‘GDP@Risk’ from coronavirus ranges from $3.3 trillion to $82 trillion over the next five years

The GDP@Risk over the next five years from the coronavirus pandemic could range from an optimistic loss of $3.3 trillion (0.65 per cent of five-year GDP) under a rapid recovery scenario to $82.4 trillion (16.3 per cent) in an economic depression scenario, says the Centre for Risk Studies at the University of Cambridge Judge Business School.

Under the current mid-range consensus of economists, the GDP@Risk calculation would be $26.8 trillion or 5.3 per cent of five-year GDP, says a “COVID-19 and business risk” presentation prepared by the Centre for Risk Studies.

Under the Risk Centre’s projections, the GDP@Risk in the United States would range from $550 billion (0.4 per cent of five-year GDP) to $19.9 trillion (13.6 per cent), in the United Kingdom from $96 billion (0.46 per cent) to $3.5 trillion (16.8 per cent), and in China from $1.03 trillion (0.9 per cent) to $19.2 trillion (16.5 per cent).

The Risk Centre developed the GDP@Risk metric in recent years and has applied it to measure the potential loss from a range of events ranging from natural disaster to cyber attacks to pandemics.

“GDP@Risk was designed as a constant metric that can be used to compare and standardise different types of threat,” says Dr Andrew Coburn, Chief Scientist at the Risk Centre in Cambridge. “The new calculations on GDP@Risk from the pandemic are not forecasts, but rather are projections based on various plausible scenarios that could unfold in the next five years related to the economic impact of COVID-19.”

The four scenario levels examined for their economic impact are:

  • L1: An Optimistic Recovery Path scenario in which pent-up demand fuels a rapid economic recovery with overshoot on the rebound, with short-term results better than currently expected
  • L2: Consensus Economic Forecast – the mid-range of forecasts by economic experts, now calling for a slow recovery curve with some period of economic growth before the recovery process
  • L3: Pessimistic Outlook of structural damage to the economy and a lengthy period of recession
  • L4: Economic Depression Scenario of a long-term recession with the economy tipped into depression, with “worst-case” estimates by economists and negative assumptions such as severe second waves of infection or protectionist politics.

The Centre for Risk Studies projections are based on 2019 GDP of $69.2 trillion for the world’s 19 leading economies and a baseline GDP over the next five years of $507 trillion. The Centre for Risk Studies has made its projections available to the public at the Cambridge Business Risk Hub.

Covid-19 cash flow – 6 key dates for businesses over the next 12 months

As lockdown measures begin to ease – some businesses have started up again already, and others will follow suit over the next few weeks – Mark Neath, director at financial experts Old Mill says businesses owners need to start planning now for the impact on cash reserves and below has set out six key dates that businesses should be planning for over the next 12 months.

September 21, 2020

“For many businesses, the actual lockdown itself will not be the worst period for cash flow, instead it will be when things start up again. As the working capital cycle begins, there will be certain commitments, and the reserves you would normally rely on have already been depleted.

“If we assume that most businesses are going to get back to some sort of ‘normal’ in June or July, the peak effect of the working capital rebuild is probably going to hit in September. And therefore, the last week of September is a key date that businesses should start planning for now.”

October 1, 2020, / January 1, 2021

“As most UK companies have December or March year-ends, 1 October this year and 1 January next year are key dates as they are when Corporation Tax payments are due.

“The crisis hadn’t kicked in back in December and was only just taking hold in March, so profits were probably higher then, and the tax bill most likely larger. Since then, the lockdown may have depleted the cash generated in your last financial year meaning it is no longer there to pay the tax.

For December year-ends, who have just gone through the September working capital peak, cash could be particularly tight.”

Mark says that as these dates are either three or six months away, there is time to plan and manage cash if possible, which may involve agreeing a Time To Pay arrangement with HMRC to spread it over a number of months.

November 7, 2020

For businesses with a March/June/September/December VAT stagger, which is the most common, 7 November is the due date for the VAT on the September quarter.

“The September quarter is likely to be the first quarter with a significant liability from returning to normal trading,” warns Mark. “Bearing in mind that this payment is going to be following hot on the heels of the September working capital peak and potentially the October Corporation Tax payment, the VAT payment will need to be planned for.”

Mark says that whilst it may be possible to spread the payment with a Time To Pay arrangement with HMRC, or short-term borrowing, these tactics are potentially dangerous to enter into.

“If there’s one thing that I’ve seen push businesses into insolvency more than any other, it’s getting behind on their VAT. This is because paying off last quarter’s VAT using this quarter’s cash flow is using up the cash needed when the VAT on those sales comes due. If necessary, transfer the VAT element of your customer receipts into a separate account so it’s there when you need it.”

January 31, 2021

The end of January is the payment date for income tax. And while this is a personal liability, not a company one, for many owner-managers, all income comes from the business, so there is usually a knock-on effect.

“Since the government made it possible to defer the 31 July 2020 payment on account, the amount that will be due on 31 January 2021 will potentially be that much higher. In an ideal world, we would all put our 31 July 2020 payment into a separate bank account so we have it ready, but if you have reduced your drawings to protect the company, that may not have been possible so you may need to draw money from the company to pay the tax, causing more issues with cash flow.”

Mark says that while you could potentially agree a Time To Pay arrangement with HMRC, that is spreading not reducing.

“The January 2021 payment will be based on your income to 5 April 2020, which was pre-crisis and may well be higher than your income for the tax year 5 April 2021. It may, therefore, be possible to reduce the payment on account that needs to be made on 31 January alongside the 2019/20 final payment. Also, get your tax return done as soon as possible so that you know what the amount is.”

March 31, 2021

One of the first things the Chancellor announced was that no VAT that was due during lockdown needed to be paid until the 31 March 2021, so this is a significant date, and, given the various drains on businesses’ cash flow that have already had a significant impact, has the potential to be one of the most critical dates in the COVID-19 crisis, as Mark explains: “I fear there’s a risk that more businesses could be pushed into insolvency on March 31 than during the actual lockdown. This statement may seem a little negative but it’s essential to confront the realities of the situation now and as it’s more than nine months away, you have time to plan, put money aside or arrange facilities to fund it. The worst thing you can do, as a business owner, is to put your head in the sand and ignore this potential issue that’s coming towards you.”

Other dates to keep in mind are rent quarter days; traditionally in the UK, quarterly rent is payable on 25 March, 24 June, 29 September and 25 December.

“If your business pays rent quarterly, then three of these quarter days closely coincide with the key dates we have identified at the end of September 2020, December 2020 and March 2021,” says Mark. “If your forecasts indicate that these dates could be a problem for your business, now might be the time to start negotiating with your landlord to switch to monthly rentals to smooth the cash flow effect.”

May 1, 2021

The final date to be aware of is the year anniversary of the CBILS (Coronavirus Business Interruption Loan Scheme) and BBLS (Bounce Back Loan Scheme). These started to be advanced in April and May 2020, mostly with twelve-month repayment holidays, so most repayments will start around May 1.

Mark said “The CBILS loans were assessed for affordability, often assuming a return to 2019 trading levels by the time the loan payments commence while the BBLS loans were issued with no checks on affordability at all. “Due to the significant impact on the economy, it’s quite likely that 2019 sales levels will not return, and that, combined with the aforementioned pressure on cash flow, many businesses could find themselves unable to repay their loan and I fear this could result in a second wave of business failures over the course of summer.”

Mark concludes: “I may sound alarmist, and while the situation is not ideal, those businesses that are prepared to confront the brutal facts of their current reality will be the ones that prevail. The dates above are key; highlight them in your calendars now and start thinking about how you might navigate through a series of ‘pinch points’ from a cash flow perspective.

“The key to business resilience will be to address these challenges head-on and it all starts with planning.”

One in three closed Scottish businesses fear they’re shut for good

A third of Scottish business owners who shut down operations during the coronavirus outbreak fear their firm may never re-open, according to a major new survey from the Federation of Small Businesses (FSB).

On the back of the research, the small business campaign group is calling for sustained government support for firms grappling with the impact of the crisis. Further, the FSB in Scotland wants clear official guidance about the steps businesses north of the border should take before they consider re-opening.

FSB’s survey of 5,471 UK small business owners, with 758 from Scotland, found that about half of Scottish firms (53%) have been forced to close since the beginning of the coronavirus outbreak, compared to four in ten (41%) across the UK.

Of those that have closed – both in Scotland and across the UK – about a third (35%) are not sure whether they will ever reopen again.

Andrew McRae, FSB’s Scotland policy chair, said: “In the jaws of the crisis, a huge share of independent Scottish firms did the right thing, followed the official advice and shut their doors. Our new survey shows that many of these operators worry they’re closed for good.

“We’re certain however that with the right help from government, bigger businesses and the general public, we can ensure these fears aren’t realised. But this research does show that many local operators are on a knife-edge.”

According to the survey, about a fifth (19%) of Scottish businesses have failed to make, or faced severe difficulties in making, commercial rent or mortgage repayments as a result of the pandemic’s economic impacts.

Further, seven in ten (71%) Scottish small employers have furloughed staff to aid the survival of their business. Around three quarters (70%) of these businesses say the ability to partially furlough workers would benefit them – half (46%) want to bring staff back gradually, and over a quarter (28%) say it would keep their business viable.

Andrew McRae said: “When the time comes to begin to re-open, businesses won’t be able to go from nought to sixty overnight. For many employers, they’ll want to phase a return to test any new systems and to keep their staff safe. Allowing the partial furloughing of workers is a vital policy move that would allow many smaller firms to restart smoothly and sustainably.”

Later today, FSB is hosting the first of a series of free-to-attend webinars for Scottish small business owners. The session will see representatives from Scottish Enterprise and local government give guidance and information on the government support on offer for Scottish businesses.

Andrew McRae said: “Recognising the importance of smaller businesses to local economies, governments north and south have launched various support schemes. We’re playing our part by helping to inform Scottish local firms about the help on offer, while making the case to policymakers about ways to close any gaps.

“When the focus shifts from shutting down, to reopening safely – Scottish businesses will want clear no-nonsense guidance from the powers that be. We’ll need to see sustained help on offer to help firms avoid stalling on re-start.”

How to spot tell-tale signs of money laundering within your business

Money laundering is a big issue in the business world and accounts for two to five per cent of global GDP, with nearly £1.6 trillion illegally laundered worldwide last year.

As a business owner or leader, a key responsibility is to ensure the organisation remains compliant with the various regulations to protect the company and its various stakeholders. To make this process more straightforward, anti-money laundering service, SmartSearch, has identified five tell-tale signs of suspicious activity to help businesses prevent any foul play.

1. A lack of detailed information

A company that lacks detailed information about certain aspects of the business, particularly monetary transactions such as exact amounts of investments or payments to external parties, is a cause for concern.

This is more common in businesses operating with a lot of cash transactions, such as a cardless fast food takeaway, where additional money can be added in to boost turnover without being detected. To ensure there is nothing untoward, detailed accounts of all cash flow, including receipts, should be readily available and the same applies to payments to suppliers and staff.

2. Unusual or unplanned transactions

Instances where a business suddenly engages in movements of money or assets, which don’t appear to add up, is worth investigating. If there have been any unplanned transactions on your business’ books, such as selling an asset for below market value or moving resources without a proper announcement or details of where it is going, this could be a sign of illegitimate activity. Also, if there is evidence of high frequency, high value and rapid movements of money and resources, this should be looked into further.

3. A change in behaviour

If there have been any sudden changes in the behaviour of clients or colleagues in relation to the movement of funds, you should do some digging. Quite often, in a case of money being laundered, transactions will be put through business accounts extremely quickly, likely bypassing all the usual operating procedures, and if this is the case, it should be flagged straight away.

This is very much the same in terms of clients’ behaviour or other external stakeholders as well. If they suddenly change their approach to how they want investments or transactions to be managed, without due diligence as previously agreed, this is worth investigating further.

4. Overly complex business structures

Complicated and illogical business ownership or leadership structures are common where money laundering is concerned, as this is an effective way of disguising the true ownership of money and assets. If there is no obvious explanation to why the company is structured in such a way, this should set alarm bells ringing.

In many cases of money laundering, businesses choose to use investors or shareholders overseas and so any activity with firms with no obvious geographical connection should also be scrutinised.

5. Working with high risk individuals

Exactly who your business gets involved with can be a sign of something untoward. In an instance where a company starts working with politically exposed individuals in a position of power, further investigation is certainly needed.

A Politically Exposed Person (PEP), who could be a current or former senior official of a government structure, is able to abuse their position in order to commit money laundering and so their activity should be monitored carefully, with any negative press about them taken into account before any business relationship is forged. Similarly, if a firm suddenly becomes involved in monetary activity in high risk, unstable countries, this is also something to keep an eye on.

John Dobson, CEO at SmartSearch, comments: “It is clear that money laundering is an increasingly prominent issue, and so the risks to businesses falling foul of illegal activity are now greater than ever.

“With the regulations becoming more strict all the time to try and crack down on this escalating problem, and the huge sanctions placed upon companies found guilty of money laundering, it is extremely important to be able to spot early warning signs of anything unusual. Exercising due diligence and flagging any concerns you may have will help you tackle any issues and protect your business, ensuring it remains well trusted and profitable long-term.”

To find out more, please visit: https://www.smartsearch.com/

Extinction Event: March Retail Sales Figures Confirm Worst Predictions for High Street

Shoppers may never return to the High Street after lockdown, warns the home delivery expert ParcelHero, as March ONS retail sales results show e-commerce sales rose 12.5% YOY in the wake of the Covid-19 epidemic.

Today’s Office of National Statistics (ONS) retail sales estimates for March have confirmed dire forecasts for the future of the High Street. The UK home delivery specialist ParcelHero predicted on 4 March, three weeks before the lockdown, that the coronavirus outbreak would result in online sales snatching a record amount of the overall retail market. ParcelHero claims this will significantly hasten the ongoing demise of the High Street unless drastic steps are taken by retailers.

Today’s figures showed a massive -5.7% decline in the overall amount spent by shoppers compared to February, the steepest drop since the ONS started predicting figures. In contrast, online sales rose to grab 22.3% of all sales. ParcelHero’s Head of Consumer Research, David Jinks MILT says: ‘The Covid-19 outbreak will be an extinction level event for the High Street, wiping out many fashion and department store giants, unless brands embrace omnichannel – integrated High Street and online sales – as never before. The value of clothing sales in non-food stores crashed by -35.5% month-on-month, for example. Back in 2016, our report, Death of the High Street, predicted half of the UK’s existing High Street businesses would collapse by 2030. With Animal, Oasis, Warehouse, Laura Ashley, BrightHouse, Cath Kidston and Debenhams all entering administration in recent days, we believe Covid-19 has simply hastened their demise.

‘Britain’s big retail brands must truly embrace omnichannel sales, with a completely integrated online and in-store experience, once social distancing measures are relaxed. Otherwise, Britain’s shoppers may simply lose the habit of visiting stores. A number of online retailers, particularly in the groceries sector, were woefully ill-prepared for the scale of growth at the beginning of the lockdown. This didn’t make a great impression on people attempting to buy groceries online for the first time. Gradually, however, many stores got their online acts together. The result is that, during March, many new shoppers developed a taste for home food deliveries and for many other products – and the concern is many may never go back.

‘Online household goods spending was up 51.8% compared to March 2019, and online department store sales values were up 47% compared to this February before lockdown started. In short, e-commerce recorded its highest recorded proportions of overall sales in all retail sectors ever, except non-store retailing, where it bagged a ‘mere’ 82.4 % of the overall market.

‘It’s no coincidence that one of the strongest reported retail performances of recent days has been by online-only fashion retailer Boohoo, which has recently added former High Street brands Karen Millen and Coast to its portfolio. Additionally, the announcement yesterday of the Laura Ashley brand’s partial rescue from administration is largely based around a plan to push the brand name online.

‘To stand any chance of fighting back, it’s vital that remaining town centre stores embrace ideas such as BOPUS – buy online, pick up in store – to tempt footfall back into physical shops. They must also ensure shoppers are rewarded by offering a great experience, with knowledgeable staff and a range of amenities.

‘Today’s figures are a meteor striking our town centres, and only the most agile and responsive stores, with a clear online strategy, are likely to survive the impact of Covid-19. And it’s not just lumbering, giant brands facing extinction; it’s hard to believe, but there are still many local specialist shops with no online presence whatsoever. March’s sales forecast figures should prove a final wake-up call to them. With Britain’s couriers still picking up from businesses and warehouses nationwide, shipping products directly to customers is just as easy as it ever has been for specialist retailers. For more information on how retailers can compare and contrast carriers prices and services.”

Finding calm in the chaos – how to futureproof your sales model

As we adjust to our new normal, business owners are immerging with a new sense of determination. Entrepreneurial spirit is flourishing, and resilient businesses are acclimatising to uncertainty. It’s time to focus on what you can control, not what you can’t.

Consistency is key, but so is the customer

Regardless of your delivery method, service or product, ensuring a consistent sales methodology is essential. This applies even if you’ve had to temporarily close your operation. Focusing efforts on streamlining and perfecting your sales process during this time can help to futureproof your business. At the very heart of this sales methodology should be customer need.

A quick and significant reduction in your sales figures at the beginning of the crisis is pretty much certain for most sectors, so it’s best to address what is happening honestly and as practically as possible. This builds trust with customers.

Approaching this situation in the right way can lead to improved relationships in the long run. Importantly, consider where you can add value in a viable way to customers amidst economic challenges.

For some this may be offering light relief, advice or entertainment to your community across social media, for others it may mean adapting your service offering to meet your client’s new needs. No matter the approach, ensure your sales methodology remains consistent in considering the real needs of your customers at any given time.

The impact of Coronavirus on the buying cycle

The latest research suggests that now, on average, there are 6.8 people involved in a buying decision. At times of crisis, it is more than likely you will see the decision-making unit expand even further, as your customers seek approval from the top C-level executives.

Just as you may be feeling nervous in the current climate, your customers will be hesitant to make deals too. We know customer needs and priorities are changing rapidly and it’s essential they see you, their supplier as someone they can trust. The negotiations will likely require extra time and attention and should be used as an opportunity to nurture your relationships. It’s important that people who are worried about their business outlook have an opportunity to share those worries in a structured way with somebody who can be – genuinely, not cynically – a trusted adviser.

The buying cycle will still follow the same processes as usual; changes over time, recognition of needs, evaluation of options and resolution of concerns, however some parts of the cycle may require more time and consideration than usual.

Skilled sellers would avoid jumping in with any ready-made or quickly concocted answers during the changes over time section. Instead, they’ll try to understand, as forensically and unemotionally as possible, how customers see the business and personal dislocation affecting different aspects of their operations, and the same skilled sellers will consider (without necessarily yet talking about) whether any needs start to emerge that they could meet – possibly in innovative ways.

During the recognition of needs part of the cycle, a skilled seller will focus questions on those impacts, all the time thinking about, but not yet describing, what the right solution could look like and how they could provide it. People who talk and ask about the future state (whatever it may hold), are often the most persuasive. They don’t dwell on how we got here, or even the harm is has done, but instead on how to mitigate that harm and what positive steps might have to be taken to confront the challenge.

Once the buyer reaches the evaluation of options stage, they’ll be asking themselves, “how can this supplier and their solution, more than anyone else I can see in the landscape, help us to mitigate and improve our situation?”. Anything that customers spend money on in abnormal times also has to meet needs in normal, business-as-usual times. But they’ll be more focussed on moving solutions that will get them through the present crisis up their corporate spending agenda – and they’ll be wondering if the solution they are currently evaluating really does that.

At the moment, customers might perhaps be bringing thoughts that normally crop up in resolution of concerns forward into their evaluation stage. More than ever, it’s about risk. If the seller can genuinely, by revisiting (in consultative, not declamatory, ways) the original benefits and guidelines that made the case persuasive and the supplier credible in the first place, that will help. So will re-treading with the customer again how the solution in question mitigates rather than enhances risk – and perhaps show how and where other customers are already finding this to be the case. What the research tells us without doubt is that minimising and making light of buyer’s concerns, prescribing a solution in defiance of the consultative conversations that have gone before, or pressuring the customer at what ought to be the final stages of the sale, are the highway to failure. Now, more than ever, buyers will be anxious about the consequences of their actions. Sellers need to uncover, clarify and help resolve these anxieties in full co-operation with the buyer.

The nuances of remote selling

Whilst employees are used to spending the majority of their time on their phones, computers or other technology, getting used to closing business deals over conference call and skype meetings can be a challenging prospect.

When developing your sales call plan, it’s important that you are strategic in your approach. You should consider who you contact and when, how likely you are to get a hold of someone and how likely they are to take your call and enable access to decision makers. This will increase your chances of success, creating a higher conversion rate and ensuring you invest your time and energy in the right areas.

When making calls, always have an objective in place. What do you want from your chosen contact? Is it to make a sale, or is it to get the contacts details for another decision maker, or even to try and arrange an appointment with their colleague? A good idea here is to work out both a primary and secondary objective for your call to give you more of a sense of achievement as you will not have to rely on pressing for just one outcome.

And when conversing with your contact, consider your credibility statement. Whether this is your ‘value proposition’, ‘hook’ or ‘elevator pitch’, it often makes up the basis for why your prospect will answer your call. Your credibility statement should include a solid business reason for your call, stating how your product or solution will add value, by either solving a problem, meeting a need, being relevant to the prospect and their role, being linked to your sales objective or being linked where possible to previous contacts or conversations.

By Tony Hughes, CEO at Huthwaite International, a leading global provider of sales, negotiation and communication skills development.

Queries around remote onboarding for new hires reach an all-time high

Remote onboarding, video interviews, and contract hires were the top three queries received by global recruiter Robert Walters in Q1.

Whilst video interviews and temporary hires dominated recruitment queries in February, this has been overtaken by employers asking around how to effectively onboard new hires remotely. So much so that queries around this topic increased by 37% in the last six weeks alone.

Chris Hickey, UK CEO at Robert Walters, comments: “Remote onboarding is not a new phenomenon to us and is something we have experience of when we have previously recruited for temporary or contract hires who are occasionally not based on-site.

“Whilst companies on the whole have been able to alter their recruitment process fairly quickly in response to the Covid-19 outbreak – through the use of digital CV’s, video interviews, and online testing – firms have been less prepared for the challenge of onboarding new talent remotely.

“There are entirely new factors firms have to consider when onboarding which didn’t come into play four months ago – including social isolation, effectively delivering training remotely, measuring output, illustrating company culture & values, and making a new starter feel a part of the team.”

Robert Walters new e-guide – A Guide to Remote Onboarding – outlines how companies can continue hiring the skills they need and embed new employees into the organisation remotely.

Chris Hickey shares his tips on how to keep new hires engaged:

  • Creating a personal introduction video: A lack of face-to-face interaction can be isolating, so using video to express your enthusiasm for a new employee joining the company can help alleviate this. Any personal touch allows a new starter to understand team culture, allowing them to fit in more seamlessly once staff start to migrate back to the office.
  • Provide reassurance: In the current climate, security and support are essential to quell anxieties or uncertainties new employees might have with starting a new role remotely. You’ll need to communicate regularly and answer any questions new starters have about how the onboarding process will work. In addition, include new starters in internal updates, e-newsletters, project updates and share useful links.
  • Embed into the team culture: Impress upon your new hire a sense of community from the outset by getting them involved in the team. Add your new team member to WhatsApp or Skype groups, and schedule social video calls to introduce your new starter to the rest of the department. Consider any team rituals that you can continue remotely and get the new starter involved in, such as virtual quizzes or drinks. Most importantly, prioritise small talk and getting to know your new hire, before turning to work chat.
  • Provide a new starter pack: This is something which typically gets left until induction week. But providing useful links to resources such as HR contacts, internal processes, training sessions, how to request leave, FAQs and benefits information, will allow many questions to be answered prior to your new hire’s start date. To increase engagement, make your new starter pack interactive with short quizzes about the company’s key messages and processes – you want your hire to feel they are integrating into your organisation before they go online on day one.
  • Provide an organisational chart: Remembering names and roles can be difficult even when you are seeing people face-to-face daily as a new starter, so when remote onboarding it is important to help an individual get to grips with the organisation structure and ‘who sits where.’ The best way to do this is to provide an organisational chart in your starter pack.
  • Make HR paperwork paperless: One of the most dreaded parts of starting a new role are the hordes of paperwork that new hires are required to sign and return. While many businesses have already transitioned to digital paperwork, a centralised platform such as Gusto can help you to keep all documentation in one place. You can also send out paperwork digitally using tools like Docusign or DocHub, but be sure to send them well in advance of your new hire’s start date.
  • Test your technologies: Confirm that all technology you make available to your new recruit is in working order before their first week. Assign someone in your business with technology expertise to be available to set up systems prior to the start date to ensure your new starter isn’t troubleshooting on day one.
  • Develop a training programme: Think about all the processes you may need to provide training on to support your new recruit in performing their job. This may include things you deal with as they come up in an office setting, such as accessing the company intranet, accessing templates and key files, or bookmarking sites they will use on a regular basis.
  • Create a feedback loop: Digital onboarding is a learning curve for all parties, so there are bound to be teething issues when implementing it for the first time. After week one, be sure to ask your new team member what can be improved. Perhaps they could have benefited from a more organised system, or would have appreciated fewer meetings and more down time to get settled in. It’s important to take into consideration how different personality types may react to a novel situation, and you won’t be able to improve your process if you don’t ask.
  • Be patient: Even if your new hire is accustomed to working remotely, a digital onboarding process will be navigating completely new territory for both managers and employees, so errors and miscommunications are to be expected during the first few weeks. Where a new employee may go wrong, be understanding and ensure they have the support to overcome and learn from any errors.
  • Prioritise their wellbeing: Your new starter will want to impress and overwork to let their employer know they can be trusted, resulting in the potential to work after hours and be at risk of burn-out. Make sure you instil the importance of unplugging and maintaining work-life balance from the outset. Share how you personally structure your day so your new hire follows suit.

Borrowing could hit £300 billion this year as costs of coronavirus continue to rise

Since the start of the coronavirus crisis, it has been clear that it will have a huge economic and fiscal impact.

It was right that the Government put public safety first by imposing the lockdown – and that it acted swiftly and decisively to support the economy. But both of these actions come at a heavy and continuing cost. The Office for Budget Responsibility recently predicted that the deficit for this coming year is likely to comfortably exceed any since the Second World War.

The Centre for Policy Studies, the leading centre-right think tank, has been working to estimate the ongoing cost of coronavirus to the Government’s finances, incorporating official data as well as estimates from the OBR, Institute for Fiscal Studies and others.

The CPS’s coronavirus counter, overseen by Caroline Elsom, a Senior Researcher at the think tank, suggests an estimated £127 billion in direct bailout costs and £119 billion in indirect costs such as lower tax revenue, based on the OBR scenario of a three-month lockdown followed by three months of looser restrictions.

When added to the £55 billion of borrowing already forecast for this financial year this produces a deficit of £301 billion, representing approximately 15% of GDP. This total figure is nearly double UK public expenditure on health, which came to £150 billion in 2017/18 and £153 billion 2018/19.

You can find full details of our calculations and methodology in the accompanying CPS briefing note. We will be revising and updating this in the light of new data, and welcome all suggestions.

Robert Colvile, Director of the Centre for Policy Studies, said: “The Government has acted throughout this crisis to save lives and protect livelihoods. But while it is clear to everyone that extraordinary times require extraordinary measures, they also incur extraordinary costs. It is vital to get the most accurate possible picture of the burden the Government is taking on in order to assess the full scale of the rebuilding that lies ahead.”

Caroline Elsom, Senior Researcher at the Centre for Policy Studies, said: “Counting the full cost of the coronavirus outbreak is vital to managing the ongoing crisis and planning future steps. As the economic impact becomes clearer, we will continue to track what this means for our public finances to help steer the country through to recovery.”

StepChange welcomes FCA forbearance guidance on motor finance and payday loans

StepChange Debt charity welcomes the Financial Conduct Authority’s draft new guidance on how coronavirus-related forbearance for affected customers should be offered by providers of motor finance and payday loans. However, the charity believes that further measures are likely to be needed further down the line.

Richard Lane, Director of External Affairs at StepChange, says: “The proposed new measures on car finance and high cost short term credit fill some of the gaps that were left in the previous approach required by the FCA to firms’ offering of forbearance to people suffering loss of income due to the pandemic. This is helpful to give people time to work out what their future situation may hold, but the one-month freeze on payday loans is unlikely to be long enough to allow people to take a realistic view of the future.

“What is becoming urgent is to gain some understanding of what lenders will do at the end of the initial forbearance period – we think it is unlikely that most people whose income has been affected will be fully back on their feet and able to resume normal payments plus repayment of the sums accumulated during the forbearance period by that time. It’s likely that forbearance periods will need to be extended.”

StepChange will submit a response to the FCA consultation by the deadline on Monday 20 April.

The Nottingham keeps branches open and triples charitable donations

As the impact of Coronavirus is felt across the UK, Nottingham Building Society has provided information on how it’s supporting members and doing the right thing for the communities in which it operates through the pandemic and beyond.

Keeping branches open

As an essential service, the Society has worked hard to maintain services for members, keeping branches open for those that need it the most. All building society branches are currently open albeit on reduced operating hours. The Society has advised members they should only visit branches for compulsory activity such as cash withdrawals for essential purchases and social distancing is being adhered to with only one customer allowed into a branch at a time and customers that are waiting outside are asked to remain 2 metres apart.

David Marlow, Chief Executive Officer, commented; “As an essential service, we remain committed to providing members with vital access to their money and help and advice at this particularly challenging time. We aim to continue to open our branches where we can do this safely for both our members and teams alike.

“Our dedicated teams are overcoming multiple obstacles to maintain services for members. I have been in awe around how our teams have come together to serve their members locally in some cases even helping vulnerable customers secure their weekly shopping. I am enormously grateful for the way in which they have supported each other and our members.”

Looking after its members

The Society is acutely aware that a key concern facing many of its members is the financial impact of these unprecedented times and has taken steps to support borrows and savers alike.

In addition to offering payment holidays to its mortgage customers, the Society has vowed to protect savers and announced it is freezing rates on its savings accounts for the next 3 months, despite the Bank of England having reduced the bank base rate twice during March down to 0.1%. David Marlow continued; “Our mutual ethos and financial strength means we have the ability to provide our members with some support during this national emergency.

“At a time when household finances are being squeezed and are facing massive uncertainty, deciding not to pass on interest rate reductions for the next 3 months is just another way we are looking after our members and demonstrates the building society has always been the best place for their savings.”

Doing the right thing for its communities

In addition to supporting its members, the Society is also extending its support to the wider community. Although its corporate and social responsibility programme has traditionally aligned to themes of supporting employability, financial education and literacy and tackling homelessness, this is being extended to support those in most need including:

  • Alleviation of poverty – supporting communities facing financial hardship and accessing funds remotely for the first time
  • Reducing social isolation – reaching out to those members of our communities at risk of social isolation
  • Supporting education and young people – supporting schools, parents and community groups engaged in home-education and continuing to drive aspiration for the future in young people
  • Supporting our charitable partners – supporting emergency activation activity and minimising on-going costs to relieve the pressure

The Society has announced it will be trebling its planned charitable donations for the first half of 2020, and is making a six figure investment immediately available to help fund activity in these key areas across its communities. Further details of those causes set to benefit will be shared over the coming weeks as the funds find their way to the frontline where they are most needed.

David Marlow concluded; “The Nottingham has a long and proud history of doing the right thing and in times like these, this is more important than ever. As a mutual organisation we are committed to supporting our communities and, although we realise these are worrying times, we know we will get through this together, looking after each other and supporting those that need it most.”