13 August 2020

How the COVID pandemic has changed Australian businesses

The Australian Bureau of Statistics released June 2020 survey findings on how the COVID-19 pandemic has affected businesses in Australia. The report, based on a survey of 2000 local businesses, delivers a snapshot of COVID impacts. Here’s a summary of the key changes to business – how does your business compare?

Key take outs

  • Almost ¾ changed business operations across small to large organisations
  • ⅔ accounted revenue decreases compared to same period last year
  • 60% of businesses sought external advice in response to COVID-19 – mostly about government support programs and about safety and compliance requirements
  • The top 3 sectors that reported the most change to product, service offerings and staffing were
  1. healthcare and social assistance (77%)
  2. food service and accommodation (72%)
  3. education and training (64%).

28 July 2020 - ABS findinsg_Blog image_1.3
Topics covered in this report include

  • modifications to business operations
  • external advice sought by business – the subjects and sources
  • changes in business revenue compared to same time last year
  • length of time business operations could be supported by available cash on hand.

Majority of businesses have modified operations

Almost three quarters (73%) of all businesses canvassed reported that they were operating under modified conditions due to COVID-19, compared to 70% in May 2020. By employment size, the proportion of businesses operating under modified conditions were

  • 90% of large businesses (200 or more employees)
  • 85% of medium sized businesses (i.e. 20‒199 employees)
  • 72% of small businesses (0‒19 employees).

The types of modifications made most commonly were not surprisingly, new health safety hygiene protocols and practices (65%), followed by limitations to the number of people on site (57%).


Industry sectors that made the most changes

The sectors most involved in making changes to the types and range of products and services offered or the way they are delivered to customers were

  • food service and accommodation (78%)
  • healthcare and social assistance (70%)
  • education and training (64%)
  • arts and recreation (58%).

The sectors that made the most changes to staffing were

  • healthcare and social assistance (77%)
  • food service and accommodation (72%)
  • education and training (64%)
  • scientific and technical services.

 coming-to-work-mask-covid-business

Most businesses sought advice about how to respond to COVID

Three in five (60%) businesses sought external advice in response to COVID-19. The most popular topics were

  • 52% availability of government support programs
  • 45% regulations and compliance requirements
  • 39% health and safety
  • 32% financial management.

 External advice included obtaining information online or in print, such as regulatory information or guidelines, or paid or unpaid direct consultation with individuals or organisations outside of the business. Sources included private organisations, government agencies or customers.

 
Decreased revenue: sectors most affected

Two thirds of all businesses canvassed reported revenue had decreased compared to the same time last year.

Some sectors were more affected than others. More than half of businesses with decreased revenue in accommodation and food services (63%), arts and recreation (60%) and information media and telecommunications (53%) reported 50%+ declines in revenue compared to the same time last year.

Outlook for sustaining operations

Three in 10 (30%) small businesses reported that their reserve of cash on hand would support business operations for less than 3 months, compared to 24% of medium sized businesses and 12% of large businesses (200 or more persons employed).

The industries with the largest proportion of businesses that reported their cash reserve would support less than 3 months of operations were professional, scientific and technical services (42%), accommodation and food services (42%), and the transport, postal and warehousing (40%) sectors.

 

Update your business risk profile and insurance coverage

As businesses continue to face change and different risks, it’s important to consider your insurance cover, along with your risk exposures and management.

Your insurance broker will be able to assist with identifying these changing business risk factors, advising on management strategies and updating your insurance program accordingly so that your business isn’t left exposed if the need to make a claim arises.

Gallagher has a range of information and services to support businesses in staying COVID safe and compliant with government regulations, including specialists in people and workplace risk.

 

Connect with an expert

 

Further reading

Pandemic preparedness

Businesses shouldn't cancel essential protections just to cut costs


Additional information

Australian Bureau of Statistics Business Indicators, Business Impacts of COVID-19


Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient’s industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers’ control.

Gallagher publications may contain links to non-Gallagher websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by Gallagher, as we have no responsibility for information referenced in material owned and controlled by other parties. Gallagher strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

Insurance brokerage and related services to be provided by Arthur J. Gallagher & Co (Aus) Limited (ABN 34 005 543 920). Australian Financial Services License (AFSL) No. 238312