Since the start of the year, Mauritius has been faced with several forced holidays due to cyclones and heavy rains. These climatic events have had significant repercussions on business productivity and the economy as a whole. Will we be able to catch up on the accumulated delay? Point.
The closure of businesses leads to a halt in operations creating a direct loss of productivity and affecting the competitiveness of local businesses, especially as there is now an increase in the cost of doing business, particularly with the increase in the minimum wage.
At least that is the opinion of economic observer Tahir Wahab. “Small and medium-sized businesses will undoubtedly suffer and will have limited capacity to absorb this shortfall,” he believes.
In addition, our interlocutor suggests that there are disruptions in supply chains. This makes it difficult for companies to receive raw materials in a timely manner to maintain constant production. “This may cause delays in production and delivery. Which still has an impact on productivity,” he adds.
Likewise, he argues that those who work from home may face personal disruption or damage to their home, affecting their concentration and productivity.
The shortfall for businesses
Textile
Textiles is one of the sectors most affected during these forced furloughs, according to Ajay Beedasee, president of SME Chambers. Indeed, he explains that companies already establish a production schedule and have orders to be delivered on specific dates. “So a forced day off can disrupt the entire production line,” he says. He argues that this represents huge losses for businesses. “We will have to pay workers normally for a day when there is no production,” he laments.
However, he argues that businesses have an obligation to maintain good relationships with customers. “So, to be able to catch up and meet the deadline, workers are asked to work overtime. This is another additional cost to absorb,” says Ajay Beedasee.
Trade
Concerning the retail sector, Dominique Filleul, president of the General Retailers Association, affirms that if forced holidays occur at the start of the year, the impacts are not as significant on activities. “Indeed, like every year, the months of January and February are generally gloomy. So, the consequences are less compared to forced leave at the end of the year,” he explains. However, he says that as with all other sectors of the economy, forced furloughs represent a cost for operators in the trade.
Construction
The same goes for the construction sector. Ravi Gutty, president of the Building and Civil Engineering Contractors Association (BACECA), says businesses are forced to temporarily close during these forced furloughs, often leading to a complete shutdown of operations. “Weather can disrupt supply chains and delay material deliveries, which can delay ongoing projects and affect delivery times,” he says.
Furthermore, he maintains that this situation has a negative impact on employee morale. “Concern for personal safety and the health of loved ones can distract employees and reduce their concentration and efficiency at work,” he explains. Thus, he points out that forced leave leads to additional financial costs such as lost income, repair costs and security-related expenses.
Impact on the general economy
Who says slowdown in economic activities, says decline in government revenue. Tahir Wahab explains that sectors such as exports, tourism, agriculture, manufacturing and construction could experience a decline in production, also leading to a decline in gross domestic product (GDP) growth.
Additionally, he continues, the government often needs to invest in relief and rehabilitation efforts after cyclones and floods. This will further incur expenses for repairing infrastructure, assisting affected people and deploying resources for disaster management. “These increases in public spending can weigh on the government budget and have an impact on other development projects,” he maintains.
For his part, Dominique Filleul affirms that when businesses are affected, the impact will eventually be felt on the economy through a drop in income and growth. Ajay Beedasee agrees. “There’s no getting out of there. Regardless of the sector of activity, businesses represent the country's economy. So, if they face difficulties, it is the economy as a whole that will suffer,” he warns.
Recommendations to minimize losses
In order to minimize losses in the face of these frequent natural disasters, Dominique Filleul believes that it is first necessary to secure infrastructure at the workplace. “For example, for stores, we are working to make the windows stronger and ensure that there is no water infiltration inside the stores,” he says. According to him, we must first reduce the costs linked to material damage.
Furthermore, he emphasizes that businesses can offer the online sales service during bad weather. “Besides, this is an opportunity to be seized. Being at home, people have more time to surf shopping sites and shop,” he says.
For his part, Ajay Beedasee explains that not all activities can be carried out remotely. “In order to relieve businesses, I think the government can provide support to pay employees' salaries during bad weather,” says the president of SME Mauritius. For his part, Ravi Gutty believes that it is important to maintain proactive communication with employees, customers and suppliers during periods of forced leave. “We need to provide regular updates on the situation and discuss recovery plans, among other things,” he says.
In addition, he believes that there is a need to adopt flexible work policies, such as remote working to allow employees to continue working wherever possible, as well as the implementation of schedules alternative work schedules (rotating teams) to make up for delays.
For his part, Tahir Wahab argues that companies are already encouraging their employees to work remotely using technology. This, he says, allows employees to continue their work from home, ensuring that productivity is not completely disrupted. “However, in hospitality and manufacturing where physical presence is important, employers can adopt flexible working hours and include adjusting working hours, allowing part-time work or implementing of team rotations to guarantee continuity of operations and a minimum of disruption,” suggests the economic observer.
Questions to…
Imrith Ramtohul, economic observer: “Negative impact will be mitigated if employees can work remotely”
There were several holidays at the start of the year due to cyclones and floods. How do these disruptions affect business and worker productivity?
There is likely to be a decline in productivity and economic activity. Some companies may be unable to meet previously agreed deadlines for production or service delivery. The negative impact could, however, be less if employees are able to work from home and there are no power outages.
Although it may be tempting to quickly resume operations after such events, it is best to avoid rushing already stressed employees to catch up on missed deadlines. They will only be able to concentrate on their work when their own personal situation has improved or stabilized. In my opinion, a little compassion is needed during such difficult times.
What are the consequences of these forced holidays on the economy?
Companies that do not offer Work from home will likely be negatively affected, as mentioned above. There is an opportunity cost to the economy in terms of lost production. The real economic impact of these “forced leaves” is, however, very difficult to quantify.
In my opinion, even teleworking does not always guarantee increased productivity. The employee might still be stressed at home due to the cyclone and floods. Additionally, there is no guarantee that electricity or internet connection will be continuously available. Lower economic activity could therefore lead to reduced economic growth, at least in the short term.
What strategies can businesses implement to minimize productivity losses during periods of forced leave?
Having a well-developed business continuity plan will help. Businesses should proactively consider actions that can be taken to prevent or reduce the likely negative effects of cyclones/torrential rains and take steps to recover quickly from unavoidable events.
For example, should the business stay open longer immediately after a hurricane? Good communication is also very important before and after bad weather. Businesses may also need to communicate with other stakeholders before, during and after a cyclone or flood for urgent matters. Such communication could, however, be difficult if there are power outages or internet connection interruptions.
