PwC's COVID-19 CFO Pulse

Globally, slightly over half (53%) of CFOs now expect a decrease in revenue of up to 25% as a result of COVID-19. And when asked to estimate how long they would take to get back to “business as usual”, there is a clear shift of CFOs favouring a longer timeline, since the start of the survey. At the start of the global survey in March 2020, 75% of respondents estimated that it would take less than three months for their business to return to normal, but now, 62% of them believe it would take more than 3 months. 

We see a correlation between these findings: Territories that are less optimistic in their assessment of the financial impact from the crisis tend to expect it will take longer to recover. 

In Malaysia, the Recovery Movement Control Order (RMCO), which marks Malaysia’s entry into the ‘exit strategy’ phase from the Movement Control Order, will last up to almost 3 months. Coupled with reduced consumer spending and a cloudy business outlook, this suggests that Malaysian organisations are expecting to continue operating in a challenging environment  for a while. 

Such sentiments are to be expected as the stabilisation wave of companies’ COVID-19 response is likely to be long. Even as restrictions slowly continue to lift in some countries and territories, the economic fallout of the crisis is still widespread. 

When asked about financial actions their companies are considering as a result of COVID-19, implementing cost containment remains the top financial action of choice (81%), followed by deferring or cancelling planned investments (56%). Facilities/general CapEx remains the investment type where organisations would most likely cut back on (82%).

Health and safety concerns remain top of mind. CFOs continue to favour protective measures when transitioning to on-site work, including changing workplace safety measures and requirements such as wearing masks and offering testing to employees (75%) and promoting physical distancing through reconfiguration of worksites (72%). 

Similarly, as Malaysian organisations continue to operate under the RMCO, the onus has been placed on them to ensure that employees comply with the new Standard Operating Procedures at their workplace.

This is in line with the global survey finding that CFOs are most confident in tactical measures to ensure the safety of customers and employees, compared to other 'return to work' activities.  

However, it’s promising that organisations are also warming up to remote work.

75% of CFOs globally think work flexibility (in terms of hours, location) will make their company better in the long run. 52% of global respondents say they are planning to improve the remote working experience, and another 52% say they are planning to make remote work a permanent option for roles that allow it.

This could meet the increasing appetite for work-from-home or flexible working arrangements in line with the growing trend of agility in these unique times.

Reduction in productivity used to be among global CFOs’ top 3 concerns at the start of the Pulse survey in March 2020. Now, they are more likely to be worried about the impact of the economic downturn (60%) and a potential new wave of COVID-19 infections (58%), with only 13% of CFOs worried about productivity. 

In Malaysia, several economic and financial stimulus plans have been announced to support people and businesses through this challenging time, including the recently announced RM35 billion Short-Term Economic Recovery Plan (PENJANA). 

And given the shift from globalisation to regionalisation and localisation, there is a need to look towards building stronger ASEAN integration. As a nation whose economy relies heavily on exports, businesses and the government can play a part in stimulating the recovery of supply chains and ramp up trade flow as highlighted in our recent publication, ‘Restart Malaysia’. 

While a vaccine remains to be found, a new wave of infections is an inescapable possibility of the new normal. Contact tracing is one of the conditions of resuming daily life. 

The government is encouraging downloads of the MySejahtera app for contact tracing, for example, offering RM50 e-wallet credits to Malaysians that download the app. Organisations can also play their role by encouraging employees and visitors to participate in contact tracing.