While Kern County’s unemployment rate has dropped to its lowest level since March 2020, many companies are still dealing with the acute impacts of the economic and social disruptions of the last year. Innovative companies can apply what they’ve learned to excel in 2021. Here are four ways that companies can build resilience, and weather future challenges, while being better positioned to capitalize on emerging opportunities.
Financial discipline isn’t just for hard times
A thorough, proactive review of internal processes and key relationships can help protect your company. For example, cash flow issues are a common source of business failure, so it’s important to examine your supply chain and customer base for vulnerabilities that could impact your business and review customer payments to identify issues before they become larger problems.
Cutting expenses in a defensive and reactive posture can have unintended consequences. Instead, create “what if” scenarios now and plan allocations for each. If the time comes, you can respond with a thoroughly vetted plan.
Don’t let uncertainty deter you from growth
The M&A market shifted in 2020 due to the impact of the coronavirus and widespread digital transformation. Companies with strong working capital and cash reserves could have a significant opportunity to put that to work through a merger or acquisition, especially if they have limited debt.
If your company is not in a position to pursue M&A activity, develop a strategic plan for future growth. Start by identifying the top opportunities facing your company right now, whether it’s market expansion, reaching a new customer segment or digitizing more of your business model. Consider potential hurdles you’ll face in pursuing these opportunities as it will help you formulate an actionable, prioritized plan specific to your situation.
Make cybersecurity a business-critical priority
Cybercrime is more of a risk in today’s remote work environment, so companies must prepare themselves. Criminals realize that workers are less protected when working remotely and are launching malware campaigns targeting people with insufficiently secured devices. To reduce vulnerable attack surfaces in your company, look to strengthen mobile device management, ensuring security tools and protocols are in place.
Companies should also update and enforce a security policy for remote connectivity. Policies should provide guidelines on the safe use of public Wi-Fi, prohibit workers from transmitting sensitive information and require the use of VPNs and well-protected home routers. Finally, cybersecurity training can teach employees how to put essential safeguards in place while keeping cybersecurity top of mind across the company.
Invest in your employees
Just as you’re taking steps to safeguard cash flow and business operations, it’s essential to protect the wellbeing of your employees. Management should support employees even more holistically and proactively than before. Leaders can schedule more frequent communications with staff and play an active role in broader wellness areas like financial stability and mental health.
Comprehensive wellness programs that support employees’ physical, mental and financial health are more important than ever today. The percentage of employees who rate their financial wellness as good or excellent declined from 61 percent in 2018 to 49 percent in 2020, and as many as 57 percent of employees feel their well-being has a great impact on their productivity, which could have major ripple effects on a company’s health. Financial wellness tools and education should cover a range of needs including saving for retirement, planning for healthcare costs, budgeting, saving for college and managing debt.
While no one can predict what’s to come in 2021, these lessons from 2020 can help companies reignite growth and plan for financial success in the months ahead.
Mark Riley is the business banking regional executive for Bank of America.