking ahead, we wanted to see how dealers were equipped to handle these conditions for the month of April. We asked, “The president has extended the quarantine edict through April. How significantly could this impact your ability to survive as an ongoing business?” More than 43% responded, “We will make it through, but we need(ed) to right-size headcount (at least for now).” Slightly more than 37% indicated “We are well-positioned to survive this period.” About 12% answered “Because of our customer focus, we may find it difficult to continue if the quarantine extends past April,” while almost 7% responded, “Our survival is very much in question.”
Last month, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law, which provides assistance programs for, among other things, business assistance programs. We asked survey responders “Have you already or do you plan to apply for state and/or federal loan/assistance programs?” Nearly 81% responded they have or would seek out assistance.
Layoffs and Furloughs
Next, we asked, “What percentage of employees have you needed to lay off/furlough?” Remarkably, nearly 47% reported none. The highest amount of layoffs/furloughs was 10-25% of staff, at 16.5%. Another 15.6% reported 25-50% of staff were laid off or furloughed, and 10.4% reported less than 10% of staff was reduced. Slightly less than 8% said that more than 75% of staff had been let go, at least temporarily.
We also asked, “If you have instituted layoffs/furloughs, what segments of your staff have been most impacted?” The difference between sales, service, admin and other was virtually negligible, indicating that temporary cuts are being made across the board.
To see how businesses are faring in the remote working environment, we asked: “What percentage of your staff is working from home?” Leading the way at nearly 43% was “more than 75%” of staff. About 19% reported 50-75% of staff worked remotely. Only 13% responded “none.” The remaining approximately 25% fell into three buckets: less than 10% work remotely (5.2% of responders), 10-25% work remotely (12.1%) and 25-50% are remote (7.8%).
Industry businesses are showing to be fairly adept at keeping their employees informed. We asked, “What frequency do you provide updates for staff concerning COVID-19 as it applies to your business?” A little more than 37% do so on a weekly basis while 36.5% send out communications several times a week. Daily updates are given by 22.6%, while another 3.4% touch base several times a day.
Analysis
That two-thirds of respondents characterized their business as being severely impacted should come as little surprise. For the time being, it appears that companies have been able to make do with a remote workforce, with 62% having 50% or more of their employees working at home. That upwards of half indicated they have not instituted layoffs/furloughs is encouraging, although 30 days from now, that figure is certain to plummet. Most sobering is that nearly 20 percent of respondents either said their survival is in doubt should the quarantine extend past April, or that their survival is already very much in question. Thus, a quarantine extension into May could provide dire consequences for nearly one in five companies. With 81% seeking financial assistance from a state or federal resource, their ability to secure funding will go a long way toward augmenting their status as an ongoing concern.
