How Coronavirus impacts the global business outlook

At this present time, some might believe that the world has seen the worst epidemics. Yet, with the surge in population, travel, trade, migration and climate change, a new era in the risk of epidemics has begun. In short,globalization has made the world more vulnerable. Despite advancements, the world remains ill-prepared to detect and respond to disease outbreaks. This poses a major threat to the world. There is now a level of risk that businesses have to concentrate on.

As of this writing, there are more than 90,000 confirmed cases and 3,086 recorded deaths of the coronavirus disease 2019 (COVID-19). It has now spread to 76 territories after it was first identified in Wuhan, Hubei in China on December 31, 2019. The virus spreads from one person to another via respiratory droplets from coughing or sneezing. Symptoms may include fever, cough, diarrhea, muscle pain and shortness of breath. At present, there is still no vaccine or specific antiviral treatment for the virus.

According to the World Health Organization's (WHO) description of pandemic phases, coronavirus is only a step away from being a pandemic. Aside from China, countries like South Korea, Italy, and Iran have now become hotspots for COVID-19. While it remains unclear how far the virus will spread, WHO's Director-General Dr. Tedros Adhanom Ghebreyesus says the virus can still be contained.

Escalating impact on the global supply chain

The Chinese economy thrives as a manufacturing powerhouse. It is no wonder why this country of approximately 1.4 billion people is considered the world’s factory. News circulate about how COVID-19 disrupts worldwide manufacturing operations. Reportedly, manufacturing plants in China have decreased their operations since January. This happens as the country is in the midst of a trade war with the United States. World Economic Forum says China’s economic growth is expected to slow down to 4.5%in the first quarter of 2020.

The most affected companies are those that rely heavily on Chinese factories for parts and materials. On February 17, Apple announced it expected its quarterly earnings to be lower than expected. The company talks about the drop in demand in Chinese market. Apple also refers to the constrained global supply of iPhones. Some car makers including Nissan, Fiat Chrysler Automobiles N.V., and Hyundai temporarily closed factories outside China as they couldn’t get parts. UN’s International Civil Aviation Organization (ICAO) also forecasts that Japan could lose $1.29 billion of tourism revenue in the first quarter due to the drop in Chinese travelers while Thailand could lose $1.15 billion. European markets have closed for trading. All major indices have lost 3.5% or more amid fears about coronavirus spreading to Europe.

Threats of coronavirus to BPO firms

According to the BPO Services Global Industry Almanac 2013-2022, released in May 2018, the overall BPO services sector generated revenues of $144.9 billion in 2017. That represents a compound annual growth rate of 3.3% between 2013 and 2017. The market is expected to reach $140.3 billion by 2022. India, the Philippines,China, Mexico, and Brazil are some of the significant players in the outsourcing industry. The report also notes that the US is the largest global market for BPO.

In an episode of Outsource Accelerator Podcast with Derek Gallimore, lead consultant for emerging and reemerging infectious diseases at the WHO Weng Capistrano talked about coronavirus and its impact on the BPO industry. There are nearly 1.5 million Filipino workers in the BPO industry. Most of these employees share confined spaces in high-rise office blocks. They work around the clock with shift work and extra shifts in a high-pressure environment. This industry is prone to colds and flu. Thus, the impact is unimaginable if a major outsourcing company would close down in compliance to quarantine measures.

Most likely, businesses will be hit as several workers fall ill around the same time. Since the virus spreads during close contact, clustered workgroups are an easy target. Problems would also arise from mandatory quarantines, travel controls and limits on public gatherings. Absenteeism will also become prevalent. Not only among sick employees but also the healthy ones who will have to take care of sick family members. Similar to China,transportation might also be limited or worse, shut down.

How to work during an epidemic

Most companies have already taken precautions in response to the coronavirus outbreak. Some businesses may have limited their employees from traveling abroad. Others may have asked employees to stay at home when experiencing flu-like symptoms. In the US, American workers could soon be asked to work from home because of unexplained cases of the global outbreak. But for some employees who cannot afford to work from home due to the nature of their job, precautions should be followed. Capistrano discussed general safety precautions for employers and employees in the outsourcing industry.

  1. Human resources department should disseminate information about the virus. They must remind employees to observe personal hygiene and cough etiquette.

  2. Employers should perform routine cleaning in the workplace.

  3. Hand wash soap and tissue paper must always be available in comfort rooms and wash rooms.

  4. If an employee feels unwell with mild symptoms such as headache and runny rose, they must stay at home to rest. He or she must report sickness to the human resource department. If symptoms develop to fever,cough and difficulty breathing, they should visit a doctor for proper medication.

  5. Employees with respiratory illnesses are advised to wear a medical mask or face mask. This is so they can avoid infecting others as they sneeze or cough. This precaution applies to those who commute daily.

  6. For employees working in high-rise buildings,they should wash their hands and use alcohol rub after touching elevator buttons and doorknobs. They should also make sure that their works stations are always sanitized.

  7. Employees should try their best to have adequate rest and a balanced diet. They are also advised to exercise regularly.

  8. Ensure that sick leave policies are flexible and consistent with public health guidance.

  9. BPO companies should have clear action plans in the event of a flu outbreak. It is important to identify critical employee groups. These groups will cover crucial functions for the company during an emergency situation.

  10. Work-at-home systems should be in place.However, businesses should stay wary of scammers. Phone conversations or video conferences should be a protocol.

  11. Identify employees who are not easily replaced on short notice. There should be target individuals who can learn tasks fast.

The silver lining in the crisis cloud

ABS-CBN News Channel reports that despite interruptions caused by the COVID-19 outbreak, some BPO firms in the Philippines have seen increased number of service requests from international BPO clients. The outbreak has led some international companies to require additional BPO services from the country as they consider to set up business continuity plans.The British Chamber of Commerce of the Philippines also expressed confidence that the country’s businesses will be able to withstand the effects of the virus.

This crisis is calling everyone to pay attention to each other. It inspires us to become more resilient and to stand in solidarity. The epidemic takes its toll, but every cloud has a silver lining.

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