All hands on deck: how companies can survive coronavirus
Posted the 17 March 2020Suppliers cannot honour contracts, trade shows are cancelled, employees want to work from home, and you'll just have a product with ‘corona’ in the name. It's all hands on deck for businesses. Entrepreneurs testify how they are solving these eight pressing problems.
Is Working from Home the Miracle Solution?
To help combat the spread of the coronavirus, many companies are beginning to implement remote working. Companies that have already adopted this practice, like Deloitte Belgium, are ahead of the curve.
According to our information, no company has specifically stated in its employment regulations that employees can work from home in the event of an epidemic. This means that there is no clear legal framework for such a measure. As a result, companies cannot unilaterally impose working from home on everyone. Companies that already have provisions for remote work are at an advantage compared to those now beginning to implement it. To introduce remote work, companies must amend their employment regulations, which requires consultation with the union representatives within the company. This takes some time.
Consultancy firm Deloitte Belgium introduced remote work years ago. "Flexibility is part of our corporate culture," says Inge Diels, talent partner at Deloitte Belgium. There is no company-wide arrangement, but each case is discussed individually between the employee and the manager. "We try to adapt to the needs of our employees, especially the new generations who want more flexibility. But we must also ensure the continuity of our business," says Inge Diels.
According to a recent survey by Voka-Kamer van Koophandel of 1,500 Flemish companies in recent days, it appears that for two-thirds of businesses, it is not possible to have everyone work from home. Working from home is a form of telecommuting, meaning someone works outside the company's location. This could be at the employee's home, but it doesn't have to be.
You don't need to constantly watch over your employee's shoulder.
So, working from home is not a miracle solution, especially in sectors like industry or trade. Some employees are also hesitant to implement remote work. They fear that it will demotivate their staff and harm productivity. Won't the remote worker spend the whole day watching TV series instead of working? How can you see from a distance if the work is being done?
You need to manage based on goals, says Benoît van Grieken, partnerships advisor at HR service provider SD Worx: "It’s important to assess whether the employee has completed their tasks, but you don’t need to constantly look over their shoulder."
Van Grieken advises companies to provide their employees with digital tools to get their work done: "A shared electronic calendar with contacts, tasks, and handled files ensures that you know what the employee is working on, both at the office and at home."
Is a Virtual Meeting as Effective as a Traditional One?
The video conferencing setups in many companies were gathering dust in a back room, but due to the advice to avoid contact with others as much as possible, their usage has surged.
Telecom company Orange has turned as many in-person meetings as possible into video conference calls. This allows employees to stay in the office while meeting via video with people in other locations. This measure was adopted on a group level by Orange, and it applies to all countries where the company operates. For the provider, this is one of the main tools to control the epidemic. Most other large companies have similar recommendations.
The technology for video conferencing has greatly improved in recent years, following developments in telecommunications. People have become accustomed to applications like FaceTime, Apple's video calling program. Video conferencing has adapted to these changes, says Yashfeen Saiyid, responsible for advanced workplace products at Proximus. The telecom company offers a range of solutions. For a two-person internal meeting, a simple app is sufficient, while meetings with a dozen participants across multiple locations require setups with cameras, microphones, and TVs.
Alexandre de Saedeleer, managing director of the digital agency Tapptic, has held six-hour conference calls with the United States involving seventeen people. "To make this efficient, we’ve provided tools like a chat function to avoid people constantly interrupting each other," says De Saedeleer. "We also recommend our clients to acquire certain software or equipment to ensure the video conferences aren’t frustrating."
Human contact remains essential, but companies will increasingly turn to video conferences.
The digital agency Tapptic now allows its employees to work from home two out of three days and uses collaboration platforms like Slack, Google Drive, Microsoft Teams, and Zoom. With these tools, colleagues can still collaborate online remotely. Slack, for example, which reports 12 million daily users, saw its stock price rise by 25 percent in a month.
The latest technology for video conferencing has become much more user-friendly. Meeting participants can exchange messages through an integrated system and share and co-edit documents. For meetings with international participants, voice recognition technology now automatically generates subtitles. Some systems even allow meetings to be recorded, automatically noting everything that was said.
Belgian SME AlloCloud is now offering its web meeting platform for free to its clients. Large companies like Google and Cisco have removed the limits on their free video conferencing versions. The Chinese company Zoom, whose stock price rose by 40 percent in just a few weeks, has eliminated the time limit for virtual meetings with two participants. From now on, you can meet virtually for more than forty minutes.
Will traditional meetings disappear? "Human contact remains essential, but companies will increasingly turn to video conferences," says Yashfeen Saiyid of Proximus. "What’s happening now proves that companies need to continue investing in tools to ensure the continuity of their business and make it easier for their teams to collaborate. If companies don’t develop their own tools, employees will turn to public messaging apps like WhatsApp for their professional contacts."
How Can I Protect My Staff?
Are companies taking the right steps to protect their staff during an epidemic?
Companies are taking measures to improve hygiene and reduce travel and meetings. They are doing this to protect their employees, but it is also a legal obligation, says lawyer Christophe Delmarcelle.
Whether they employ 10 or 5000 people, companies must ensure the well-being, health, and safety of their staff. As the new coronavirus spreads in our country, companies must take preventive measures. "The law of August 4, 1996, and the Occupational Health and Safety Code state that employers have significant obligations in terms of prevention and risk analysis," warns Christophe Delmarcelle, partner at the DKW law firm, specializing in labor law. "Those who do not comply with these rules can face criminal penalties or civil liability."
The majority of companies have already taken measures. From clear guidelines about handwashing to providing alcohol gels and very specific hygiene measures. "Engie cleans the shared spaces more often, the coffee corners, door handles, and elevator buttons," says Anne-Sophie Hugé, spokesperson for Engie Belgium. "We have also adjusted the air conditioning in our buildings to work with fresh air rather than recirculated air." This is an example of a measure that most companies can easily implement. Like most companies, Engie has also significantly limited all business travel to risk areas—not just China or Italy, but also France.
Can an employer force an employee to take their temperature?
What if someone still wants to come to work? The employer can deny access to the workplace based on suspicion or certain signs, says lawyer Christophe Delmarcelle. "But such a refusal can lead to the termination of the employment contract, even with pay retention. So it's better to agree with the employees on what work they can do from home or that they remain on paid quarantine."
Delmarcelle also points out that not everything is allowed to protect employees. "Under the law of January 23, 2003, the employer cannot impose a medical examination, except for safety or surveillance jobs. In any case, only the prevention advisor or the company doctor is authorized to carry out that examination. So an employer cannot force an employee to take their temperature before returning to the company. Of course, the employer can ask the employee if they want to measure their temperature themselves or ask the prevention advisor to impose this if deemed necessary. It is also helpful to remind employees that they should not do anything that puts themselves, their employer, or others at risk."
How can I search for new clients during an epidemic?
Tokyo, Singapore, Barcelona, Bologna, Hannover—one trade fair after another is being canceled. The time and money companies save by the cancellation of a fair can now be spent on their digital marketing campaigns.
Lasea, a manufacturer of laser micromachines, is trying to turn the coronavirus crisis into an opportunity. "We started digital marketing two or three years ago, and now is the time to take it to the next level," says Violette Marbehant, who handles sales and marketing at the Liège-based SME Lasea. "We will improve our Google search engine optimization and increase our paid campaigns. We'll then see what results that brings."
Trade fairs themselves are also jumping on the digital bandwagon. Bio Spring Europe was supposed to bring together the top players from the pharma and biotech sectors in Paris at the end of March, but that will not happen now. Or will it? The organizers have announced that they will host "the world’s largest digital event in life sciences." Such digital trade fairs already existed as a supplement to the traditional event.
In addition to digitalization, Lasea is also trying to find customers in new sectors. The SME, which employs 80 people and generates 12 million euros in revenue, is currently heavily reliant on Swiss watchmakers. "We've already felt a slowdown since the political issues in Hong Kong, the main export market for Swiss luxury watches," says Jean-Christophe Wauters, responsible for sales and marketing at Lasea. "Even though 60% of the production costs must be generated in Switzerland, the rest of the costs are made somewhat everywhere, especially in China. If there is scarcity at the supplier, the watchmaker cannot assemble their watches anymore. We already felt that investments were being slowed down. Fortunately, we decided earlier to diversify. We are focusing primarily on microelectronics in the medical sector. The current crisis is a confirmation that this was a good choice."
How do I keep logistics for export running?
Mydibel, an SME specializing in the development, production, and marketing of potato products, exports 55 percent of its production outside the EU.
The family business works with maritime transport, using refrigerated containers, known as reefers. "On a ship, about 15 percent of the space is reserved for frozen products," says Marc Van Herreweghe, CEO of Mydibel. "When many ships are blocked in the ports of China and other countries, it becomes difficult to find ships to send our products. The coronavirus is already the second issue, after African swine fever, which also disrupted maritime transport significantly."
"It’s important to anticipate what’s coming."
Alternatives are not easy to come by. Air transport is too expensive, and new maritime routes don’t appear overnight. "We manage, but it costs us money," says the CEO of the Mouscron-based company. "We will see in a month or two whether we need to slow down production. For a company like ours, I think we will be fortunate to talk about delays but not the loss of some sold products."
Van Herreweghe takes it philosophically. "It’s the manager's job to solve problems that arise suddenly," he says. It’s also important to anticipate what’s coming. The CEO is therefore carefully studying alternative routes to export his potato products to Asia. Mydibel exports its products to 120 countries but not to China. The SME had a turnover of 250 million euros last year and is building a new factory, which is set to open this year. In this new building, the workforce will grow from 650 to 725.
How can I restock now that production in China has stalled?
The coronavirus epidemic is pushing the logistics production chain, which has become commonplace over the last twenty years, to its limits. Many companies will likely start holding larger stocks in the future.
"Companies will need to think about the costs associated with holding larger stocks," says Mikael Petitjean, professor of finance at Louvain School of Management and chief economist at Waterloo Asset Management. "Companies will undoubtedly consider how to budget for a larger inventory. That’s not good news because larger stocks mean more dormant money. It costs a lot and impacts the valuation of your company. Moreover, you run the risk that your stocks may lose value if technology evolves or demand changes."
"We feel the increased stress from the companies that supply us."
The Liège-based imaging technology group EVS is taking a cautious approach. "We are closely monitoring the situation with our suppliers," says Yvan Absil, CEO of EVS. "We had to deal with a factory closure in China, but the factory has since reopened. We feel the increased stress from the companies that supply us. Their stocks are shrinking, and delivery delays are increasing. About 20 percent of deliveries are late, not always due to reasons linked to the coronavirus. So far, this hasn’t had an impact on us. We can still deliver our products because we have enough stock to last until mid-year."
Yvan Absil explains that EVS has always strived for a balance between the benefits of just-in-time deliveries and those of sufficiently large orders to receive discounts. "We are now looking at what additional stock we need to guarantee deliveries in the second half of the year if problems persist," says Absil. EVS has already placed orders earlier than planned with the reopened Chinese factories and is diversifying its suppliers. However, Absil immediately notes that diversification is not a magic solution. The various suppliers often buy parts from the same company.
This diversification is not feasible for every company, as shown by the experience of Philippe Bolle, CEO of Skylane Optics. This technology company specializes in transceivers, which translate the light signal between fiber optics and network switches. "In our field, everyone sources from China, so we all feel the impact," says Bolle. "Our production is currently delayed. Due to the coronavirus, many companies (in China) were placed in quarantine for a month. Some companies are still closed, and many factories that have restarted are operating at only 10 or 20 percent of their capacity. What makes it worse is that I might not be able to deliver to my own customers because they might also be in quarantine."
Even if Skylane Optics finds other suppliers, it can’t simply start working with them. "Our products are authenticated and certified," explains Philippe Bolle. "Our contracts with telecom operators specify that we supply them with very specific materials from a certain supplier. We can’t just change that. We could increase our inventory, but that still doesn’t solve the core of the problem. We will still be dependent on China."
The CEO of the Namur-based SME dreams of bringing some production lines back to Europe. "But unfortunately, there are no investors willing to take that risk," regrets Bolle. "Other high-risk sectors, such as biotech, have received huge public funding. In the telecom sector, that’s not the case."
How can a brand maintain customer trust?
What can brands, especially those with "corona" in their name, do to reassure their customers? Humor is rarely the best solution, especially when people are dying.
When the beer brand Corona took a humorous approach three weeks ago to introduce its new range, outraged reactions quickly appeared on social media. At that time, the coronavirus was mainly affecting China, not the US. The brand made the poor decision to reference the impending arrival of the virus with the slogan Coming ashore soon and a picture of the cans on a beach.
The negative buzz the Mexican beer brand created was immediately felt. The stock of the producer Constellation Brands, owned by the AB InBev brewery group, lost 10 percent of its market value in one week. According to surveys of the American public, the brand's reputation also dropped. Meanwhile, the brand has adopted a much more discreet approach.
"Companies with a name that sounds similar to 'corona' are best off letting it pass," says Emmanuel Goedseels, co-founder of Whyte Corporate Affairs, a communication agency specializing in crisis management. "Such a brand needs to be very careful with the advertising slogans it uses, but it shouldn’t go into complete oblivion. The key is finding the right balance between downplaying and business as usual on one side, and over-communicating and putting the brand under pressure on the other."
The Belgian insurer Corona Direct has found that balance. It did not suspend its ongoing advertising campaign, says spokesperson Ulrike Pommée of Belfius, the owner of Corona Direct. "I’m convinced that 99 percent of people distinguish between a virus and a brand they know well," says Ulrike Pommée. "That’s why we decided to continue the campaign, especially since the current crisis has no impact on the results. We must avoid panic and continue our activities."
"Companies with a name that sounds similar to 'corona' are best off letting it pass."
The irony is that the posters at bus stops for Corona Direct feature the slogan "For everyone!" Yet, the brand doesn’t seem to be criticized on social media. What's the difference with the beer brand Corona? "It’s not so much about the communication itself, but about the product," says Thierry Bouckaert, CEO of the communication agency Akkanto. "You really need to distinguish between the two products. In my opinion, Corona Direct suffers much less from the situation because an insurance product is purchased much less impulsively than food. You don’t buy insurance every day. Also, an insurance policy is much less tangible than beer sold in a supermarket that you bring to your mouth to drink. That plays a role too."
A franchisee of Shop & Go, a Delhaize brand, also initiated a humorous promotion two weeks ago on their own, offering 'two Coronas bought, one Mort Subite free.' The promotion was quickly picked up on social media, but Delhaize asked the franchisee in Ixelles to retract the promotion. "We understand that store owners often want to communicate in an original way and have good intentions, but we cannot accept everything," says Aude Mayence, marketing manager at Delhaize.
How to avoid cash flow problems?
Canceled deliveries, a stalled production chain, staff on standby— as measures to contain the epidemic spread, the consequences for businesses also increase. Not only does revenue take a hit, but liquidity problems may arise as well. When no one buys or delivers, a company still has to pay its staff. How do you handle this?
"In the vast majority of cases, companies have unused credit lines, which they can now tap into, allowing them to handle the problem on their own," says Pierre Gustin, Director of Business and Government at ING Belgium. Those without a credit line can, according to Gustin, talk to their banker about a loan. "The conditions are that the banker knows the client well, that the issues are one-time and temporary, and that the company is not already at the borrowing limit," Pierre Gustin explains. The banker expects that the problems will be manageable for the first month, but that the most vulnerable businesses will face difficulties afterward.
Martine Klutz, Chief Strategy & Marketing Officer for businesses and governments at Belfius, knows of a few alternatives besides credit lines. "It is known that Belgium is an open economy, with companies focused on exports. In general, I have the impression that counterparty risk (the risk in a transaction that the other party cannot meet its contractual obligations) is being adjusted upwards. It doesn’t matter whether the counterparty risk is a credit or exchange risk."
"The epidemic has a much broader reach than the terrorist attacks."
What questions are customers still bringing to Belfius? "They first want to know how we can secure their commercial transactions and how we can cover international transactions, for example, through foreign exchanges and documentary credits (a safe way to secure income)," says Martine Klutz. In any case, don’t wait too long to approach your banker, says Pierre Gustin: "There’s nothing worse than having to urgently call your banker because you need 200,000 euros to pay wages tomorrow." In that case, also inform yourself better about when your employees will receive wages, unemployment benefits, or nothing at all.
The government is also stepping in to help businesses. At the beginning of March, the government announced support measures for affected businesses. For example, the government is making it easier for businesses to recognize temporary unemployment due to force majeure, and entrepreneurs can pay corporate taxes, payroll taxes, VAT, or personal income taxes for self-employed individuals in installments. This is only the case if the coronavirus is the reason for the company’s issues. On Monday, the EU also announced a stimulus package of 180 billion euros to support businesses. "We must work hard to avoid companies going bankrupt," said Finance Minister Alexander De Croo (Open Vld).
Even after the terrorist attacks in Zaventem and the Brussels Region, measures were taken to support the economy. However, there are both similarities and differences between the two crisis situations, says Marc Van Muylders, Chairman of Horeca Brussel: "The attacks were very brutal and localized. It was about restoring trust. The epidemic has a much broader reach, and trust will only return when the crisis is under control."
Related articles
Does Audi Brussels have the right to terminate the information phase of the ‘Renault proceedings’?
In connection with the closure of the Brussels site, management has unilaterally ended the information and consultation phase. The unions are protesting. Is this legal?
By Christophe DelmarcelleCivil Servants, Under Statute or Contract (Trends, 26-12-2024)
The gradual contractualization of civil servants has been a reality for over a decade at all levels of government. However, the question of the definitive abolition of the famous "statute" of civil servants justifies a societal debate and undoubtedly a reminder of certain truths about this statute and the comparison with a permanent employment contract (CDI).
By Christophe Delmarcelle