Survey: Corona aid for medium-sized businesses is often too bureaucratic and furthermore takes too much time to be paid to the effected companies in need
The economic consequences of the corona crisis are worrying many medium-sized companies. But the pandemic is not the biggest problem facing companies. From the point of view of many medium-sized companies, government aid in the Corona crisis is often associated with too much bureaucracy. "In particular, the companies directly affected by the two lockdowns (...) are dependent on government support measures to survive in spite of all their reserves", state the Goldman and Deutsche Bank after their most recent survey of 1,500 small and medium-sized companies. (further information on https://www.spiegel.de/wirtschaft/unternehmen/mittelstand-fremdelt-mit-corona-buerokratie-a-bd2e7df1-9984-4fe9-b768-08b9549bf62d)
Bureaucracy as the biggest problem
The funds "should actually be granted to companies as unbureaucratically as possible," write the authors in the analysis of the survey that is available to the German Press Agency. "Our survey signals, however, that this should not always have been the case: In the midst of the Corona crisis, the bureaucracy in Germany is causing the greatest concern for medium-sized companies, not the effects and after-effects of the crisis itself." In fact, 68 percent of the companies surveyed in the autumn named bureaucracy as the biggest problem area. In the case of smaller medium-sized companies with a maximum of 20 employees, almost 89 percent complain about excessive administrative costs. The companies cite the shortage of skilled workers (67 percent) as the second biggest challenge, while 65 percent of companies are concerned about the effects of the Corona crisis.
Assessment of the business situation
The companies do not expect their business to improve quickly. "The medium-sized companies are currently doing noticeably better than they were in the spring of this year. But there can be no talk of a return to normality yet," the analysis says. This is all the more true since the data collection was already completed before the decisions to shut down the economy again from November. After all, almost two thirds of the companies assessed their business situation as "good" or "very good" in the autumn. However, more than a third of the respondents stated that their current situation was "rather bad" or "bad". The mood is particularly gloomy in the metal, automotive and mechanical engineering sectors, where a good eighth medium-sized company sees the situation as "bad".
Workforce and willingness to invest
Despite the stress of the Corona crisis, according to the survey, medium-sized companies try to keep their employees as much as possible, if necessary by means of short-time work. "A significant increase in employment is, however, an issue for fewer and fewer companies," says the study. A good 17 percent of the companies surveyed were still planning to increase their workforce. In the meantime, however, there are more than 15 percent who expect job cuts. This is the highest value since the financial crisis in 2009. Many companies are also reluctant to invest. In the autumn survey, less than 69 percent indicated that they would like to invest in their company in the next six months. This is the sixth time in a row that this value has decreased. The last time people were willing to invest was even lower in the financial crisis more than ten years ago.
"Dramatic wave of insolvency" - job losses and apprenticeships lost
According to BVR board member Andreas Fischer, most medium-sized companies in Germany should be "able to cope well with the consequences of the pandemic" thanks to a comparatively thick cushion of equity. Uwe Mueller, Board Member for Corporate Customers at Deutsche Bank, also pointed out that in the spring of 2020 many companies had "sufficient liquid funds" for themselves. He is therefore "confident that most medium-sized companies will survive a hard winter well," said Berghaus. On Sunday, the federal and state governments want to advise on stricter measures in the fight against the corona pandemic and possible further closings. For medium-sized companies, a so-called hard lockdown means a high risk, said Markus Hoffmann, Federal Managing Director of the BVMW SME Association on Saturday. "Many medium-sized companies have also invested considerable resources in digitization in order to enable their employees to work as flexibly as possible." For medium-sized businesses, a hard lockdown could mean a "dramatic wave of bankruptcies" with high job and apprenticeship losses.
Pandemic will be around us for decades
Even tough vaccination medication treatments will start in a few weeks, this pandemic will have still have major impacts on businesses and our society for decades. As a business owner is tremendous important now to make the right choices regarding your business model and further business growth. If you want to control your staff better also while they are working remotely in home office, check out our state of the art software wolfeye keylogger (www.wolfeye.us).