At Robert Half and Protiviti we believe there is tremendous value to be gained in collaborating and learning from each other at this challenging time. Hearing new and unexpected perspectives from others can help challenge your thinking, provide confidence in your own plans and increase your resilience.
More than 170 business leaders joined our eighth Enterprise & Market Resilience During COVID-19 virtual roundtable at 8.00 am on Thursday 7 May. Held under Chatham House rules, the facilitated, secure sessions enable participants to ask questions in advance or live during the discussion.
The aim is to have an hour-long meeting each week on Thursdays and build a community of people from different industries who can share relevant materials and experiences of operating in ‘the new normal’.
- Organisations are considering how to learn lessons from the current crisis to prepare for an uncertain future
- Innovation and technology as well as different working patterns will bring transformational change to sectors across the board
- Impacts from the crisis will last for longer than the lockdown period as consumer and business confidence rebuilds
Preparing for the future
This week’s session focused on two industry sectors impacted most severely by COVID-19, airlines and restaurants/food supply. Before the speakers gave their perspectives, the UK leader of Robert Half reported that there are encouraging signs of growth in recruitment, particularly in sectors such as manufacturing, packaging, logistics, biotech, pharmaceutical and online retail.
Recruitment plans that had been put on hold have now been brought back online, and growth in industry activity has increased by as much as 28%, according to commentators. Demand is particularly strong for C-suite appointees and interim specialists in technology and finance & accounting.
Reimagining the airline business
The first speaker, head of audit and risk at a major airline, said that the air transport and engineering industry has been decimated by the pandemic. While engineering teams are being kept busy with ongoing maintenance work on the airline’s grounded fleet of aircraft, passengers are no longer flying unless they are being repatriated.
This has led the airline to change the use of plans to transport international cargoes of perishable goods such as food and medical suppliers, which means removing seats to accommodate pallets of food as well as transporting them in the hold.
The airline is anticipating consumer demand for leisure flights to return before business travel, particularly as corporate organisations consider how best to spend disposable income in the years ahead. Looking forward it will be important to think about how airports as well as aircraft will operate in terms of social distancing, and there will be a greater use of technologies to enable processes such as touchless check-ins, for example.
The second speaker, head of audit and risk at a metasearch engine and travel agency, agreed that it was difficult to predict when the airline business would be fully operational again. If an effective vaccine is produced successfully that would shorten recovery time, but it is likely to take three to five years to return to normality.
In any case, air travel will change significantly and will recover in different regions within varying timeframes. Barriers to entry to the market will fall as airlines start to look at asset disposals, meaning new and different (cash rich) players could move into the sector to expedite ecommerce and delivery schedules.
Consumer confidence will be an important factor, as will calculating how much business and leisure travellers will be willing to pay for extra security and social distancing measures. Finally, collaboration and IP sharing efforts that have already emerged in the industry will continue into the future with businesses supporting each other through the crisis.
Changing tack in food
The CEO of a prominent restaurant group explained that the hospitality business will also need to change, in line with health and safety concerns. Staff and guests alike will be worried about when it’s safe to head back to work and eat in busy restaurants, and social distancing measures will be needed in kitchens and out on the floor.
His business is considering how to bring other services into larger restaurants to add to the dining out experience, such as hair and beauty; re-opening restaurants that can offer outside dining; or using technologies like robots to reduce personal interactions.
Investment in new arrangements will be balanced by reducing non-essential central costs: the lockdown provides a useful opportunity to analyse the P&L line by line to see what the essential items for running a restaurant chain actually are.
Such measures will mitigate against the impact of a likely 30% reduction in custom, but without further government help, the restaurant business is likely to be hit particularly hard especially in Q1 2021 when we are likely to see an economic slump. While the restaurant business has shown resilience in the past, as many as 50% of companies could fail as a result of COVID-19.
The challenge for food processors has not been a reduction in demand, but a shift from food outlets to supermarkets, said the group CFO of a leading food supplier. The UK population has largely shifted to eating three meals a day at home and returning to 1970s/1980s patterns of a weekly shop at one supermarket rather than more frequent visits to a variety of stores. Customer orders have changed accordingly, which has meant adapting quickly to the new environment. This will continue as quick service restaurants start to reopen in the coming weeks.
Being ready for an uncertain future is a key concern for Protiviti customers across the board, concluded one its MDs. There is a great deal of discussion about how to return, adapt and innovate, both in terms or new ways of working and creating pandemic resistant organisations for the future. In particular, firms are considering how to manage unpredictable surges in customer demand as the lockdown is slowly rolled back.
- Paul Middleton, Managing Director, Protiviti
- Leyla Tindall, Robert Half
- Peter Richardson, Protiviti UK Office Lead
Our next virtual roundtable will take place between 8:00-9:00 AM BST on Thursday May 14.
We look forward to meeting you. Contact us for joining details and to put forward your questions.