Member Insights: Financial and Personnel Impact of COVID-19

BY Sarah Jilbert
4/17/2020 - HVAC Market Intelligence , COVID-19

We have partnered with Industry Insights on a COVID-19 Impact and Implementation Survey to better understand not only how HARDI members have been adapting to changes since COVID-19 took off, but also to understand how the distribution industry as a whole has been adapting. The first survey was sent to various distribution association members the week of March 16th (177 HARDI respondents and over 2,500 total respondents) and the second survey was sent the week of April 6th (80 HARDI respondents and over 1,500 total respondents). Looking back over those three weeks it’s amazing how quickly the virus spread, mindsets changed, and plans were put into place by the government and businesses.  

Check out Industry Insight’s Executive Summary of results from the second survey.

Financial Impact

In the first Impact and Implementation survey, 45% of HARDI respondents stated they had already experienced a direct negative financial impact from COVID-19. In just three weeks this number increased to 83% of HARDI respondents experiencing a direct negative financial impact. 28% of HARDI respondents in the first survey indicated that they expect their 2020 revenues to be negatively impacted by COVID-19, while in the second survey, 42% of HARDI respondents now expect their 2020 revenues to be very negatively impacted.

According to the survey, 80% of HARDI distributors planned to apply for the PPP loan and 24% planned to apply for an EIDL loan. Fears of long-term company viability were reduced with the government action plan. According to HARDI members, 49% would have major or moderate concerns about the long-term viability of their business without the government action plan while only 13% are majorly or moderately concerned about business viability with the government plan.  

Personnel Impact

The general opinion amongst HARDI distributors is that staying at home and social distancing measures currently in effect are necessary. In the survey, 69% find it very necessary, 24% find it somewhat necessary and only 7% find it somewhat unnecessary. According to HARDI distributor members, 10% have experienced a confirmed COVID-19 case.

The first and second survey maintained similar results around staff reductions with around 45% of HARDI respondents making moderate staff reductions and around 50% not making any changes to staffing.

Since March 1st, 2020, 35% of HARDI distributors furloughed, laid off, or terminated employees with a median company workforce reduction of 6% and an average company workforce reduction of 14%. Of those who have recently laid off or furloughed employees, 55% plan to hire them back and 40% are not sure.

What to Expect Next

It is safe to say that most of us cannot wait for life to get back to “normal,” but how long will that take? According to all of the distribution industry survey respondents, 26% believe this pandemic will be over and will return to pre-COVID-19 status in 1-2 months. 28% believe we will return in 2-3 months and 22% believe we will return in 4-6 months.

Once stay at home orders have been lifted, industry survey respondents selected how long it would take them to return to various pre-COVID activities as seen below:

  • Return office workforce back to office
    • 38% return immediately
    • 35% return in first month
    • 22% return in one to three months
  • Company travel
    • 14% resume immediately
    • 21% resume in first month
    • 40% resume in one to three months
    • 17% resume in four to six months
  • Large group activities
    • 14% participate in first month
    • 39% participate in one to three months
    • 25% participate in four to six months

For a weekly pulse of the industry please consider filling out HARDI’s weekly distributor and manufacturer survey to see results from other participants in real time.

Please reach out to Sarah Jilbert with any questions or concerns, and be sure to visit our COVID-19 resource page for more support on navigating COVID-19.