May 4, 2020

The current coronavirus pandemic raging throughout the world has had unprecedented consequences for most people in the UK.

Never before have businesses and individuals in the country been so restricted, both in terms of company operations and freedom of movement.

While the current lockdown rules are necessary to protect the UK's most vulnerable citizens, it's also unfortunately true that lockdown has already significantly impacted many businesses across the country.

The financial cost of lockdown

Businesses throughout the UK have had to close their doors to customers for an indefinite length of time following the Prime Minister's announcement of new lockdown rules in late March.

While the government has announced a package of measures including both grants and loans intended to tide businesses over until the end of lockdown, for many this is not enough.

Much of the government help is available as repayable loans, which isn't a very enticing prospect to business owners who are unsure whether their businesses can recoup these losses after lockdown.

Many UK businesses operate with slim profit margins, and for these companies, the recent lockdown restrictions will be catastrophic.

The future security of businesses around the country remains uncertain, too.

While stock markets have rallied somewhat since the devastating crashes witnessed in late February and early March, it seems increasingly possible that we are on the verge of a long-term recession.

The number of people signing up for Universal Credit has risen to 10 times the normal UK level since lockdown began, hinting that it could be some time before business is booming once again.

Problems in the supply chain

The COVID-19 pandemic has also highlighted vulnerabilities that have existed in the UK's supply chain for many years.

Before the disease even spread to the west, there were already hints that UK businesses could be hit hard by the knock-on effects of China's historic quarantine methods.

Most of Europe's manufacturing industry relies heavily on China for goods and components.

One of the worst affected industries is the automotive industry.

The Hubei province of China, the epicentre of the epidemic there, is home to almost 9% of China’s total vehicle production.

China's lockdown has already resulted in a global shortage of auto parts and the effects of this will likely continue well into 2020.

We've also already seen delays of new product launches in the tech industry, with smartphones and games console releases being pushed back due to problems with supply.

If there's one thing the new coronavirus outbreak has taught us, perhaps it is that we shouldn't be so heavily reliant upon one country for our supply chain.

Concerns over employee welfare

Businesses are also having to tread a fine balance when it comes to managing both operational costs and employee welfare.

It's well documented that the UK (and in fact, the world) is suffering from a shortage of PPE which is badly needed by key workers and staff on the front line, and yet many businesses must remain open to keep the UK functioning adequately.

While retailers in the UK have slowly implemented measures to keep staff safe, the number of workers both in the NHS and other industries who still feel unsafe going to work remains high​.

What's more, as lockdown restrictions are eased, the issue of employee health and safety will likely become even more problematic.

Current reports suggest that social distancing measures are likely to be required until at least Christmas, with some outlets suggesting the 2-metre rule will be in force until as late as 2022.

As shops, restaurants, and factories begin to reopen, the question of balancing employee and customer welfare with economical truths will be a difficult one.

How many restaurants can afford to operate at a quarter of the capacity they usually do? Likely not many. And yet, the safety of staff and customers must become paramount in businesses' reopening strategies.

If you're concerned by the impacts of coronavirus on your business and staff, you can contact us at Neathouse Partners Ltd. for advice and information about employment law and HR relating to your business during the coronavirus outbreak.

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About the author 

James Rowland

James is the Commercial Director at Neathouse Partners and regularly writes articles surrounding issues in HR & Employment Law. Outside of the office, James is a keen Cricketer, playing in the Cheshire League for Nantwich CC. He also loves going to watch his football team, Crewe Alexandra. Feel free to connect with James on LinkedIn.

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