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Beyond COVID-19: Winners, Losers, and the Future
In my earlier article, “Leading in a Time of COVID-19”, I explored the challenges companies would face as social distancing measures took hold on our societies and economies. Now, as we start to talk about easing COVID-19 measures, what lies ahead?
Winners and Losers
There are already winners and losers. The biggest losers are the travel and tourism industries while everyone stays home. Restaurants, bars, live sporting events, and live entertainment have also taken big hits.
But it has not been bleak across the board – there are some economic winners during COVID-19. Streaming services, such as Netflix, have seen a dramatic uptick in subscribership. Related to online streaming, the porn industry has also enjoyed a healthy economic rally, and an industry shakeup as both consumers and performers spend most of their time at home. Another economic winner is food delivery services, such as Uber Eats.
Uncertainty is the Only Sure Thing
When we ask what will come as COVID-19 restrictions ease, what can we reliably predict? The first thing we can say with a high degree of certainty is the restrictions will cyclically ease and tighten over the next few years as COVID-19 cases surge and fade. Epidemiologists tell us an infection like COVID-19 eventually dies off or at least fades into obscurity when approximately 70% of a population is protected through natural and vaccinated immunity. Until that 70% “herd immunity” is achieved, COVID-19 flare-ups will ebb and swell, demanding renewed restrictions. We have seen COVID-19 resurgences in China, Hong Kong, and Italy, and governments have responded with renewed restrictive measures to control the second wave. In other words, we are a long way from normal, whatever that turns out to be.
At the individual level, the hardest hit is the worker who (used to) occupy lower-paying jobs. With a few exceptions, such as workers in long-term care facilities, these positions were swept away in the tsunami of COVID-19 layoffs, and very few employers are hiring. The Canada Emergency Response Benefit (CERB) and Canada Emergency Wage Subsidy (CEWS) are essential and welcome support for this fragile segment of the Canadian population. As the economy starts and stalls over the coming months or years, low-income earners will remain economically vulnerable, and Canada’s emergency response measures must continue to support them. It has been a long-understood connection that the suicide rate among unemployed people is about 2½ times higher than for employed people. There are very real social and personal risks at stake, and Canada has a role and duty to minimize these risks.
A recent study shows people who make over $80,000 annual salary are the most likely workers to remain employed by working from home. This population will have a disproportionate impact on the post-COVID-19 world. Already a significant element of work-at-home employees are expressing a reluctance to return to work when COVID-19 restrictions ease. Several factors play into their thinking, including a lower financial burden (transportation, clothing, food, and childcare costs), a more relaxed and less stressed environment, more precious “us” time in a day without commuting, and a better work-life balance that employers love to talk about. Even employees with children at home are discovering they can put in a productive day’s work by being creative and flexible in their work hours.
Studies show what a person opines about their future behaviour, and what they eventually do, are often different. Not everyone who predicts they will forever work at home will do so. But on a social scale, we must brace for a proportion of the highly skilled labour force refusing to return to the office environment. Some will continue to work at home through their employers’ blessing or capitulation. Others will quit for employers or careers with more flexible work-at-home policies, while those near the sunset of their careers will retire earlier than planned.
Before COVID-19, a significant number of organizations migrated to a cost-saving Office 2.0 construct that packs employees in high-density urban-core office spaces with few physical barriers to prevent contagion transmissions. It is unlikely a post-COVID-19 world will tolerate such working environments, and it could take months or years to recalibrate the office landscapes. This office space conundrum plays into the hands of employees who discovered their preference for working from home.
Organizations are also starting to realize that they can survive, function, and even thrive with a significant proportion of their workforce staying at home. Cost savings are already challenging companies to rethink the need to bring all their employees back to the physical workplace.
The Future Starts Today
What does all this mean when we look forward? Eventually, we can see the office taking on a very different landscape, where employees work from home most of the time and commute to the mothership when needed. Competitive forces were already nudging many organizations along that trajectory. COVID-19 may prove to be the catalyst that accelerates the transformation to the virtual office space.
Even before COVID-19, companies like Air Canada allowed call center employees to work from home. They don’t commute to a physical call center when everything they need is available at home: a high-end laptop, a large monitor, and a reliable, fast, and secure Internet connection. As both the employee demand and employer interests grow for work-at-home, organizations will reinvent their relationship with their employees to embrace the work-at-home model.
To succeed in the remote working model, management must become more goals focused, and more coaching oriented. When everyone works in the office, you can observe and control how people do things. The remote workforce requires a different approach. Managers must coach strong work habits instead of correcting observed instances of bad behaviour. Employees must be given clear, achievable, and measurable goals, and managers must employ reliable and unbiased earned-value frameworks that measure and manage progress on individual tasks and among teams. Speaking of teams, teamwork and team leadership take on new and more important dimensions when people work remotely and meet virtually over video conferencing.
At the social level, we can learn from China. Just as China was the first hit by COVID-19, that country was first to reach stability. China has had virtually no COVID-19 deaths for over two months and started relaxing some restrictive measures.
It is a good news/bad news situation for the auto industry in China. The desire for new personal automobiles has increased significantly, presumably because employees no longer want to risk crowded commuter trains and busses. The bad news is fewer people have the purchasing power to buy a car compared to the pre-COVID-19 economy. We expect this dynamic tension to play out across the global marketplace.
In Canada, we expect a rise in personal and corporate debt and bankruptcies. Bankruptcies are a boon for the trustee industry, but bad news for those who suffer the demise, and for the economy left with less money to grow upon.
Government debt will also rise. At last estimate, the Canadian government will spend an entire year’s budget in emergency COVID-19 relief. The good news is Canada’s financial position is solid – our debt to GDP ratio is the lowest among the G7 nations, and global interest rates are low. This is not to say government relief spending will escape some flavour of downstream belt-tightening, but if interest rates remain low, the benefit these emergency measures deliver will far outweigh the eventual costs.
Online shopping will continue to expand, not just because of the stay-at-home measures. Still, even after COVID-19 restrictions relax, as more people grow comfortable with online shopping, they will prefer the convenience, better selection, better-informed product decisions, and lower prices of online shopping compared to the in-store experience.
Recent polls have indicated people will eat and drink at home long after the pubs and restaurants reopen. Consumer wariness, not government policies, will dictate how quickly the economy returns to the new normal.
Some parts of the economy will grow quickly. We can expect a surge in telecom infrastructure investments across Canada. As more people work, shop, and play from home, the demands for a secure and available Internet will continue to grow. Cybersecurity and cyber-resilience will never be more important, and they will play a critical role in the post-COVID-19 economy. EXA already began a strategic shift toward Cybersecurity before COVID-19 struck, and we continue our expansion into that market even during COVID-19.
EXA is Rebuilding
During the COVID-19 pause, EXA is helping our clients prepare for when the COVID-19 restrictions relax. Companies will need to drive up sales to fund the post-COVID-19 rebuilding efforts quickly. EXA works with our clients to best position them to capture large sales early in the COVID-19 recovery era. During the economic downturn, EXA has invested in our infrastructure, making our services more responsible and capable.
In Conclusion
Uncertainty is the watchword over the coming months and years. COVID-19 will not go away soon, but we can keep it in check if we do not succumb to the temptation to rush forward blindly. Vigilance and patience are the prices we all pay – as individuals, corporations, and governments – to earn the privilege to live in a healthy and vibrant nation like Canada. As we rebuild, we must remind ourselves, and we must encourage each other, to reach boldly, but tread with prudent assuredness, toward our new normal.
There will continue to be winners and losers – that is the Darwinian nature of a free market. But there is a difference between losing to stand up and fight another day, and being trampled. As individuals, as businesses, and as a country, we bear the responsibility to harness our new wins by creating prosperity and rebuilding our strength – both of which we will need to continue to support the most vulnerable parts of our society who have been economically trampled by COVID‑19.
More Episodes
In my earlier article, “Leading in a Time of COVID-19”, I explored the challenges companies would face as social distancing measures took hold on our societies and economies. Now, as we start to talk about easing COVID-19 measures, what lies ahead?
Winners and Losers
There are already winners and losers. The biggest losers are the travel and tourism industries while everyone stays home. Restaurants, bars, live sporting events, and live entertainment have also taken big hits.
But it has not been bleak across the board – there are some economic winners during COVID-19. Streaming services, such as Netflix, have seen a dramatic uptick in subscribership. Related to online streaming, the porn industry has also enjoyed a healthy economic rally, and an industry shakeup as both consumers and performers spend most of their time at home. Another economic winner is food delivery services, such as Uber Eats.
Uncertainty is the Only Sure Thing
When we ask what will come as COVID-19 restrictions ease, what can we reliably predict? The first thing we can say with a high degree of certainty is the restrictions will cyclically ease and tighten over the next few years as COVID-19 cases surge and fade. Epidemiologists tell us an infection like COVID-19 eventually dies off or at least fades into obscurity when approximately 70% of a population is protected through natural and vaccinated immunity. Until that 70% “herd immunity” is achieved, COVID-19 flare-ups will ebb and swell, demanding renewed restrictions. We have seen COVID-19 resurgences in China, Hong Kong, and Italy, and governments have responded with renewed restrictive measures to control the second wave. In other words, we are a long way from normal, whatever that turns out to be.
At the individual level, the hardest hit is the worker who (used to) occupy lower-paying jobs. With a few exceptions, such as workers in long-term care facilities, these positions were swept away in the tsunami of COVID-19 layoffs, and very few employers are hiring. The Canada Emergency Response Benefit (CERB) and Canada Emergency Wage Subsidy (CEWS) are essential and welcome support for this fragile segment of the Canadian population. As the economy starts and stalls over the coming months or years, low-income earners will remain economically vulnerable, and Canada’s emergency response measures must continue to support them. It has been a long-understood connection that the suicide rate among unemployed people is about 2½ times higher than for employed people. There are very real social and personal risks at stake, and Canada has a role and duty to minimize these risks.
A recent study shows people who make over $80,000 annual salary are the most likely workers to remain employed by working from home. This population will have a disproportionate impact on the post-COVID-19 world. Already a significant element of work-at-home employees are expressing a reluctance to return to work when COVID-19 restrictions ease. Several factors play into their thinking, including a lower financial burden (transportation, clothing, food, and childcare costs), a more relaxed and less stressed environment, more precious “us” time in a day without commuting, and a better work-life balance that employers love to talk about. Even employees with children at home are discovering they can put in a productive day’s work by being creative and flexible in their work hours.
Studies show what a person opines about their future behaviour, and what they eventually do, are often different. Not everyone who predicts they will forever work at home will do so. But on a social scale, we must brace for a proportion of the highly skilled labour force refusing to return to the office environment. Some will continue to work at home through their employers’ blessing or capitulation. Others will quit for employers or careers with more flexible work-at-home policies, while those near the sunset of their careers will retire earlier than planned.
Before COVID-19, a significant number of organizations migrated to a cost-saving Office 2.0 construct that packs employees in high-density urban-core office spaces with few physical barriers to prevent contagion transmissions. It is unlikely a post-COVID-19 world will tolerate such working environments, and it could take months or years to recalibrate the office landscapes. This office space conundrum plays into the hands of employees who discovered their preference for working from home.
Organizations are also starting to realize that they can survive, function, and even thrive with a significant proportion of their workforce staying at home. Cost savings are already challenging companies to rethink the need to bring all their employees back to the physical workplace.
The Future Starts Today
What does all this mean when we look forward? Eventually, we can see the office taking on a very different landscape, where employees work from home most of the time and commute to the mothership when needed. Competitive forces were already nudging many organizations along that trajectory. COVID-19 may prove to be the catalyst that accelerates the transformation to the virtual office space.
Even before COVID-19, companies like Air Canada allowed call center employees to work from home. They don’t commute to a physical call center when everything they need is available at home: a high-end laptop, a large monitor, and a reliable, fast, and secure Internet connection. As both the employee demand and employer interests grow for work-at-home, organizations will reinvent their relationship with their employees to embrace the work-at-home model.
To succeed in the remote working model, management must become more goals focused, and more coaching oriented. When everyone works in the office, you can observe and control how people do things. The remote workforce requires a different approach. Managers must coach strong work habits instead of correcting observed instances of bad behaviour. Employees must be given clear, achievable, and measurable goals, and managers must employ reliable and unbiased earned-value frameworks that measure and manage progress on individual tasks and among teams. Speaking of teams, teamwork and team leadership take on new and more important dimensions when people work remotely and meet virtually over video conferencing.
At the social level, we can learn from China. Just as China was the first hit by COVID-19, that country was first to reach stability. China has had virtually no COVID-19 deaths for over two months and started relaxing some restrictive measures.
It is a good news/bad news situation for the auto industry in China. The desire for new personal automobiles has increased significantly, presumably because employees no longer want to risk crowded commuter trains and busses. The bad news is fewer people have the purchasing power to buy a car compared to the pre-COVID-19 economy. We expect this dynamic tension to play out across the global marketplace.
In Canada, we expect a rise in personal and corporate debt and bankruptcies. Bankruptcies are a boon for the trustee industry, but bad news for those who suffer the demise, and for the economy left with less money to grow upon.
Government debt will also rise. At last estimate, the Canadian government will spend an entire year’s budget in emergency COVID-19 relief. The good news is Canada’s financial position is solid – our debt to GDP ratio is the lowest among the G7 nations, and global interest rates are low. This is not to say government relief spending will escape some flavour of downstream belt-tightening, but if interest rates remain low, the benefit these emergency measures deliver will far outweigh the eventual costs.
Online shopping will continue to expand, not just because of the stay-at-home measures. Still, even after COVID-19 restrictions relax, as more people grow comfortable with online shopping, they will prefer the convenience, better selection, better-informed product decisions, and lower prices of online shopping compared to the in-store experience.
Recent polls have indicated people will eat and drink at home long after the pubs and restaurants reopen. Consumer wariness, not government policies, will dictate how quickly the economy returns to the new normal.
Some parts of the economy will grow quickly. We can expect a surge in telecom infrastructure investments across Canada. As more people work, shop, and play from home, the demands for a secure and available Internet will continue to grow. Cybersecurity and cyber-resilience will never be more important, and they will play a critical role in the post-COVID-19 economy. EXA already began a strategic shift toward Cybersecurity before COVID-19 struck, and we continue our expansion into that market even during COVID-19.
EXA is Rebuilding
During the COVID-19 pause, EXA is helping our clients prepare for when the COVID-19 restrictions relax. Companies will need to drive up sales to fund the post-COVID-19 rebuilding efforts quickly. EXA works with our clients to best position them to capture large sales early in the COVID-19 recovery era. During the economic downturn, EXA has invested in our infrastructure, making our services more responsible and capable.
In Conclusion
Uncertainty is the watchword over the coming months and years. COVID-19 will not go away soon, but we can keep it in check if we do not succumb to the temptation to rush forward blindly. Vigilance and patience are the prices we all pay – as individuals, corporations, and governments – to earn the privilege to live in a healthy and vibrant nation like Canada. As we rebuild, we must remind ourselves, and we must encourage each other, to reach boldly, but tread with prudent assuredness, toward our new normal.
There will continue to be winners and losers – that is the Darwinian nature of a free market. But there is a difference between losing to stand up and fight another day, and being trampled. As individuals, as businesses, and as a country, we bear the responsibility to harness our new wins by creating prosperity and rebuilding our strength – both of which we will need to continue to support the most vulnerable parts of our society who have been economically trampled by COVID‑19.
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