The novel coronavirus pandemic will impact businesses — but finance leaders are confident that they have what it takes to weather this storm, according to a survey conducted by PricewaterhouseCoopers (PwC).
Coronavirus, which causes a disease known as COVID-19, has killed more than 6,500 people and infected more than 169,000. To date, about 51,000 companies worldwide have direct suppliers in affected regions, like Asia and Europe, and the global economy is at risk because of the spread, according to the Federal Reserve.
PwC, a global professional-services firm, is regularly surveying 50 chief financial officers to compare their responses amid the novel coronavirus pandemic. About 80% of the people surveyed are leaders in Fortune 1000 companies, while others work at healthcare and private organizations. Though more than half of company leaders expressed great concern that coronavirus will negatively impact business operations, an overwhelming majority have high confidence that they can power through this pandemic.
Three PwC leaders — chairman Tim Ryan, vice chair and COO Amity Millhiser, and US financial services leader Neil Dhar — hosted a media call on March 16 to discuss how their clients are responding during the health crisis, and shared what you should do right now to soften the financial blow for your company.
Here's exactly what you need to know.
Leaders are more confident in what they can control
According to the survey, 90% of leaders believe their businesses would return to normal in less than three months if coronavirus were to end today. They're expecting a quick bounce back from the pandemic. Nevertheless, an overwhelming 80% shared that a global recession is among the top three concerns as a result of this health crisis.
"What this really means to me is that leaders are more confident in their own businesses than they are in the health of the overall global economy," Millhiser said. "They're more confident in what they can control. And I think this is an ongoing trend versus what is outside their control."
She further explained that this statistic speaks to how companies have invested in contingency-planning over the past few years to build a resilience — a sturdy backbone that would be able to handle a crisis like the coronavirus.
When asked about whether finance leaders might be underestimating the potential impact of the pandemic, the COO told Business Insider that she expects confidence level and leader responses to change over the next few weeks, due to many uncertainties regarding the spread and duration of the virus. Company CEOs and business leaders who have spent time preparing for an economic downturn and a financial shock seem to be more assured, Millhiser added.
Companies are tweaking their business models and adjusting to "the new normal"
Of the 50 CFOs surveyed, more than half are expecting a decrease in revenue and profit. Therefore, they're revising their finance models to fit this trajectory caused by coronavirus. For example, a reported 62% of leaders are implementing cost containment, in which they're limiting unnecessary spending and placing a tighter grip in company expenses. About 44% shared that they're adjusting guidance, 32% are deferring or cancelling investments, and 28% are changing financial plans, the survey noted.
"We don't think it's a time for companies or others to hold on to what original plans were for 2020," Ryan said. "It is clear that the virus has changed plans of almost every company and they need time to assess what the new normal looks like."
He urged stakeholders and investors to not judge companies by their prior 2020 plans. What businesses are doing to get ready for 2021 and beyond and how they're planning for the long-term should be key determining factors for future partnerships, the chair and senior partner added.