2021 trends | 3 reasons 2020 wasn't as bad for business as you might think
Headlines this year have been full of catastrophising statements about the volatility of the business landscape, and undoubtedly negative consequences have arisen as a result of coronavirus, not least the sheer volume of redundancies and furloughs inevitably needed due to lockdowns and changing consumer habits.
However, has 2020 actually been the devastating business year that many perceive it to be? Maybe not. New research by recruiting firm Wade Macdonald found that nearly half of UK businesses actually outperformed their initial predictions for this year.
The survey, which gained responses from over 140 business leaders from a diverse range of industries, sought to explore the disparity between financial and output predictions taken in early 2020, and compare them to a survey of the same group recently.
The original report found leaders had a very negative outlook on the market; 71% of respondents expected that they would have to reduce their staff numbers whilst only a third of businesses felt it likely they would recruit. A massive 50% of leaders predicted it would take at least two years for the economy to recover.
Since April, as predicted by many, the pandemic has taken an unprecedented toll on businesses of all shape and size. However, while some areas will be harder to recover from than others, November’s research shows that the overall picture is far less distressing than anticipated.
The results from the survey suggest that the majority of companies have been a lot more resilient than first expected. While half are down on last year’s figures, over a third 36%, of businesses have outperformed their 2019 results, with a further 14% remaining stable.
And whilst much uncertainty still looms around 2021, this upward trajectory is tentatively expected to carry over into the new year. Nearly half of respondents expect their businesses to grow by up to 25% whilst 20% expect 25-50% growth. A small but significant seven per cent expect to grow by over 50%.
In April, business leaders were extremely concerned about the high risk of redundancies. Nearly three quarters expected that they would have to reduce their staff numbers during 2020. While a large number of staffing cuts were made, the numbers were not as extreme as forecasted. 64% of leaders decreased team numbers but 36% of leaders reported that they had grown headcount since the beginning of the pandemic.
The saviour of many jobs, according to the research, was the furlough scheme introduced by the Government, of which 70% of respondents used to help prevent the levels of redundancy expected in April 2020.
When asked in April, just one-third of businesses were expecting to actively recruit over the coming year. However, this number grew exponentially over the course of the pandemic with 73% of respondents reporting to have recruited between April and November.
The factors for this unexpected change vary; from outperforming financial expectations, improved candidate confidence and greater understanding and investment in remote working and virtual onboarding, companies were able to work, and recruit, more effectively and efficiently.
Source: Executive Grapevine