Organisational survival has been top of mind for most South African businesses over the last year, that much is for sure.
Let’s be honest – things have been fraught, guys. It’s not every day that we roll out old-timey lingo like this, but there is a place and time for ye olde English and we believe that the precarious precipice at the potential beginning-of-the-end of a global freaking pandemic might be it.
Nobody was very surprised when the country ended 2020 on a less-than-peachy economic note. After all, the world at large was still in the midst of reeling from the punch in the gut that COVID-19 had dealt our lives and livelihoods when new waves of infections hit.
Travel links became tenuous and supply chains were put under enormous strain. Companies had to move whole workforces off site and adapt to new challenges like measuring employee performance remotely and helping dispersed teams to bring their A-game.
At the same time, social pressures rose as people became angry and frustrated about limitations on their civil liberties like being able to have a glass of vino or put their (un-pedicured) toes in the sand. Not to mention the fact that the producers of vino and the purveyors of pedicures were also rather curtailed in their ability to earn an income.
But by now, you know us. We don’t monger the fear. We seek the silver linings.
As such we are happy to report that, contrary to popular belief, the news is not all completely dire. According to the most recent SARB Quarterly Bulletin, a recovery in personal disposable income and consumer spending is predicted in Q2 2021, which will start to pave the way for a slow-but-steady economic revival, in time.
Of course, as a country we are far from being out of the woods. In fact, we’re only just stopping for a picnic in a clearing somewhere around the middle. However, that doesn’t mean that we can’t make moves to ensure that our businesses are able to move beyond mere organisational survival in the year ahead, to perhaps even see a semblance of growth.
Here are five things forward-thinking business owners should keep an eye on in the year ahead when it comes to making plans for the future:
1. Employee health and wellbeing
Burnout is a real thing at the moment. People are working themselves to the bone because they are scared of losing their jobs, and unscrupulous business owners tend to ride this wave all the way to the metaphorical beach and back. It can be tempting to take advantage of employees who are working ungodly hours in order to make themselves indispensable, but it never leads anywhere good.
Instead, take a firm stance by advocating for a healthy work-life balance, as well as recognising and rewarding your team for their hard work during a very trying time. Look after your people, and they will look after you as you take strides to grow your company.
Read more: Work-life balance is good for business. Here’s why!
2. What’s happening with debt
South Africa’s rising debt levels have us perched on a very precarious knife’s edge at the moment. The downgrading of the country’s credit rating makes it very tough for the government to propose plans to manage the rising debt tide, which was at 81.8% of GDP last year already.
With SA’s debt becoming a risky option due to the credit rating issue, lenders are demanding a much steeper rate of return when they put out capital. As such, it’s important to keep an eye on economic growth in the months ahead, and not to go into debt to grow or sustain your business in the meantime if you can help it.
3. What’s up with Eskom
Ai, Eskom, ai. If there is one state-owned enterprise that can really derail the future of SMEs, and even larger companies, in South Africa at this stage, it’s our much-harried power utility provider. With loadshedding (essentially rolling blackouts) reaching stage 6 last year (which means up to 6 power outages of 90 minutes or more at a time), things were looking dire.
However, CEO André de Ruyter is in the process of rolling out a reliability maintenance programme and there is talk of separating Eskom into three separate operational units to make it easier to manage. So, while there is hope that things may stabilise in future, it’s probably still a good idea to invest in a generator and UPS to keep the wheels turning at your business if the power continues to go out.
4. How commodity prices are faring
As always, the health of the South African economy, and the business sector at large, will remain tied to commodity prices. In RSA terms, this means keeping a close eye on two separate fronts – namely oil, which is imported, and metals and minerals, which is exported.
5. Interest rates and inflation
The South African Reserve Bank’s (SARB) Monetary Policy Committee has revealed that they voted for the reduction of the repo rate, cutting it down from 6.5% to 6.25%. In practical terms, it means that consumers with debt will now be paying a little bit less each month. Inflation is also quite well-contained, mainly due to the fact that there is not a lot of price or demand pressure at the moment.
Business owners will do well to keep an eye on these numbers as they decide how to move forward in an unpredictable market space. Some consumers may be loosening the purse strings, but others may keep their belts tight until there is more certainty in terms of economic revival.
There you have it – five key factors that will play a role in whether 2021 is going to be another year of organisational survival for South African businesses, or whether there will be scope for growth. Check back soon for more insights from the HR experts on how to make your team spirit recession-proof.
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