What is the effect of COVID-19 corona virus on Outsourcing Companies in India?
COVID-19. This is the most buzzing and booming word in the world at the moment. There’s a huge and severe impact of coronavirus or Covid-19 on domestic and international businesses across countries and sectors. The effect of the Covid-19 pandemic in human life is incalculable and it continues to grow in the world.
Many Indian IT companies have asked their employees to work from remote locations via video conferencing and collaboration tools seamlessly. They are testing their systems before they can implement any widespread measure to allow their lakhs of employees to stay home. But the spread of coronavirus to multiple cities in India could result in shutting down, requiring broader work-from-home (WFH) authorizations.
Since IT companies are spread overseas, they have been keenly aware of the impact of Covid-19. The growth of IT sectors has fallen down to 3-8% for the next financial year as per the Kotak Institutional Equities. Due to the impact of Coronavirus pandemic, the trade impact for the country - India is estimated to be about $348 million and the country figures among the top 15 economies most affected as per the UN report. And India’s information technology (IT) industry has been minimally impacted by $185 billion. As per the official report, it’s also expected to be a hit of 0.3-0.5% on the GDP in the next fiscal year and growth in the first two quarters of the next fiscal could be as low as 4-4.5%.
courtesy: The Economic Times
Impact of COVID-19 on IT Industry
The Coronavirus has impaired the ability to manage day-to-day service delivery for certain clients or at certain sites and result in, among other things, losses of revenue and inadvertent breaches of client contracts if a group of employees who serve the same customers was unable to work at the same time.
The IT industry has been facing a crisis due to coronavirus pandemic, with organizations shutting workplaces, stores, and processing plants. Many companies in India - Wipro, Google, Microsoft, and many took a step to make life easier for those who are required to work from home, giving away advanced streaming tools to avoid further spread of the deadly virus.
There are several factors that Covid-19 has made the industry disabled with its attack.
1) Dealing with Decreased Productivity and Performance
The virus is likely to impact productivity on a group and individual scale. Employers may need to adjust sales and/or bonus targets in some situations to account for unforeseen circumstances and consult their sales plans to determine the parameters. Handling day-to-day productivity and performance-related issue is tied to the outbreak in the current scenario.
Workers from small and medium enterprises (SMEs) are the worst hit in India. Since some of them cannot work from home or utilize the remote working facility, the companies have waived those employees and cut down their production. This way, it has a huge impact on the production and performance of their businesses.
2) Fallout Disrupts Global Supply Chains
Understanding how global manufacturers or let’s say, IT industries are managing through disruptions to their supply chains will help all businesses structure their own responses. As we can see, impacts in many companies across many industries are inevitable. As per today’s circumstances, the cost of supplies from China may increase, stemming from overtime and expedited freight costs, as well as from paying premiums to buy up supply and hold capacity. Many industries in India are working through alternative sourcing strategies. It will not be an easy task to identify alternative supply scenarios.
However, the possibility of this situation being prolonged beyond a month or two cannot be ruled out. In the long term, the recovery of the supply chain will take a longer time, which will affect not only China and India, but also the global supply.
3) Facility and Office Closures
The Coronavirus is a grave challenge to our great nation. Our first priority is always the safety of our people. Some governments have imposed even longer closure periods to reduce the motivation for people to travel back from their hometowns to where they work during this critical period.
A few of our clients situated in the USA have experienced substantial local disruption and closure.
“Our work is not exaggerated at all as working in a completely remote team is a big gift. The effect of office closures caused too much for my business. Since we are in the industry of event ticket selling and covering the whole part of the USA. The events are either postponed or canceled which has affected my business - economically and human resources. Our business has seen an impact of 80% down-fall.” said one of our clients from the event booking industry from the USA.
4) Cash Flow Crisis for SMEs
Around 30% of SMEs have reported significant pressures on their cash levels as per the financial report. It’s a very big lockdown to businesses paying for supplies earlier than anticipated because of Coronavirus-related stockpiling and fears of deeper disruptions to transport links.
This has a detrimental effect on a company’s working capital and they will not survive more if they were unable to secure some finance.
5) Not Ready For a Fully Remote Workforce
Many organizations think they are capable of allowing their employees to work remotely and adapt to the work-from-home culture fully. But now that work from home function has become a mandate for many, they have found a lack of collaboration tools and interpersonal training.
A report by Gartner, a leading IT service management company, says that 54% of the companies in India do not have enough technology and resources for employees to work to home.
The non-IT companies or small businesses seem helpless due to old systems, poor network connectivity, and UPS backup. More than two-thirds of employees lack access to business tools like Skype, Zoom, etc.
How are Software Outsourcing Companies dealing with Corona Virus
Organizations and enterprises are trying to find their zone in the chaotic circumstances created by the coronavirus like being enforced to implement the remote working atmosphere while remembering productivity, a big challenge for the companies that usually don’t let people work remotely.
1) Permitting For Remote Workplace
When needed, create a distributed workforce and allow your employees to work remotely. As a top-notch IT company in India, we will also make sure, our employees should not come in touch with any public transport or co-workers, as it reduces the risk of infection. This type of social distancing and remote working practices will not let Covid-19 harm us.
Also, the Government of India has announced a number of preventive measures to minimize the entry and spread of coronavirus. From the ministers to IT owners have appealed to Indians to avoid mass gatherings.
2) Encourage Sick Employees to Stay Home
Staying home being sick is a “stop the thread” tip that can be particularly difficult to follow, either because people have no sick leave or they feel otherwise compelled to show up and tough it out.
During this tough time, we strongly encourage employers to reconsider having people come to work when sick and develop non-punitive leave policies.
If you can see any minor symptoms of fever or illness, recommend your employees to stay home and not come to work until they are free of fever for at least 25 hours. Employees should notify their team leaders and stay home if they are sick.
3) Managing Business Travel
You should not allow your employees for business travel in the current situation. If there’s a business travel necessity, be prepared to articulate it and offer additional support to the traveling employee. If an employee is not comfortable about traveling anywhere, avoid requiring that particular employee to go.
4) Train Your Leaders
It’s believed that in many organizations, managers or leaders are lacking respect for normal working hours. While working remotely. Leaders need sensible rules about when they expect workers to be available - and when they don’t.
Nurture and train the employees and leaders who are the most crucial to maintaining business continuity. Make sure, they are aware of the latest tools and technologies to work effectively from home, if it’s needed. Ensure they are prepared for every scenario.
5) Train with Modern Digital Skills and Tools
Multinational tech companies in India are also taking precautions and depending more on remote collaboration tools. Many companies are adopting Skype and Zoom, among other facilities, to work remotely.
During this tough time, Microsoft has seen a 500% increase in the usage of its collaboration platform Teams.
We should try to implement innovative new tools, establish important new skills, shift culture digitally, and prepare for whatever is beyond Coronavirus and the current distractions it’s causing us.
Don’t Panic
Obviously, the Coronavirus pandemic is serious. But thoughtful and precautions must be taken to keep yourself and your teams safe and healthy. However, conducting meetings on the chat or video call is the first step to spreading Covid-19.
As a reliable partner, The One Technologies would love to support all our customers, who are actually looking for advice on remotely working or handling teams remotely as COVID-19 is continuously disrupting the business. We really wish all our partners and customers remains secured during this COVID-19 pandemic.
