This is not the living with covid that anyone expected

Always one to call it as it is, William Buck Managing Director Jamie McKeough says that it is not the skills shortage or supply issues that are the number one concern for business right now. It is the fact that so many workers are wiped out because they’ve got COVID-19 or they are caught up in the cascading impact of close contacts that don’t even have the virus.

The latest Business SA William Buck Survey of Business Expectations commentary tells the story of an increased lack of labour when businesses were already short on labour.

“We feel the impact on morale and recognise the time it takes to manage this. It all adds up to this sharp dip in business confidence in the latest survey.

“From the survey, we see that 67 per cent of businesses were short-staffed due to the COVID-19 restrictions and 11 per cent had to shut down. Over half of business owners saw a change in customer purchasing behaviour through cancellations, reduced people being out and about, and decreased spending.

“These close contact rules are creating massive levels of uncertainty. And it is not just the rules themselves, it is the fact that they keep changing.

“At this point, the survey shows the decision-makers do not appreciate what they’re doing to business owners who are bearing the emotional and financial burden. And now, we have added in homeschooling too.

After reading through the pages of stirring examples shared by South Australian business owners in the survey, Jamie is full of questions for our decision-makers.

“Why does South Australia need a different definition of close contact?”

“Don’t we want all workers to be returning safely to their workplaces now? This is how we’ll get business owners, certainly in the CBD, back on their feet. They need customers.

Jamie reflects on how the September quarter’s expectations of a better December quarter didn’t materialise.

“We see sales revenue down, material costs higher and overheads rising. While costs are up for most businesses, only 22% of businesses were prepared to pass on those cost increases. This trend has and will continue to negatively impact profitability. Businesses need to review their prices as a result of these cost increases.

“Many results dropped sharply in the December quarter, however, this is not due to the opening of the borders, per se. The restrictions that came along with that are causing grief because this is not the living with COVID-19 that any of us expected.

“On top of this, we asked some additional questions in the survey around cyber security and fraud for the December quarter. Nearly one in five businesses said they’d been a victim of fraud in the last three years. 31% were targeted by a scam or digital hack in the December quarter. Half of the businesses were only ‘somewhat’ confident that their business could withstand cyber or fraud attacks and less than half had any sort of formal risk management in place to deal with that.

“Protecting their operations from particularly these cyber and financial risks means being prepared. Having the right insurance is part of this. However, just shy of half of the businesses reported sharp increases in their insurance premiums, so this is only part of the picture. Businesses need to manage these risks better, yet at the moment, the survey is reporting that businesses are not sufficiently prepared.

Final words from Jamie on these December quarter results are that hopefully, they represent a point in time only.

“The decision-makers need to take note of what business is saying in this survey and change the covid restrictions quickly. If that happens, then the South Australian business community can bounce back quickly too.”

To read the full report, please click here.

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By Jamie McKeough, Chair and Managing Director

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