Business leaders need to address questions on work processes, performance and virtual teams to improve productivity and engagement through the COVID-19 induced recession, says UNSW Business School.
The impact of COVID-19 border restrictions on Australian businesses is alarming. For example, Australia is losing $319 million a day in domestic and international air travel, with the total economic fallout from the shutdown of domestic flights over the past seven months totalling $17 billion and $61 billion for international flights, according to the Business Council of Australia.
The fallout also includes widespread job losses across the aviation sector, including airlines, airports, catering and ground handling and transport services. The nation’s two major carriers have laid off around 11,500 employees, as more than 34,000 people nationwide have been stood down or lost their job in this sector.
But it’s not just the aviation sector that is suffering; border restrictions are having a devastating impact on many industrial sectors in Australia, according to Gigi Foster, Professor in the School of Economics at UNSW Business School. “We can see that just in the decline in tourism and hospitality revenue… even in education (our industry), and arts and entertainment which often draw people from overseas,” Prof. Foster said.
Australia relies heavily on the contribution of migrants, both in the short and long term, and so from a business perspective, “the number one thing that I think the government should do has nothing to do with the budget actually and has everything to do with that policy – we should open borders right now,” said Prof. Foster.
“If we don't speak up about these borders being a very, very important channel through which we get revenue and economic activity for our businesses here in Australia, who will? I think business leaders would do very well by their constituencies, their stakeholders, their shareholders and their employees to raise their voices against these bad political decisions," Prof. Foster explained.
But with COVID-19 disruptions and economic fallout likely to continue, Prof. Foster said there are three key issues business leaders should consider as they plan for recovery from the COVID-19 recession.
One of the biggest questions business leaders face right now is how to ensure work processes remain productive and how to keep things running efficiently and smoothly during this disruptive time, said Prof. Foster.
“In a lot of businesses, the key area of strategic vision that’s required is to understand what sort of work processes your employees need to undertake, and whether those can realistically be sustained in an online-only environment, or whether in fact, you have some work processes that really require face-to face-operations,” she explained.
For example, in the education sector and other industries, experimentation with online meeting technologies such as Zoom, Microsoft Teams and Skype, has opened people’s eyes to the kind of fast innovation in the workplace that is possible – a trend which Prof. Foster said is likely to stay.
“If you’re a business leader and you’ve got a lot of meetings, committee meetings, decision-making meetings, strategy meetings and board meetings that can realistically be done quite productively and efficiently online, then there’s no problem sticking with that,” she said.
“On the other hand, other kinds of work processes, such as co-creation processes in cartooning or drafting or other sorts of creative activities, I think are very difficult to do online effectively,” she continued. So, for those kinds of activities, business leaders and managers may need to find ways of bringing people together again.
“It’s simply not going to be sustainable to run those sorts of activities going to the future, and be competitive with other industries and other countries that are going to be setting best-in-class examples for us to compete with, unless we can bring people back together in one place in a room somewhere, whether it’s [in the] CBD or someplace else,” she added.
The economic challenges experienced thus far will continue to be felt for months and years to come, as industries continue to feel the brunt of the COVID-19 economic fallout. But instead of trying to pin down predictions of revenue of profit, business leaders should be looking at the bigger picture.
“There are certainly some lessons we’re learning right now about the importance of expectations in driving decisions by businesses and by individuals. And those expectations are very difficult to set in an environment of uncertainty,” explained Prof. Foster.
“It’s not that the specific metrics have changed, but really more the method of trying to get a grip on how to form your expectation… to encompass all these different areas of uncertainty, which pre-COVID were really not so uncertain,” she added.
In the relatively stable pre-COVID-19 environment, businesses could look at narrow metrics and be more precise about their predictions, Prof. Foster said. “You just can’t be precise when you have so much uncertainty [post-COVID-19]. And this is one of the reasons why I feel that the government has a responsibility to provide that sort of certainty as soon as possible for our businesses to get back on their feet,” she said.
It is also essential to consider those who are impacted the most by the COVID-19 induced recession – namely, those who are already disadvantaged relative to others, such as younger workers and those in particular industries. In May this year alone, the Australian Bureau of Statistics found 103,000 young workers lost their jobs – 45 per cent of the total jobs lost for the month.
Prof. Foster’s research has found the unemployment rate for young men climbed 3 percentage points while the rate for young women rose almost 5 percentage points between February and May, with drops in the participation rate for each group of roughly 8 and 9 percentage points, respectively.
While the unemployment rates of young people rose less than those of the Australian labour force overall, participation rates for younger workers plunged – suggesting that young workers responded disproportionately to COVID-19-related disruptions to employment security and opportunities by withdrawing from the labour force.
While the effects of these disruptions have already had an acute negative impact on young workers’ participation rates, remote working in the long term could also discourage young people from progressing their careers. By not being in an office, young people may find it challenging to establish a strong professional network to turn to for support and guidance.
“You need to tap into those networks and need to tap into their knowledge, and it’s much harder for a junior worker to knock on somebody’s door, virtually, when that person is extremely busy. I worry about the longer-run sustainability of that in relation to succession planning for roles to be filled by younger people gradually over the years,” Prof. Foster said.
Young employees can also bring fresh perspective and a different way of thinking to business. So, business leaders must do all they can to support younger workers, to ensure a sustainable and productive future workforce.
“They should consider ways to support the optimum and effective transition of essential roles within their companies to junior workers over time… mentorships, on-the-job training, apprenticeships, and other kinds of face-to-face opportunities… linking experienced, established workers to those who are less experienced, less established – but have just as much potential,” concluded Prof. Foster.
Professor Gigi Foster is Director of Education for the School of Economics at UNSW Business School. For more information on how business leaders can navigate the future of work, read Five ways CEOs can help their business thrive post-COVID-19 and How big tech companies are adapting their workforces for the future.