Chancellor Rishi Sunak unveiled a winter plan on Thursday to protect jobs from the economic aftereffects of measures that were introduced to combat Covid-19. This included a job support scheme that will replace furlough from 1 November, and an extension of help for some self-employed workers. But are these measures what the channel needs? Or is something else required?
The measures have the potential to increase pressure on the channel. Richard Eglon, marketing director at Agilitas, explained, “With the new UK winter economy plan in place, channel firms are going to be under increased pressure to support the new measures, which will have a huge impact on those businesses that are already struggling. In response, the whole channel supply chain is going to need to work closely together to be better positioned for a 2021 bounce back. Coupled with a continued decline in product sales over the next 6 months as companies look to sweat assets, channel firms will need to be increasingly innovative and agile in order to survive.
“Communication and transparency between channel leaders and team members is going to be paramount in driving a ‘get through this together’ culture. Channel firms will also need to take an ‘expect the unexpected’ approach as this has become the new normal. Not only are revenues going to be hit across channel firms, but the profits are also going to be under increased pressure and scrutiny. This is because companies will be required to look to invest more in retaining staff members through winter.
There is also a view that the extension of emergency Covid-19 business loan schemes is just as significant as jobs support measures. Atlas Cloud is a UK-based managed service provider specialising in cloud services and hosting solutions. The company’s CEO, Pete Watson, said, “It’s great to see the introduction of the jobs support scheme as it will no doubt save countless jobs. The extension of the government’s business loans, however, is key as British businesses aim to adapt to the new climate.
“Our recent, nationwide research revealed that over a third of British businesses made no changes to technology during lockdown. As remote working is here to stay, it’s important businesses invest to stay on top of the new risks associated with working outside of the office, so cash-strapped business leaders should take advantage of the new government terms to give this some consideration.”
CounterPath agreed that these measures further cement the longevity of home working. Todd Carothers, the company’s chief revenue officer, said, “The UK winter economy plan as it is, indirectly further supports the requirement to work from home and will put additional positive stress on the channel to provide nimble and scalable solutions. With that stress, comes opportunity to support workers in the “now normal”.”
Unified communications provider Sangoma welcomed these new measures from the UK government, but emphasised the reality that vendors must also play a role in assisting businesses. Shaan Sood, european marketing manager at Sangoma, said, “The chancellor has gone some way to helping the channel by extending VAT relief and terms to payback loans; but I think vendors also need to help – at Sangoma we have extended payment terms for our partners since the start of lockdown.
“I’ve been impressed with Rishi’s measures to help the UK economy during this crisis; and even though the new scheme isn’t as good as furlough – which I agree would be unstainable to continue – I think it will enable some businesses to keep their experienced staff rather than making them redundant.”
These stakeholders largely see these measures as constructive for the channel, with companies now able to better prepare for the months ahead. Eglon, from Agilitas, explained, “Now is the time to be getting your business ‘winter-ready’, so it is better prepared for when the green shoots of recovery will eventually return in 2021.”