Understanding The Covid-19 Economy

May 17, 2020 00:13:45
Understanding The Covid-19 Economy
The Josh Bersin Company
Understanding The Covid-19 Economy

May 17 2020 | 00:13:45

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Show Notes

The COVID-19 Economy is different - built on trust, safety, and values. As hard as it has been, we're in the middle of an economic transformation - one that impacts every business and all our home and business lives.

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Episode Transcript

Speaker 0 00:00:01 Hi, this is Josh person. Welcome to Research-Based Perspectives on the ever-Changing World of work, leadership, learning, and HR with a heavy dose of insights on the exciting world of HR technology. This week I'm gonna talk about economics because we just finished one of the most shocking unemployment reports in my career. Just last week we saw announcement of a 14.7% unemployment rate in the United States, almost 30 million Americans are without jobs. And of course, there's all sorts of articles about how we're going to be entering a massive recession and maybe even a global depression. There's no question this is a business slowdown, but actually it's much, much more than that. I believe what's really happened as a result of the pandemic is a transformation. A transformation in the way we work, a transformation, in the way we buy things and consume the way we interact with each other, and obviously in the way our businesses operate. Speaker 0 00:01:04 And if you go back in time and think about where we were in January of 2020, we were at the very peak of an 11 and a half to a 12 year growth cycle. And we were fraying at the edges. I don't know about you, but I was getting a little bit of tired of getting it up at four in the morning to get to the airport for a seven or a 7:30 AM flight, waiting in traffic in every freeway all times of the day, not being able to get a restaurant reservation because everything was full. Um, and finding out that almost everything in our life was escalating in price above the standard of living and above our earnings. That was because we were at the very peak of an extended, somewhat tax reduction fueled economic cycle. Income inequality was at the highest level that I've seen it. Speaker 0 00:01:57 Um, rich people were making more money. Poor people were having a harder time getting along. The economy was suffering. Well, anyway, you, you, you know what I'm talking about. There were lots of things we were struggling with to say nothing of the fact that it was very hard to hire people. Most of you were spending a lot of money on re-skilling because you were afraid of automation. And employees were at the highest level of anxiety that I had ever seen them. In fact, despite years and years and years of work on employee engagement, the level of anxiety and disengagement at work before the pandemic was very, very high. Roughly a third of the workforce was saying that they would even undermine their employer because it was so hard to just get their jobs done. So here we are now, 60 to 90 days after the beginning of the pandemic, looking at massive, massive changes. Speaker 0 00:02:48 Food service, transportation, retail, all forms of entertainment jobs have been, you know, 50 to 60% of them have been furloughed. Um, and of course that's affected many, many of you and many of your companies and many of your people. But in reality, if you look at what's going on, even right now, the job market has more than 8 million open jobs. Now, that's not an all-time high, but that's not a low either. And that's because what's really happening is a massive transformation of the economy. Now, unfortunately, because of the lack of leadership in the federal government, we're not playing it like that. We're playing it as a reopening, uh, sort of a rush reopening to try to get everybody back to work. But actually going back to work doesn't make any sense because the job you had before the pandemic isn't even the same job anymore. Speaker 0 00:03:44 Now you're gonna work at home, you're gonna work with a mask on. You're gonna work in a much more isolated, separated physical location. You're going to have to serve customers in a quite a different way. You're not gonna be walking into staff meetings or making sales calls face-to-face with customers or taking customers out to lunch. If you're in the sales organization, your marketing's gonna change. You're gonna focus on health and sanitized workspaces and products. And in fact, digital is going to take over everything. Now, we've been talking about digital for a long time. This is not the first time we've talked about this, but now we really are living a digital life because we have to. And so technologies like work at home, video, virtual reality, online learning, all these things that we've been working on for the last two decades have really accelerated to say nothing of telemedicine, which has gone up by two orders of magnitude in the last 90 days, selling online marketing in new and exciting ways, and all sorts of new media, including to say nothing of TikTok and things like that, that are exploding in popularity because we're understanding that these digital products and digital services are critical. Speaker 0 00:04:54 Now, what does it really mean to you if you're a white collar worker? Of course you've been working from home. If you're a blue collar worker, it's much harder. Uh, you're probably starting to be forced to go back to the office or the location and you're probably questioning and wondering if it's going to be safe and if the protocols are being put in place are really, um, gonna work. So what that means for us in HR is that we have to take this transformation really seriously in most cases, for almost every company that I talk to, and this concludes pharmaceutical companies, retailers, advertising agencies, consulting firms, healthcare providers, there is a dr. Dramatic opportunity to redefine what they do and how they do it in a brand new way. And that opportunity is not only an opportunity to help individuals and workers and managers come back to work in a new and safer environment, but also to change the company itself. Speaker 0 00:05:52 This week, just this week, we had three conversations with very senior executives who said, you know, we've been meaning to do a much more integrated digital transformation of our businesses, create more common services and skills across various business units. And we've been struggling to find the time and the energy and the right way to do this. Now we're going to do it because when there's this much transformation going on in the customer side of the business, it's a perfect time to go through the tra same transformation in the internal part of the business. Last week I talked to Derek Belch, the CEO of Striver, um, one of the pioneers in immersive learning. And he told me that one of his customers is a head of learning for a large organization and said he was spending $50 million a year on travel just for training. He said, I'm not doing that anymore. Speaker 0 00:06:42 That money is now available. If you can come in for a couple million dollars and build me a virtual learning experience, I'm ready to buy it. And those kinds of stories are happening in every company I talked to. By the way, one of the things that's also happening is this shift in HR technology away from record keeping and HR process management software towards what I call work tech. Everything we've been working on in HR technology to try to make it a better experience for employees is now landed in our laps. We have to make the entire work experience simple, collaborative, meaningful, of course, AI based and very, very easy because everybody is interacting in a much more digital way than ever before. The second thing I wanna mention in terms of transformation is your business model. Now, I know a lot of you have sent people home and you're bringing them back and you're writing all sorts of protocols and workbooks and playbooks and procedures and setting up facilities managers and redesigning the offices or maybe shutting down offices to try to accommodate this new change. Speaker 0 00:07:51 But underneath that, I think you have to be aware of the fact that there's something bigger happening. Regardless of what company you're in, you now have an opportunity to go to market in a different way. If you were a gym, you're probably selling online yoga classes. If you're a hospital, you're now delivering telemedicine. If you are selling financial counseling, you're now delivering it electronically to many, many, many more people. If you were in sports and entertainment, you're probably considering getting into gaming. If you're a retailer or a grocery company, you're getting into distributed distribution and delivery. If you're an oil and gas company, you're probably trying to figure out how to get into solar or another business entirely <laugh>. Um, and so, um, while we are going through our typical HR practices of redefining our talent programs and our workplace practices for the coming back to work, we have to also strap on and partner closely closely with business leaders on these new business models. Speaker 0 00:08:55 One of the most interesting stories I uh, ran across this last week was a large bank in Canada that had shut down many of their branches. In the first week or two after the pandemic, they turned all their branch workers into teleservice agents, which, you know, you would expect, sent them all headphones and all sorts of tools to teach 'em how to con conduct transactions online. But what they quickly found out was that once they had shut down all these locations and people started calling, the types of questions they were asking were different, they were asking for questions like, how do I conduct unemployment and how do I rebudget my, uh, budgets and what do I do in my credit card debt? And what about my healthcare insurance? And things that were much more consultative in nature. And so what the head of HR did was partner with the advisory services part of the bank that mostly focused on high wealth individuals and said, let's come up with a set of services and training for all of these folks that are taking care of our customers online to give them more advice and counsel. Speaker 0 00:09:54 And sure enough, their bank balances and their revenues are starting to go up again. So that example is just a perfect example of how this particular opportunity, which we didn't predict or actually ask for, is actually opening up doors to new business models that we haven't thought of before. The final thing I want to touch on in this podcast is skills. Um, we've been talking about skills for a long time and I'll do a podcast on skills cuz I have a lot of things to talk about there. But the one thing I think you'll find is that re-skilling, upskilling, or reinvention of roles is more urgent than ever right now. And the reason for that is that almost 90% of the jobs in the United States, and this isn't true in most developed economies, are service related jobs. Sales, design, engineering, uh, consulting, hr, it, these are not, they are technical in nature, but the actual product and offering that we're delivering with these jobs is a service related job. Speaker 0 00:11:00 So all of the soft skills of listening, understanding, communicating, persuading, analyzing, leading, cajoling, <laugh>, serving people, helping people, those are the skills of the future. So let me remind you that, uh, as you reorganize your company and move people back to work, refocus on those power skills. I've done a lot of research on that and I have a really nice model on these power skills. They include all of the soft skills that you would typically consider in a leadership program, but also skills of kindness, generosity, forgiveness, um, things that are really, um, sort of soft in nature are now becoming critical to this new world ahead. So let me stop there. This is my first podcast in this new format, and I'm planning on doing more of these and I'm very interested in your feedback. To me, this is just an important time to think about your job as not only helping your company to recover, but help your company to regenerate or recreate itself or transform itself in the middle of this pandemic. Thank you very much for listening. And of course, I'm always interested in your stories and your feedback. Speaker 0 00:12:32 If you like what you heard, please join the Josh Bersen Academy, the world's professional development academy for hr for less than a cost of a nice dinner in a town near you. You can have an entire year's access to hundreds of courses, articles, research studies, case studies, and an entire community of more than 10,000 HR professionals all collaborating with each other to help you learn and solve the problems in your particular company. We call the Burson Academy, the world's home for hr, and you'll find it to be one of the most important parts of your career and your company's HR strategy for the years ahead. Thank you.

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