Early data on vaccine distribution by race and ethnicity show a mismatch between those population groups receiving the vaccine, and those that have been hardest hit by the pandemic. As the graphic above shows, Black and Hispanic Americans have thus far been vaccinated at considerably lower rates in many states compared to their share of population as a whole—and these disparities are likely to worsen as states shift focus to senior populations for priority access, moving away from prioritizing essential workers, who tend to be more racially diverse.
The White population skews older, which stands to widen disparities in the near-term. Another compounding issue: vaccine hesitancy.
A recent Morning Consult poll found that, despite an overall increase in overall vaccine willingness, Black Americans remain the most hesitant, with only 48 percent willing to get the vaccine.
Meanwhile, Black and Hispanic Americans continue to be disproportionately impacted by COVID, with hospitalization and death rates nearly three to four times greater than those of White Americans.
Hesitancy will become an increasingly urgent problem as larger swathes of the population become eligible for vaccination, especially given that communities of color tend to be younger, as shown above.
As a warehouse manager at a Food 4 Less in Los Angeles, Norma Leiva greets delivery drivers hauling in soda and chips and oversees staff stocking shelves and helping customers. At night, she returns to the home she shares with her elderly mother-in-law, praying the coronavirus isn’t traveling inside her.
A medical miracle at the end of last year seemed to answer her prayers: Leiva, 51, thought she was near the front of the line to receive a vaccine, right after medical workers and people in nursing homes. Now that California has expanded eligibility to millions of older residents — in a bid to accelerate the administration of the vaccines — she is mystified about when it will be her turn.
“The latest I’ve heard is that we’ve been pushed back. One day I hear June, another mid-February,” said Leiva, whose sister, also in the grocery business, was sickened last year with the virus, which has pummeled Los Angeles County — the first U.S. county to record 1 million cases. “I want the elderly to get it because I know they’re in need of it, but we also need to get it, because we’re out there serving them. If we’re not healthy, our community’s not healthy.”
Delaying vaccinations for front-line workers, especially food and grocery workers, has stark consequences for communities of color disproportionately affected by the pandemic. “In the job we do,” Leiva said, “we are mostly Blacks and Hispanics.”
Many states are trying to speed up a delayed and often chaotic rollout of coronavirus vaccines by adding people 65 and older to near the front of the line. But that approach is pushing others back in the queue, especially because retired residents are more likely to have the time and resources to pursue hard-to-get appointments. As a result, workers who often face the highest risk of exposure to the virus will be waiting longer to get protected, according to experts, union officials and workers.
The shifting priorities illuminate political and moral dilemmas fundamental to the mass vaccination campaign: whether inoculations should be aimed at rectifying racial disparities, whether the federal government can apply uniform standards and whether local decision-making will emphasize more than ease of administration.
Speed has become all the more critical with the emergence of highly transmissible variants of the virus. Only by performing 3 million vaccinations a day — more than double the current rate — can the country stay ahead of the rapid spread of new variants, according to modeling conducted by Paul Romer, a Nobel Prize-winning economist.
But low-wage workers without access to sick leave are among those most likely to catch and transmit new variants, said Richard Besser, president of the Robert Wood Johnson Foundation and former acting director of the Centers for Disease Control and Prevention. Because there are not enough doses of the vaccines to immunize front-line workers and everyone over 65, he said, officials should carefully weigh combating the pernicious effects of the virus on communities of color against the desire to expedite the rate of inoculation.
“If the obsession is over the number of people vaccinated,” Besser said, “we could end up vaccinating more people, while leaving those people at greatest risk exposed to ongoing rates of infection.”
The move to broaden vaccine availability to a wider swath of the elderly population — backed by Trump administration officials in their final days in office and members of President Biden’s health team — marks a departure from expert guidance set forth in December, as the vaccine rollout was getting underway.
A panel of experts advising the CDC recommended that the second priority group include front-line essential workers, along with adults 75 and older. The guidance represented a compromise between the desire to shield people most likely to catch and transmit the virus — because they cannot socially distance or work from home — and the effort to protect people most prone to serious complications and death.
People of color and immigrants are overrepresented not just in grocery jobs but also in meatpacking, public transit and corrections facilities, where outbreaks have taken a heavy toll. Black and Latino Americans are three to four timesmore likely than White people to be hospitalized and almost three times more likely to die of covid-19, the illness caused by the coronavirus, according to the CDC.
The desire to make vaccine administration equitable was central to recommendations from the Advisory Committee on Immunization Practices.
“We cannot abandon equity because it’s hard to measure and it’s hard to do,” Grace Lee, a committee member and a pediatrics professor at Stanford University’s School of Medicine, said at the time.
On Wednesday at a committee meeting, Lee said officials need both efficiency and equity to “ensure that we are accountable for how we’re delivering vaccine.”
“Absolutely agree we do not want any doses in freezers or wasted in any way,” Lee said.
But efficiency has won out in most places.
Some state leaders, such as Florida Gov. Ron DeSantis (R) and Texas Gov. Greg Abbott (R), acted on their own, lowering the age threshold to 65 soon after distribution began last year. Others followed with the blessing of top federal officials.
Biden’s advisers have said equity will be central to their efforts, calling access in underserved communities a “moral imperative” and promising, in a national vaccination strategy document, “we remain focused on building programs to meet the needs of hard-to-reach and high-risk populations.” In the meantime, they have similarly encouraged states to broaden vaccine availability to a larger segment of their older populations without providing guidance about how to ensure front-line workers remain a priority.
Experts studying health disparities say prioritizing people over 65 disproportionately favors White people, because people of color, especially Black men, tend to die younger, owing to racism’s effect on physical health. Twenty percent of White people are 65 or over, while just 9 percent of people of color are in that age group, according to federal figures.
“People are thinking about risk at an individual level as opposed to at a structural level. People are not understanding that where you work and where you live can actually bring more risks than your age,” said Camara Phyllis Jones, a family physician, epidemiologist and past president of the American Public Health Association. “It’s worse than I thought.”
The constantly changing priorities have made the uneven rollout all the more difficult to navigate. There is confusion over when, where and how to get shots, with different jurisdictions taking different approaches in an illustration of the nation’s decentralized public health system.
While praising the effort to expand access and speed up the administration of shots, Marc Perrone, president of the United Food and Commercial Workers International Union, said increasing reliance on age-based eligibility “must not come at the expense of the essential workers helping families put food on the table during this crisis.
“Public health officials must work with governors in all 50 states to end the delays and act swiftly to distribute the vaccine to grocery and meatpacking workers on the front lines, before even more get sick and die,” he said.
Mary Kay Henry, president of the Service Employees International Union, said the only way to ensure front-line workers get the vaccines they need is to involve them and their union representatives in decisions about eligibility and access. Unions, she said, could also be tapped to conduct outreach in hard-to-reach communities, including those not conversant in English.
“Essential workers who’ve been on the front lines both in health care but also across the service and care sectors — child care, airline, janitorial, security — face extraordinary risk,” she said.
Leiva, a 33-year member of UFCW Local 770, said the celebration of essential workers should come with recognition of their sacrifice, which is unevenly felt across racial groups. When the virus tore through the grocery store, she said, “every single one of them in that cluster was Hispanic.”
But with hospitals dangerously full in recent weeks, and less than half of distributed vaccine doses administered, many states broadened their top priority groups to include older adults, hoping to lessen the burden on hospitals and expedite vaccine administration.
Protecting people 65 and older, officials say, saves the lives of those who face the gravest consequences and reduces the stress on intensive care units. Risk for severe covid-19 illness increases with age; 8 out of 10 deaths reported in the United States have been in people 65 and older.
Older people in the United States have also encountered enormous hurdles in gaining access to the vaccines. Faced with overloaded sign-up websites and jammed phone lines, they have sometimes spent nights waiting in line.
In more than half the states — at least 28, by one count — people 65 and older are in the top two priority groups, behind health-care workers and residents in long-term care facilities. As a result, front-line workers either fall behind the older group or are squeezed into the same pool, according to a Kaiser Family Foundation analysis.
“When you make that pool of eligible people much bigger, you’re creating much longer wait times for some of these groups,” said Jennifer Kates, a senior vice president at the foundation.
Front-line workers often labor in crowded conditions. Some live in multigenerational households. By contrast, many older adults are retired, have greater access to sign-up portals and have more time to wait in lines outside of clinics, health officials said.
“The 65-year-old person who is wealthier and can stay home and isn’t working and is retired and can ride it out for another two months … is less likely to get infected than the person who has to go outside every day for work,” said Roberto B. Vargas, assistant dean for health policy at Charles R. Drew University of Medicine and Science in Los Angeles.
In California, Gov. Gavin Newsom (D) announced Jan. 13 that the state was “significantly increasing our efforts to get these vaccines administered, get them out of freezers and get them into people’s arms” by increasing the number of people eligible to receive shots. “Everybody 65 and over — about 6.6 million Californians — we are now pulling into the tier to make available vaccines.”
On Jan. 25, Newsom said the state would move to an age-based eligibility system after vaccinating those now at the front of the line, including health-care workers, food and agriculture workers, teachers, emergency personnel and seniors 65 and older.
The abrupt changes confused local health officials.
Julie Vaishampayan, public health officer in San Joaquin Valley’s Stanislaus County, said the county had just finished vaccinating health-care workers and was getting ready to reach out to farm laborers at a tomato-packing company and food-processing workers. When the state added those 65 and older, the county had to pivot abruptly,as it faced a quintessential supply-and-demand dilemma.
“There isn’t enough vaccine to do it all, so how do we balance?” she said in an email. “This is really hard.”
In Tennessee, teachers were initially promised access but then were told to wait until people 70 and older got their shots. The state’s health commissioner, Lisa Piercey, said she was moving more gradually through the age gradations so as not to crowd out workers, treating the federal framework as guidance, which is often how officials have characterized it. “It’s not an either/or situation,” she said in an interview this month.
But with vaccine supply sharply limited, priorities had to be narrowed. By vaccinating older residents, she said, the state was also protecting its medical infrastructure by reducing the likelihood that older people, who are more likely to be hospitalized, would fall ill. Once there is more supply, she said, she would be able to amplify aspects of the state’s planning geared toward underserved and hard-to-reach populations. “I can’t wait to manifest that equity plan.”
In Nebraska, the health department in Douglas County, which includes Omaha, prioritized older residents over “critical industry workers who can’t work remotely” after the state expanded eligibility to residents 65 and older, according to a January news release. Meatpacking workers, grocery store employees, teachers and public transit workers were bumped lower in line.
Omaha’s teachers union had wanted its approximately 4,100 members to get shots before the district resumes full-time, in-person instruction for elementary and middle school students Tuesday. Now, they must wait until late spring, said Robert Miller, president of the Omaha Education Association.
“The fear, it goes hand in glove with going back to school five days a week,” he said, despite CDC reports that schools operating in person have seen scant transmission. “We’ve had some teachers who have multigenerational homes, who live in the basement, … and they can’t interact with their parents. We have some teachers who are staying at a different apartment away from their elder loved ones.”
Some state leaders sought to defend broadening eligibility to more of the elderly population, saying it was consistent with efforts to address racial disparities. Illinois had reduced the age requirement to 65, Gov. J.B. Pritzker (D) said recently, “in order to reduce covid-19 mortality and limit community spread in Black and Brown communities.” His office did not respond to a request for comment about how lowering the age threshold would have that effect.
In Massachusetts, state leaders announced Jan. 25 that people 65 and older and those with at least two high-risk medical conditions were next in line, ahead of educators and workers in transit, utility, food and agriculture, sanitation, and public works and public health.
That means Dorothy Williams, who runs a day-care center in a predominantly Black community where the infection rate is among the highest in Boston, has to wait. Her center stayed open throughout the pandemic, caring for children of essential workers, many of them in low-wage jobs in hospitals or nursing homes.
She recognizes the long hours and the exposure risks of those health-care aides. That means “we’re exposed,” she said, “each and every single day.” She has been able to keep the coronavirus at bay, but two weeks ago, she had a scare that forced her to close and get everyone tested after a child became ill. The tests came back negative, but the fear remains.
Hardly one month into 2021, the pressing priorities facing healthcare leaders are abundantly clear.
First, we will be living in a world preoccupied by COVID-19 and vaccination for many months to come. Remember: this is a marathon, not a sprint. And the stark reality is that the vaccination rollout will continue well into the summer, if not longer, while at the same time we continue to care for hundreds of thousands of Americans sickened by the virus. Despite the challenges we face now and in the coming months in treating the disease and vaccinating a U.S. population of 330 million, none of us should doubt that we will prevail. Despite the federal government’s missteps over the past year in managing and responding to this unprecedented public health crisis, historians will recognize the critical role of the nation’s healthcare community in enabling us to conquer this once-in-a-generation pandemic.
While there has been an overwhelming public demand for the vaccine during the past couple of weeks, there remains some skepticism within the communities we serve, including some of the most-vulnerable populations, so healthcare leaders will find themselves spending time and energy communicating the safety and efficacy of vaccines to those who may be hesitant. This is a good thing. It is our responsibility to share facts, further public education and influence public policy.COVID-19 has enhanced public trust in healthcare professionals, and we can maintain that trust if we keep our focus on the right things — namely, how we improve the health of our communities.
And as healthcare leaders diligently balance this work, we also have a great opportunity to reimagine what our hospitals and health systems can be as we emerge from the most trying year of our professional lifetimes. How do you want your hospital or system organized? What kind of structural changes are needed to achieve the desired results? What do you really want to focus on? Amid the pressing priorities and urgent decision-making needed to survive, it is easy to overlook the great reimagination period in front of us. The key is to forget what we were like before COVID-19 and reflect upon what we want to be after.
These changes won’t occur overnight. We’ll need patience, but here are my thoughts on five key questions we need to answer to get the right results.
1. How do you enhance productivity and become more efficient? Throughout 2021, most systems will be in recovery mode from COVID’s financial bruises. Hospitals saw double-digit declines in inpatient and outpatient volumes in 2020, and total losses for hospitals and health systems nationwide were estimated to total at least $323 billion. While federal relief offset some of our losses, most of us still took a major financial hit. As we move forward, we must reorganize to operate as efficiently as possible. Does reorganization sound daunting? If so, remember the amount of reorganization we mustered to work effectively in the early days of the pandemic. When faced with no alternative, healthcare moved heaven and earth to fulfill its mission. Crises bring with them great clarity. It’s up to leaders to keep that clarity as this tragic, exhausting and frustrating crisis gradually fades.
2. How do you accelerate digital care? COVID-19 changed our relationship with technology, personally and professionally. Look at what we accomplished and how connected we remain. We were reminded of how high-quality healthcare can go unhindered by distance, commutes and travel constraints with the right technology and telehealth programs in place. Health system leaders must decide how much of their business can be accommodated through virtual care so their organizations can best offer convenience while increasing access. Oftentimes, these conversations don’t get far before confronting doubts about reimbursement. Remember, policy change must happen before reimbursement catches up. If you wait for reimbursement before implementing progressive telehealth initiatives, you’ll fall behind.
3. How will your organization confront healthcare inequities? In 2020, I pledged that Northwell would redouble its efforts and remain a leader in diversity and inclusion. I am taking this commitment further this year and, with the strength of our diverse workforce, will address healthcare inequities in our surrounding communities head-on. This requires new partnerships, operational changes and renewed commitments from our workforce. We need to look upstream and strengthen our reach into communities that have disparate access to healthcare, education and resources. We must push harder to transcend language barriers, and we need our physicians and medical professionals of color reinforcing key healthcare messages to the diverse communities we serve. COVID-19’s devastating effect on communities of color laid bare long-standing healthcare inequalities. They are no longer an ugly backdrop of American healthcare, but the central plot point that we can change. If more equitable healthcare is not a top priority, you may want to reconsider your mission. We need leaders whose vision, commitment and courage match this moment and the unmistakable challenge in front of us.
4. How will you accommodate the growing portion of your workforce that will be remote?Ten to 15 percent of Northwell’s workforce will continue to work remotely this year. In the past, some managers may have correlated remote work and teams with a decline in productivity. The past year defied that assumption. Leaders now face decisions about what groups can function remotely, what groups must return on-site, and how those who continue to work from afar are overseen and managed. These decisions will affect your organizations’ culture, communications, real estate strategy and more.
5. How do you vigorously hold onto your cultural values amid all of this change? This will remain a test through 2021 and beyond. Culture is the personality of your organization. Like many health systems and hospitals, much of Northwell’s culture of connectedness, awareness, respect and empathy was built through face-to-face interaction and relationships where we continually reinforced the organization’s mission, vision and values. With so many employees now working remotely, how can we continue to bring out the best in all of our people? We will work to answer that question every day. The work you put in to restore, strengthen and revitalize your culture this year will go a long way toward cementing how your employees, patients and community come to see your organization for years to come. Don’t underestimate the power of these seemingly simple decisions.
While we’ve been through hell and back over the past year, I’m convinced that the healthcare community can continue to strengthen the public trust and admiration we’ve built during this pandemic. However, as we slowly round the corner on COVID-19, our future success will hinge on what we as healthcare organizations do now to confront the questions above and others head-on. It won’t be quick or easy and progress will be a jagged line. Let’s resist the temptation to return to what healthcare was and instead work toward building what healthcare can be. After the crisis of a lifetime, here’s our opportunity of a lifetime. We can all be part of it.
On her day off not long ago, emergency room nurse Jane Sandoval sat with her husband and watched her favorite NFL team, the San Francisco 49ers. She’s off every other Sunday, and even during the coronavirus pandemic, this is something of a ritual. Jane and Carlos watch, cheer, yell — just one couple’s method of escape.
“It makes people feel normal,” she says.
For Sandoval, though, it has become more and more difficult to enjoy as the season — and the pandemic — wears on. Early in the season, the 49ers’ Kyle Shanahan was one of five coaches fined for violating the league’s requirement that all sideline personnel wear face coverings. Jane noticed, even as coronavirus cases surged again in California and across the United States, that Levi’s Stadium was considering admitting fans to watch games.
But the hardest thing to ignore, Sandoval says, is that when it comes to coronavirus testing, this is a nation of haves and have-nots.
Among the haves are professional and college athletes, in particular those who play football. From Nov. 8 to 14, the NFL administered 43,148 tests to 7,856 players, coaches and employees. Major college football programs supply dozens of tests each day, an attempt — futile as it has been — to maintain health and prevent schedule interruptions. Major League Soccer administered nearly 5,000 tests last week, and Major League Baseball conducted some 170,000 tests during its truncated season.
Sandoval, meanwhile, is a 58-year-old front-line worker who regularly treats patients either suspected or confirmed to have been infected by the coronavirus. In eight months, she has never been tested. She says her employer, California Pacific Medical Center, refuses to provide testing for its medical staff even after possible exposure.
Watching sports, then, no longer represents an escape from reality for Sandoval. Instead, she says, it’s a signal of what the nation prioritizes.
“There’s an endless supply in the sports world,” she says of coronavirus tests. “You’re throwing your arms up. I like sports as much as the next person. But the disparity between who gets tested and who doesn’t, it doesn’t make any sense.”
This month, registered nurses gathered in Los Angeles to protest the fact that UCLA’s athletic department conducted 1,248 tests in a single week while health-care workers at UCLA hospitals were denied testing. Last week National Nurses United, the country’s largest nursing union, released the results of a survey of more than 15,000 members. About two-thirds reported they had never been tested.
Since August, when NFL training camps opened, the nation’s most popular and powerful sports league — one that generates more than $15 billion in annual revenue — has conducted roughly 645,000 coronavirus tests.
“These athletes and teams have a stockpile of covid testing, enough to test them at will,” says Michelle Gutierrez Vo, another registered nurse and sports fan in California. “And it’s painful to watch. It seemed like nobody else mattered or their lives are more important than ours.”
Months into the pandemic, and with vaccines nearing distribution, testing in the United States remains something of a luxury. Testing sites are crowded, and some patients still report waiting days for results. Sandoval said nurses who suspect they’ve been exposed are expected to seek out a testing site on their own, at their expense, and take unpaid time while they wait for results — in effect choosing between their paycheck and their health and potentially that of others.
“The current [presidential] administration did not focus on tests and instead focused on the vaccine,” says Mara Aspinall, a professor of biomedical diagnostics at Arizona State University. “We should have focused with the same kind of ‘warp speed’ on testing. Would we still have needed a vaccine? Yes, but we would’ve saved more lives in that process and given more confidence to people to go to work.”
After a four-month shutdown amid the pandemic’s opening wave, professional sports returned in July. More than just a contest on television, it was, in a most unusual year, a symbol of comfort and routine. But as the sports calendar has advanced and dramatic adjustments have been made, it has become nearly impossible to ignore how different everything looks, sounds and feels.
Stadiums are empty, or mostly empty, while some sports have bubbles and others just pretend their spheres are impermeable. Coaches stand on the sideline with fogged-up face shields; rosters and schedules are constantly reshuffled. On Saturday, the college football game between Clemson and Florida State was called off three hours before kickoff. Dodger Stadium, home of the World Series champions, is a massive testing site, with lines of cars snaking across the parking lot.
Sports, in other words, aren’t a distraction from a polarized nation and its response to a global pandemic. They have become a constant reminder of them.And when some nurses turn to sports for an attempt at escape, instead it’s just one more image of who gets priority for tests and, often, who does not.
“There is a disconnect when you watch sports now. It’s not the same. Covid changed everything,” says Gutierrez Vo, who works for Kaiser Permanente in Fremont, Calif. “I try not to think about it.”
Sandoval tries the same, telling herself that watching a game is among the few things that make it feel like February again. Back then, the coronavirus was a distant threat and the 49ers were in the Super Bowl.
That night, Sandoval had a shift in the ER, and between patients, she would duck into the break room or huddle next to a colleague checking the score on the phone. The 49ers were playing the Kansas City Chiefs, and Sandoval would recall that her favorite team blowing a double-digit lead represented the mightiest stress that day.
Now during shifts, Sandoval sometimes argues with patients who insist the virus that has infected them is a media-driven hoax. She masks up and wears a face shield even if a patient hasn’t been confirmed with the coronavirus, though she can’t help second-guessing herself.
“Did I wash my hands? Did I touch my glasses? Was I extra careful?” she says.
If Sandoval suspects she has been exposed, she says, she doesn’t bother requesting a test. She says the hospital will say there aren’t enough. So instead she self-monitors and loads up on vitamin C and zinc, hoping the tickle in her throat disappears. If symptoms persist, which she says hasn’t happened yet, she plans to locate a testing site on her own. But that would mean taking unpaid time, paying for costs out of pocket and staying home — and forfeiting a paycheck — until results arrive.
National Nurses United says some of its members are being told to report to work anyway as they wait for results that can take three to five days. Sutter Health, the hospital system that oversees California Pacific Medical Center, said in a statement to The Washington Post that it offers tests to employees whose exposure is deemed high-risk and to any employee experiencing symptoms. Symptomatic employees are placed on paid leave while awaiting test results, according to the statement.
“As long as an essential healthcare worker is asymptomatic,” Sutter’s statement read, “they can continue to work and self-monitor while awaiting the test result.”
Sandoval said employees have been told the hospital’s employee health division will contact anyone who has been exposed. Though she believes she’s exposed during every shift, Sandoval says employee health has never contacted her to offer a test or conduct contact tracing.
“If you feel like you need to get tested, you do that on your own,” she says. Sandoval suspects the imbalance is economic. In September, Forbes reported NFL team revenue was up 7 percent despite the pandemic. Last week Sutter Health reported a $607 million loss through the first nine months of 2020.
Sandoval tries to avoid thinking about that, so she keeps heading back to work and hoping for the best. Though she says her passion for sports is less intense now, she nonetheless likes to talk sports when a patient wears a team logo. She asks about a star player or a recent game. She says she is looking forward to the 49ers’ next contest and the 2021 baseball season.
Sometimes, Sandoval says, patients ask about her job and the ways she avoids contracting the coronavirus. She must be tested most every day, Sandoval says the patients always say.
And she just rolls her eyes and chuckles. That, she says, only happens if you’re an athlete.
As the pandemic continues to cause global economic disparity, experts scramble to forecast economic recovery. While no one can predict with precision what lies ahead for the economy, CFOs’ expectations and actions can be a helpful barometer. On a recent Resilient Podcast episode, Mike Kearney, Deloitte Risk & Financial Advisory CMO, and I discussed CFOs’ expectations for the economy, how they are handling hiring and retention, and how they can position their companies for growth. Here are the top takeaways.
1. CFOs Remain on the Defensive
CFOs’ economic expectations have plummeted. Our Q2 CFO Signals Survey marked the lowest readings on business expectation metrics since the first survey 41 quarters ago. Just 1% of CFOs rated conditions in North America as good, compared with 80% in the first quarter. A separate poll of 118 Fortune 500 CFOs conducted at the end of June echoed the sentiments of our Q2 Signals Survey and found that most respondents expect slow to moderate recovery. Over half expect they will not reach pre-crisis operating levels until 2021 and with 17% expecting 2022 or later.
Right now, a foremost priority for resilient CFOs is to ensure enough cash and liquidity for their company to operate. The focus on cost reduction outweighed revenue growth for the first time in the history of the Signals survey. As such, CFOs are doubling down on investing cash rather than returning it to shareholders, staying in existing geographies rather than moving to new ones, and focusing on organic growth as opposed to inorganic growth like mergers and acquisitions.
2. Navigating New Frontiers
Rest assured that the news isn’t all bad. The Q2 Signals Survey did find that 585 of CFOs see the North American economy rebounding a year from now. Notably, when asked whether they felt their company was in response or recovery mode, or already in a position to thrive, only about a quarter of CFOs said they were still responding to the pandemic. In fact, 37% of CFOs believe their companies are already in “thrive” mode. In the meantime, CFOs are reimagining company configurations, diversifying supply chains, and accelerating automation.
One obvious example of how CFOs are taking a resilient approach to navigate uncertainties is the widespread adoption of virtual work.
According to the Q2 Signals Survey, while just under half say they will resume on-site work as soon as governments allow it, about 70% of CFOs say those who can continue to work remotely will have the option of doing so. This will likely become a critical component to retaining top talent—a longtime concern for CFOs—particularly in a challenging economy. Resilient CFOs will continue to shift underlying business processes to accommodate routine remote work, including investing in new technologies for an efficient and effective virtual workforce, moving platforms to the cloud, and even adjusting internal control mechanisms to allow for off-site collaboration, budgeting, and financial planning.
3. The Role the CFO Can Play
Over the past decade or so, CFOs have evolved to become business strategists, but never has their role as stewards been more important as they grapple with how to navigate a business landscape that changes by the hour. In the coming months, CFOs should consider focusing on:
Revisiting their financing and liquidity strategies, centralizing cash release decisions with the treasurer, and leveraging tax planning to reduce cash outlays and preserve budget. Deliver a balance sheet with headroom, flexibility, and liquidity to take advantage of once-in-a-lifetime market opportunities that could present themselves.
Exploring different recovery scenarios, keeping an eye on important risk metrics that may signal a time to innovate. Evolve business models, processes, and technologies to maximize current performance and position companies to be able to seize new opportunities.
Keeping top talent by embracing a company’s best people, whether it is offering work-from-home capabilities, or nurturing followership through trust. Organizations that can retain their top people may be best positioned in recovery.
During recovery, a critical benchmark to track will be CFOs’ risk appetite. In the Q2 Signals Survey, the proportion of CFOs saying it is a good time to be taking greater risk plummeted to 27%. An upward tick of this finding may signal a greater focus on revenue growth, a willingness to expand into new markets, and an appetite for deal-making. Until then, by taking a resilient approach in the coming months, CFOs can position their companies for strong performance, future growth, and market-moving success as the economy starts to recover.