Lockdown round 2: Now what for employees and business owners?

Lockdown round 2: Now what for employees and business owners?

On Friday 26 th March 2021, President Kenyatta announced the cessation of movement by air, road and rail movement in and out of Nairobi, Kajiado, Machakos, Kiambu and Nakuru. Despite unified global efforts and local government directives laid in place to deal with the previous waves of COVID-19, the incessant battle to contain the virus that has torn through borders and left a destructive path in its wake continues.

In the process, millions of lives have been lost, businesses have been ravaged and the global community is up in arms over the uncertainty of the rapidly changing environment. Therefore, as Kenyans settle into the second national lockdown, citizens, SME’s and traders face fresh challenges to survive and keep their businesses and income streams afloat during this pandemic period.

In order to contain the virus, lockdown was ultimately the only option for the government to implement, and that would allow the health sector sufficient time to grasp a hold of the dire situation.

Given the recent announcements of the spike in positive cases by 20 percent from January, the 57% rate of infection in Nairobi and the estimated projection of more than 1 million people being infected by June according to Kenya Medical Research Institute (Kemri), made very few other options possible to safeguard human life.

The ripple effect is likely to have immediate monetary consequences that are bound to test the resiliency of businesses, employment and economic stability once more.

For instance, bars and restaurants have been hit by additional limitations on the in-house sale of alcohol and food.

This is a stinging blow to a sector that has endured persistent difficulties over the past year and that was just beginning to find its feet in a foreign, modified environment. In the tourism sector, local restrictions have handicapped the aviation industry after the Kenya Civil Aviation Authority (KCAA) directed that all local airlines in Nairobi are to ground flights.

As a result, hotels, national parks and local tourism destinations are likely to face another prolonged period of financial distress and employment layoffs amid a looming drop in bookings and reservations.

Having been unsure over whether to restart physical classes and exams, the education sector has also been thrown into disarray due to the closure of schools.

The future of education hangs in the balance as the government tries to engineer a way to fast-track e-learning to ensure that progressive education is still available, albeit through unconventional and abnormal channels.

Consequently, this will have an adverse effect on the financial sector, which is likely to experience higher rates of loan defaults and further repossession of assets. All these sequence of events will culminate in pay cuts and significant job losses, as was reported by a recent survey by the Kenya National Bureau of Statistics.

The survey showed that the number of unemployed people increased from 2.94 million by the end of March to 4.64 million by the close of June 2020 and in doing so, forecasting a worrisome trend of inactive workers.

With all this in mind, how is it possible for businesses and employees to weather the storm?

Remote Work Equals Job Productivity

Millions of people worldwide have started working from home because of the pandemic.

The increased push towards work-from-home mechanisms, policies and guidelines have allowed companies to adopt work-from-home rituals to avoid any further spread of Covid-19 in the workplace.

While this may signify a shift in working culture and may also present technical challenges such as the provision of infrastructure and service delivery, the long-term ramifications can prove to be fruitful for the sustainability of local businesses and the productivity of their respective employees. A happy employee is a productive employee.

Pivot to E-commerce Today

Adopting digital platforms, software and communication trends will now become a key ingredient in the DNA of global companies, given the surge in data and internet usage over the pandemic period. Large and small businesses can remain relevant by developing clear-cut digital channels for customers to purchase and in turn benefit from consistent revenue streams.

Now more than ever, Covid-19 has inadvertently demonstrated that physical limitations do not mean the end of the road, but instead, a diversion to innovative ways to work.

Use The Disruption To Regroup, Plan and Strategize

How has COVID-19 altered brand relevance, customer retention and customer acquisition? These are key discussion points for large and small companies to look into and reflect on in order to acclimate. Irrespective of the current inconsistent business cycles, self-examination of internal structures can lead to innovative, adept and versatile means of operating businesses that can be conducive to a pandemic period.

With the supplementation of a vaccine still in its infancy stage, this is a crucial period for traders to dissect new market trends, new customer behavior and efficiency of production/delivery of goods or services.

Multiple Streams Of Income

By now, it should be clear to the vast majority of the population that having multiple streams of income is a key contributor to financial stability and financial freedom. Covid-19 has been brutal and has clearly exhibited that the effects of a pandemic can result in the overnight closure of businesses and the loss of jobs.

If accepted, we are likely to see a shift in employers allowing their employees to take up more than one job at a time (a scenario similar to the current working environment in the United States of America).

For some, these restrictions have been an inconvenience and have drained the everyday joy that life has to give. For others, lockdown has been beneficial and has helped some people pay off debt, avoid ambiguous spending and make wiser investments.

For millions, however, these restrictions have brought about pain, have torn families apart and have accentuated the impact of inconsistent income.

Through all this and with the help of possible government subsidies, constructive business analysis would be ideal to constitute, implement and help provide a route back to a healthy trading environment.

By Kagwe Kibugu

Senior relationship Manager

Equity Bank Kenya