College graduates are entering a business landscape unlike any other in modern history. The COVID-19 pandemic created a crisis management catastrophe for businesses worldwide and lessons in organizational resilience for current and future business leaders. Innovative companies with workforce resiliency and enterprise agility adapted well and thrived, while others did or could not. As a result, some businesses transformed, and those adaptations will likely have long-term productivity benefits, while others may suffer long-haul damage from COVID-19.
Businesses with financial resources and human ingenuity responded to COVID-19 well by harnessing the power of trending innovations for competitive advantage. According to a McKinsey survey, companies digitized activities at rates 20 to 25 times faster than they had previously imagined. Such innovation may prove an essential long-term adjustment to technology, but one that would have been harder to implement during regular times due to workforce resistance.
A “New Normal” in the American Economy
Beginning in 2020, many companies successfully transitioned any business activity that could shift online. McKinsey & Company research found that between 20 and 25% of the workforces in advanced economies could work remotely without losing effectiveness. Many businesses — especially in the manufacturing, medicine, and educational fields — responded to the disruption by accelerating deployment of digital and automation technologies. Employees transitioned to working from home via remote collaboration and communication tools.
The economic shock and forced change of the pandemic negatively impacted some sectors much more than others. For example, while film studios pivoted to direct-to-consumer distribution via streaming services, airlines and cruise ships could not fundamentally alter their models.
PWC’s Global Crisis Survey of the worldwide business pandemic response revealed that 70% of respondents said the pandemic negatively impacted their businesses, and just 20% experienced a positive impact. Additional findings of this survey include the following:
- Of business leaders surveyed, 95% say their crisis management capabilities need improvement
- Only 62% used a crisis plan in their pandemic response
- More than 30% did not have a designated core crisis response team in place, and only 35% had a crisis response plan that was ‘very relevant’ to the pandemic.
- Since the pandemic, 84% of leaders have discussed the value of organizational resilience
According to PWC, the hardest-hit sectors during the pandemic were hospitality and leisure, higher education, industrial manufacturing and automotive, and government and public services. Businesses suffered the most wherever employers could only work in one place of business, and wherever employers or consumers had to congregate.
The Reshaping of the Economy Is Just Beginning
How has COVID-19 reshaped the professional world as we know it? According to a recent IBM report, the pandemic changed management for 60% of surveyed organizations. In addition, it has accelerated digital transformation for 59% of respondents’ organizations, with 64% citing a shift to more cloud-based activities. The report suggests business leaders’ motivation to become faster and more flexible in business operations has become existential under the pressures of “unrelenting disruption, rapidly evolving customer expectations, and an unprecedented pace of change.”
Some accelerated technological investments companies made during the pandemic could very well increase productivity going forward, according to McKinsey. For example, investments in remote work, digital transformation, automation, and AI could produce significant increases in annual productivity growth. The market could see an increase in AI chatbots and warehouse picking machines, as well as online robotic process automation (which has helped financial service firms process small business loan applications and assisted airlines in issuing travel refunds).
Many businesses expect to continue with permanent work-from-home or hybrid forms of work and meetings. Those that can offer employees the options they prefer will have a leg up on attracting and retaining top talent. They will also have the luxury of investing less in facility space. Instead, they will have more money to invest in enduring innovations that increase efficiency, productivity, business adaptability, or consumer convenience.
McKinsey found that 20% of business travel may never recover as virtual meetings replace in-person visits, but it does expect a full rebound for leisure travel. Entertainment in venues such as concerts and movie theaters should also return to normal levels, while e-grocery and virtual healthcare will likely continue at high levels. The greatest projected growth between 2019 and 2024 could occur in the healthcare, construction, information and communications technology, retail and pharmaceutical sectors.
From a business perspective, innovations resulting in cost reductions, greater efficiency, and better productivity are here to stay. From a consumer perspective, innovations resulting in greater convenience and lower costs are here to stay.
What Does This Mean for Working Professionals?
McKinsey reports that future job growth will concentrate on high-earning occupations due to COVID-19’s influence on already strong trends. Demand may decline in service and sales industries and administrative office support roles where technology can replace workers. In fact, McKinsey estimates that more than 100 million workers will need to change occupations by 2030.
This data indicates a need for education in technology and innovation. Graduates from programs that position professionals for long-term, economic viability will be increasingly in demand.
Learn more about Barry University’s online Bachelor of Science in Administration program.