Yorkshire finance bosses are braced for second lockdown

The first Yorkshire FD Survey, conducted by specialist finance recruiter Woodrow Mercer Finance, polled finance heads about how the recent lockdown had affected their firms.

Of the 61 respondents, only 43 per cent expect to escape without redundancies, whilst 35 per cent anticipate laying off up to 10 per cent of their workforce.

Two thirds of those polled expect 2020 revenues to be either significantly below (34 per cent) or below (33 per cent) target by the end of the year, with only 10 per cent expecting revenues to be ahead of projections.

Some 87 per cent believe that a second lockdown is likely in late 2020 or early 2021 and 31 per cent of firms are planning to reduce their expenditure on property when their current obligations end.

James Roach, managing partner of Woodrow Mercer Finance, said: “The vast majority of Yorkshire businesses haven’t seen much bad debt to date, which is obviously good, and, thankfully, three quarters of the FDs we surveyed think that less than one in 10 of all businesses will fail in the recession.

“Finding the positives in the results isn’t easy though and there is a general feeling that we haven’t seen the end of the disruption from the pandemic. On the brighter side, over 79 per cent of businesses say employees have been able to work effectively under lockdown, and 75 per cent are planning to adopt new working practices as a result of the forced change in working practices.”

He said that job seekers will have to get used to changes in hiring processes too, with increased vetting of CVs and background checks by almost a quarter (24 per cent) of firms.

A keener focus on candidates who can demonstrate self-motivation and organisational skills was cited by 59 per cent and one in 10 firms will increase the use of recruitment professionals to improve their new, remote hiring processes.

Almost nine out of 10 (88 per cent) of the FDs said they had taken advantage of the Government’s Coronavirus Job Retention Scheme, with a further 18 per cent having applied for Coronavirus Business Interruption Loans, and one in five (20 per cent) have also received a Bounce Back Loan.

“It is clear that Yorkshire firms have taken advantage of the Government relief schemes, and that has helped mitigate the level of redundancies so far, but with 59 per cent of FDs cutting non-essential spending and over 83 per cent seeing reduced spend from customers, we know that we haven’t yet seen the full impact of the shock to the economy caused by the pandemic,” said Mr Roach.

“The silver lining for the economy is that we’ve adapted to working effectively from home and we might well see quality of life benefits as a result, as well as the environmental and efficiency boosts that reduced commuting has given us.

“That said, it comes at a huge cost, and most businesses are bracing for a second lockdown. This could deliver the knockout blow for many businesses that have weathered the storm with Government support, but which may be less available in the event of a repeat lockdown.”