In the third of a series of sector-specific blogs, we look at the impact of Covid-19 on the business-to-business (B2B) services sector, and what the future might hold.
Business-to-business services are described by PWC as ‘seven disparate sub-sectors in one’ which employ 2.5 million employees serving all parts of the UK economy. Unsurprisingly the impact of Covid-19 on B2B businesses is heavily influenced by which sectors these businesses serve. For example, businesses providing services for essential retail (grocery), healthcare, and local government have done well, whereas those providing services for sectors that have had to shut down during lockdown being worse off. Nonetheless, in terms of working practices during the ‘new normal’ the sector has a massive advantage in that 72% of its workers can work from home, and only 27% come into close physical contact with other workers when they are at work as normal.
In common with businesses across all sectors, those that have done well during the pandemic in B2B services are the ones which have pivoted and repurposed to suit differing demand. It will also come as no surprise that businesses which were already embracing digital and remote working technologies have fared better than those which needed to start from scratch with these in March. Many B2B businesses have found that a working from home model works particularly well for them, and may continue with this post-pandemic in order to save costs on office space.
Although businesses across the UK are tightening their belts at the moment, it is possible that this might be an advantage for certain B2B service providers, as businesses look to remodel and outsource in order to cut costs. PWC predicts that there will be particular demand for outsourced compliance and health and safety as employers now have to make safety of the working environment a much more central priority.
In general, B2B service businesses will be looking at diversification in order to survive any resurgence of the virus, or future pandemic. Those businesses reliant on one sector will be considering how they can break into new sectors in order to spread their risk.