HOW ARE YOU GOING?
At the end of 2020, we asked some of our contacts how they had found the past year with the impact of Covid-19, and what they felt 2021 and the road ahead held in store?
Not a scientific or comprehensive exercise, and certainly skewed towards the Australian experience and the sectors of technology and contingent labour (hospitality, events, construction, logistics and professional services), our conversations and findings may still be of interest. A framework to consider your own experience and see how experiences were both shared and yet still divergent.
Here is what we at SHFT found from these interviews, in a short summary report.
Asked about the early days of 2020, almost everyone was booming and brimming with optimism. The economic environment was buoyant, 10 out of 10 respondents felt their businesses had traction, and that they were growing and felt that the 2020 year would be one of continued expansion and opportunity. Then of course the Covid-19 Pandemic hit.
Asked what happened from March 2020 onward, 3-in-10 respondents said this positive momentum stalled or stopped and hasn’t recovered since. 4-in-10 have seen a significant downturn in business and are still recovering, and 3-in-10 went through a period of initial confusion or instability that has since recovered. One way or another, everyone was impacted. Asked a different way and talking about actual business activity and revenue, 30 percent have seen a large decrease in business or failure of their plans, 40 percent have seen a decrease, 20 percent no significant or residual change, and for the lucky and well positioned 10 percent, actual growth.
For many in Australia, unlike other parts of the world, it isn’t the actual Covid-19 virus in the sense of illness, hospitalizations and direct consequences, so what specifically has driven these business impacts among respondents.
The consensus is, that the change in social, interpersonal and business interactions between people is the impact. It sounds obvious, but people not coming together physically in the conduct of their work and their communal societal consumption and interaction has been the major driver of change and business outcomes. Asked about specific types of impact, we were told:
SOURCES OF DIRECT BUSINESS IMPACT
– 9-in-10 impacted by lock-downs and restrictions on human movement
– 6-in-10 impacted by international travel bans
– 6-in-10 impacted by social distancing requirements
– 5-in-10 impacted by supply-chain issues or similar proximity impacts
– 5-in-10 impacted by employee changes, availability, sickness provisions or other HR impacts
– 4-in-10 impacted by restraint of social gatherings
– 2-in-10 impacted by social hygiene requirements.
SO WHAT DID YOU DO?
Asked how businesses reacted, 8-in-10 made changes to their business strategy, 7-in-10 made significant structural changes, 4-in-10 made significant changes to their workforce and 2-in-10 made significant changes to their technology and technical environment.
In the specific stories, there seemed to be two main threads. Firstly dealing with greater uncertainty, everything from moving meetings, timings, refunding, re-booking and re-aligning strategy, delivery and market activity. Secondly dealing with internal people and work methods, from retaining and remodelling teams, adapting to remote and virtual work models, and every aspect of human resource management in an uncertain, insecure and changing macro-economic environment.
JOBKEEPER AND GOVERNMENT SUPPORT IN AUSTRALIA
It is incongruent that in Australia only 4-in-10 respondents reported significant workforce changes, despite 8-in-10 businesses making large strategic changes and 7-in-10 reporting significant structural change. So did Job-Keeper and other related initiative reduce or delay workforce remodelling rates of change in Australia?
When asked, 70 percent of the respondents said their businesses were eligible for at least some Job-Keeper support, largely matching the 70 percent who have seen a decline in business activity and revenues.
Drilling down, 3-in-10 said Job-Keeper had no impact, 1-in-10 said it smoothed the road, 4-in-10 said that Job-Keeper saved at least some redundancies or workforce remodelling, and a very significant 2-in-10 said that Job-Keeper may have even kept their business afloat.
Not everyone was equally protected, although around 70 percent of business respondents had some access to Job-Keeper, this dropped to around 43 percent when asked in respect of the same businesses casual, contract or otherwise contingent workforces. The indication is that certain professions, industries and workforce participation types were structurally disadvantaged and that the support was far from evenly applied.
With the majority of respondents making structural and operational changes, we spoke about technology and specifically their Human Resource and Communications technology (HR Tech).
In an environment where there is a dramatic shift to remote and virtual working, we haven’t changed our communications methods quite so quickly.
Only 6-in-10 respondents use some form of system or platform for co-ordination and administration of front-line or otherwise decentralised or remote workers. Most businesses still use a combination of more traditional workforce communication methods. 8-in-10 depend on email, 7-in-10 utilise text (SMS) messages, 6-in-10 depend on phone communications and 2-in-10 have some form of social media in the mix. Clearly for most businesses it is a combination and often the clarity around business to employee communication lags behind the clarity of business to customer communication and sophistication. There is a technology gap inside the workforce.
When asked why the gap exists and what barriers are preventing change, 6-in-10 see cost of change as a barrier, for 5-in-10 it is a knowledge gap, for 3-in-10 it’s a failure of decision making or prioritization. Even for the 20 percent or so who have experienced significant technical failure or issues with their human resource management environment, it is often just considered ‘the way it is’ and not seen as a driver of opportunity, efficiency and competitive advantage.
HOW DOES 2021 LOOK TO YOU?
The good news is that although Covid-19 and macro-changes are going to be with us for some time, respondents are generally positive about 2021 and beyond.
Only 2-in-10 have negative predictions for 2021, 5-in-10 are cautiously positive about the economic environment and how 2021 will pan out for their business, and 1-in-10, those for whom the transformation has driven opportunity, predict that 2021 will be a record year of growth for their business.