It’s the end of the (old) world as we know it (and I feel fine)
Now I have finished with my review of how businesses and individuals have been coping, (Click to read Part One and Part Two of the New Normal) I thought I would conclude the final part with some predictions:
- Too many people, too few jobs – I do believe that we will start to see an increase in the announcement of redundancies as the Government looks to end the Job Retention Scheme. Once businesses start to incur the significant costs of staff and premises it really does depend on how their revenues recover post lockdown as to whether they can maintain their pre-covid employment levels. We are already seeing some businesses (including those owned by Gordon Ramsay) using the Job Retention Scheme funding to pay people through their redundancy notice.
- Head Office/Home Office balance – This isolation has proved that a lot of people can successfully work from home and businesses are still able to function. Offices will need to be repurposed in order to cater for reduced employment densities (most offices are now aiming to operate at 20-25% capacity immediately after lockdown easing) and the way we interact with them will change. Some businesses have already made the decision to not open their offices until 2021. Most of us will still desire that face-to-face interaction and collaboration with our colleagues, albeit, on a less frequent basis.
- Hours to suit – Flexi-time will see a resurgence. Most businesses will need to show willing to enable their staff to commute with minimal exposure at peak times on public transport. The authorities and environmentalists would like to see everyone walk/cycle to work (participation will inevitably be higher during the nice weather) but where public transport is the only practical mode it will mean flexible start and finish times to minimise peak travel.
- Digital dominance – We will all emerge from lockdown with new abilities for the digital age – particularly around remote working and video communication. I feel that this will help diminish the need for some physical face-to-face contact in order to get business done. It will mean greater scrutiny and justification of travel, particularly with use of public transport. There will also be an emergence of new rising stars within businesses who have a natural flair for engaging in the digital world – some skills may translate from the physical world, other competencies will be discovered or developed.
- Home delivery and online will rise sharper than recent historic growth levels – The grocery sector has seen phenomenal growth in demand for online services in the last few months, to the extent that they have been unable to fulfil all the potential. I believe this will continue as more capacity is added and the crisis proves to be the trigger that forces a step-change in people’s behaviour, with more preferring to have their regular groceries delivered, to the detriment of the environmental considerations.
- People will shop local and support their independents – The successful independents have been very good at adapting their offer in the crisis and really engaging in support of their local customers. I believe there will be a lot more emphasis that people put on supporting these independent businesses and shopping local.
- Retail Phoenix from the flames – There will always be a physical retail/leisure/F&B sector in the UK but there will be some clear winners and losers that emerge. Some businesses will be rendered flightless (excuse the analogy) and be left to wither in the embers, struggling with business models that are unsustainable moving forward. Other businesses will adapt and survive.
- The death of retail browsing? The old ‘retail therapy’ rule book will need to be ripped up. Conversion rates should increase as people make visits with a clear purpose, and average basket sizes will increase as shopper frequency will be down and customers will be unable to try before they buy (due to the changing rooms being unavailable). This will result in an increase in returns and in the challenge retailers face on getting this returned stock sold.
- Retail Property is broken, and it needs Landlords and tenants to fix it – Both parties need to share the pain out of the current crisis. There has to be a recognition that Landlords still have bills to pay and so withholding rent for an extended period of time may not be acceptable. This crisis will drive a fundamental re-correction in retail rents in order to take account of the new function of retail and ongoing rental sustainability. There also needs to be a drive for more flexible leases where both parties share in the upside but share the pain of depressed performance.
- Staycation havoc – With businesses encouraging staff to take holiday, people wanting a change of scenery from their home, and continued uncertainty on the opening up of international borders (and who will be around to take us to foreign climes) this can only mean that everyone will be holidaying in this country in 2020. My advice, particularly if you have children, is to get your October half term and Xmas trips booked as soon as possible as prices are likely to go through the roof.
- We will be better prepared for next time – This may be a once in a lifetime event (or longer) but be sure that UK plc will need to become a little more self-sufficient in certain areas – particularly with regards necessary medical supplies. Who is to say that some forms of manufacturing won’t come back to our shores?
- It will be an employers’ market – to a certain degree. With too many candidates chasing too few roles the big challenge will be efficiently filtering applications. This is where, as a recruiter, we can do our big value add to hiring managers and HR teams. This will also mean that candidates will have to be more on point throughout the process than they have ever been, from their CV and covering letter, to interview skills – again, something we are well placed to support.
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