Although the end is in sight, the pandemic is not over yet. There are side-effects in the economy, in society and in workplaces. The tail end of this crisis will be felt for some time.
- It is likely that clients on boom or bust trajectories will only accelerate further on their trajectory. Those who have been prospering will grow rapidly and profit further, demanding more of their agencies rapidly. Those who have been struggling already will hit harder problems as the pandemic aftershocks continue and the economic support is removed, placing their projects with agencies at risk. Agencies should be mindful of credit risks with clients.
- There is a realistic possibility of partners and suppliers in financial risk as support programmes are wound down, which could be amplified if there are further waves of the pandemic without new support. Agencies should monitor the risks in their supply chains for signs of fulfilment disruptions, inability to meet commitments, cashflow issues, or insolvency.
- There is likely to be a wave of redundancies as the furlough schemes in many countries end. These will be mostly people in sectors that have been badly affected already. The economic impacts of the pandemic are K-shaped — those in economic decline will continue to slide down, while those doing well are thriving.
- Costs are likely to rise due to inflation. Suppliers will seek price increases. Staff will seek pay rises, especially if salaries have been frozen for the last 18 months.
As the pandemic and its aftershocks tail off, there will be a renewal. This will be a time when everything is up in the air about how normal life and work will look. It’s a chance to reinvent, and redesign, with real opportunities available. But the flipside of that is a time of uncertainty and risk for those who can’t adapt.
The Anxiety Epidemic
The effects of the pandemic and the political disruption over the last few years have amplified shifts in society that were already happening. Many people are in precarious positions. Others are highly affected through their care about what is happening to the disadvantaged. Stress, anger and anxiety levels are high.
The Age of Unrest
After a relatively peaceful period, the world has seen a growth in political and societal tensions. These are being exploited by some seeking to gain or retain power, and are leading to increased divisions and instability. It’s going to be increasingly difficult for businesses to plan and operate.
The effects of political change, societal change and the pandemic are leading to a difficult market for knowledge-worker talent. It will be harder to attract, manage and retain good people.
While the climate crisis feels like a distant threat compared to the pandemic, it requires action now. Agencies will suddenly find increased pressure from all sides to lead the way.