Presented by Wells Fargo
Depending on who you ask, local business leaders have vastly different views about the current pace of the post-pandemic recovery. Some industries weathered the past year and a half better than expected and emerged on solid footing. Others, like transportation, logistics, and travel, experienced dips but now are surging toward an increasingly profitable year. Yet others, including manufacturing, equipment dealers, and food distribution, remain bogged down by labor and supply shortages, struggling to meet demand.
In short, according to local execs we’ve spoken with, Chicagoland’s business recovery is uneven. However, the unavoidable changes to the way companies do business post-pandemic are relatively consistent. Despite ongoing challenges, there are steps companies can take to better position themselves for the remainder of 2021 and beyond.
Take Advantage of Liquidity
Lots of liquidity is sloshing around in the system. Companies we work with that held back on large purchases and expansion are flush with capital. Interest rates remain relatively low, making vital cash needed for recovery affordable. Banks, like Wells Fargo, are open for business and ready to lend to those who qualify. This creates an optimal environment for mergers, acquisitions, and divestitures. To take advantage, companies should consider ways to create more options, giving them more flexibility to grow. For instance, is it a good time to purchase a competitor? Would expanding into additional markets or introducing new product categories right now make sense? Broadening your scope of thinking could lead to surprising opportunities for growth.
Get Creative with Job Incentives
A record 4 million people quit their jobs in April alone, according to the U.S. Labor Department. In speaking with local companies, business leaders tell us that some once-strong company cultures have dissipated due to distance, and a sense of disconnection grew during the pandemic. Young employees became free agents lured by recruiters. And tenured employees, grateful for the job security in the time of crisis, are now bolting for the exits. Leaving is easier to do when connections to co-workers and day-to-day company culture have frayed. The spike in turnover has unsettled the best of companies, with many struggling to fill positions. The number of job openings reached a series high of 9.3 million on the last business day of April, the U.S. Bureau of Labor Statistics recently reported.
Companies must think outside of the box to coax new workers and convince long-term employees to stay. Cush benefits, such as unlimited vacation and bringing pets to work, previously a rarity in the workplace, are now expected. To become a ‘destination’ company today, business leaders are finding ways to improve employees’ quality of life through tangible incentives and inject more fun and flexibility into the workday.
Diversify Supply Sources
During the height of the pandemic, it made sense to keep inventory levels low. As demand swings back, companies tell us they are having trouble sourcing the product, supplies, and parts to fulfill demand. The days of depending on a single supplier for necessary components are over. Companies that want to avoid similar challenges in the future are lining up multiple sources to meet their ongoing and future needs. Some are even purchasing the domestic suppliers they depend on or switching to multiple local suppliers to avoid leaning heavily on overseas imports in the future.
Plan for Succession
Building a solid succession plan is key to preserving your company’s legacy, culture, and future. Talent and succession planning should be at the forefront of companies’ visions for future viability and growth, especially those that are family owned. What happens when the current leader or key executives retire? Do you know the dreams and goals of your top talent? Could incorporating professional development and training help ensure a deep bench of future leaders to carry your vision forward? If you have not considered these questions before, there is no better time than now.
Use Technology to Enhance Security
Now is also the opportune time for a cash-management technology checkup. Cybersecurity concerns plague every company across every industry, no matter the size. Protecting company and customer financial data should rank among your top priorities. Talk to your banker about the latest and greatest financial cyber security measures, including ways that enhancing your current financial systems can help keep data more secure. Digitizing back office payments and receivable systems can also affect the bottom line. Many treasury management tools not only help improve cash flows by getting receivables sooner, they can help you make and keep more money.
The pandemic definitely shook the foundation of the local business communities. The steps to rebuild and prepare for the future depend on reimagining the workplace and operations of the past, along with aggressively planning for the future.
Patrice DeCorrevont is Chicago market leader for the Wells Fargo Middle Market Banking group, with more than three decades of finance experience. Email her at email@example.com. Opinions and information included in this article are general and not intended to provide specific advice or recommendations for any individual or entity. Contact your banker, attorney, accountant, and/or tax advisor with regard to your individual situation. The author’s opinions do not necessarily reflect those of Wells Fargo Middle Market Banking or any other Wells Fargo business.
With more than 130 middle market banking offices nationwide, Wells Fargo offers experienced relationship and lending managers who live and work where you do. They understand your local economy and business environment and have the authority to make lending decisions locally.