According to the United Nations labour body ILO, a total of 195 million jobs are threatened by COVID-19. This also means a large income loss for workers in a range of USD 860 billion and USD 3.4 trillion by the end of 2020. This, along with the 1.6 billion people affected in the informal sector, makes the coronavirus pandemic, the biggest hurdle known for the recruitment industry.
Even though the virus is supposed to wipe out 10% of annual revenues across sectors, not every segment is affected equally. Industries like aviation and tourism seem to be the most ill-impacted ones, whereas others like online education, have thrived in the recent conditions.
Here is a list of industries that have taken the biggest hit during the COVID pandemic, and how they can bounce back from the current situation:
Aviation
Perhaps the hardest hit sector by the global pandemic is aviation. In a cash-intensive and low-profit margin business like airlines, the mass grounding of air traffic, border closures, and shelter-in-place policies across the globe along with uncertain reopening times mean that major airlines are looking to shorten their workforce significantly. Other factors like the increased usage of video conferencing mean that business travel can take a hit even in the long run.
In India, COVID-19 is going to potentially impact 2.9 lakh jobs in the aviation sector and it’s ancillary industries. The revenue impacted by Indian markets would be over $11.2 billion .
With such huge implications, the aviation industry needs some support from external agencies. Here are a few ways the sector can get back on track:
- Government bailouts: In such disastrous times, the industry would require the government to step in. The $58bn bailout from the US government and the $9.8 billion agreement between Lufthansa and the German government, are the kind of deals the industry can see more of soon.
- Enhanced preparedness: The Airport Council International (ACI) has created Airport Preparedness Guidelines to document elements like communication, inbound and outbound screening, emergency response, and coordination with all relevant authorities. Airports would need to follow these guidelines to cope up with the present situation.
- Social distancing: The DGCA has already advised all airlines and airport operators to strictly follow the procedures to handle the passengers, including installing sanitizer machines and providing thermal scans at various touchpoints.
- Digitization: The industry needs to focus on using minimum paper. Expect e-tickets, e-visa, and e-passports to become a norm.
- WFH: With the aviation industry functioning 24*7, WFH to most employees can be the correct call in the present scenario. WFH to all employees apart from flight operations and aircraft maintenance can be the way forward.
Food & Hospitality
The overall effect on the hospitality industry is expected to be in the range of ₹620 crores. The hotel chain and standalone hotel segment is staring at losses over ₹130-155 crore, whereas the alternate accommodation segment is likely to make losses of over ₹420-470 crore.
All of this will result in the layoffs of contracted or ‘casual staff’. Swiggy recently cut down it’s employee size by 1100, whereas Zomato did the same with 540 employees. With both the hotel industry and the food delivery sector looking to cut down their size, here are the few ways in which the segment can make a comeback:
- Focus on meal delivery: First things first, the restaurant sector should focus on the one business model still allowed to function. Even though the food delivery segment is also taking a hit currently, as the situation improves, consumers will still accept home deliveries way before they start eating out.
- Cloud technologies: Even a people-centric industry like hospitality sees an increase in remote working. Cloud-based property management systems can control operations from anywhere in the world.
Change existing procedures: Restaurants need to modify some of the existing processes into a more futuristic one, for eg:
- Self-service
- Contactless payments
- No-contact home deliveries
- Complimentary hand-sanitizers
- Suspension of unnecessary gatherings at the physical location
- Orders via mobile apps
Attract millennials:
Studies show that millennials are the most eager group to venture out once the pandemic ends. With their high disposable income and tech-savviness, they become the ideal target group for the hospitality industry.
Renovate:
Hotels can use this time to renovate their old infrastructure and make them safe and ready for the world after coronavirus. Safety procedures and equipment required should be purchased right now.
Oil and Gas Industry
You know an industry is in trouble when it starts selling it’s products on negative returns. The recent fall of the oil prices to $0 a barrel and below was the indication of how significantly the pandemic has hit the oil and gas sector.
The Oil industry cut 51,000 jobs globally in March alone. According to an estimate by BW Research, oil and gas companies are expected to let go of around 30 percent of its employees in the first quarter of 2020. Weatherford International, a Houston-based oil-field service company, has already said that it plans to cut 25 percent of its global workforce.
The primary reason behind this freefall is the lack of fuel demand across the world, followed by a glut in global oil markets leading to an acute dearth of available storage capacities. Thus, increasing the number of market participants who are unwilling to risk doing physical deliveries anymore.
With such diverse and deep-rooted issues, here are a few ways in which the Oil and Gas sector can recover:
- Long-term thinking: Management may think of medium-to-long-term strategies to thrive in the new post-pandemic world. This would require building intrinsic organizational capabilities.
- Develop agile operations: Most O&G companies have detailed operating processes for safety incidents, however, they don’t have similar plans for business contingencies. Companies that design flexible, team-based processes for planning and execution are more likely to emerge winners.
- Alternate Scenario Planning: The O&G sector is one of the early adopters of scenario planning. However, most companies need to invest more resources and time to follow up and get differential advantage on alternate scenarios.
- Partner ecosystems: Indian O&G companies have always been good at working with suppliers/vendors through long-term relationships. However, they can still learn from other industries that use a mix of financial investments and other forms of partnerships to create value. Such alliances enable companies to get into positions early when fighting a crisis.
Retail
The retail industry is looking at a consumer demand drop of around 50% in the ongoing lockdown period. In India alone, the retail sector expects about 80,000 job cuts.
Organized retail is heavily impacted by the closure of malls and large shopping complexes. On the other hand, even though the impact of the lockdown is minimal on essential goods, demand for discretionary items has taken a big hit and is likely to continue this way till the time the economy recovers. Even online retailers are facing the heat with disposable incomes drying up.
With such a broad plethora of losses, here is how the retail industry can revive:
- Watching over touching: Studies have found the COVID-19 virus can last up to three days on plastic and stainless steel, and up to 24 hours on cardboard. With such information, shoppers will be reluctant to touch products even when they return. Retailers need to arrange for contactless display and payment systems to make headways.
- Focus on local flavor: The pandemic has marked a return of interest towards local shops. People don’t want their favorite small coffee shop or bookshop to go out of business. Large franchises will do well to partner with local brands or add some local flavor to their stores.
- Omnichannel presence: COVID has accelerated the already growing trend of omnichannel presence amongst retailers. Most retailers might want to show their inventories online, provide deliveries, or pick and drop their services.
- A conscious customer base: The pandemic has made consumers wary of the effect their purchases have on nature. Brands that showcase sustainable and nature-friendly ways of manufacturing their products will have the edge now.
Automobiles
Plagued with a myriad of challenges, the automobile industry was already facing a slowdown before the coronavirus.
The pandemic has been an added curse that has affected over 1.1 million jobs in the EU alone. In India, a 45-day factory shutdown will result in a revenue loss of over $13 billion. The Indian market is likely to witness a decline of 25-30% for the 2020 calendar year.
For an industry already in deep trouble, the way back is going to be long and hard:
- Hope of recovery: The return of manufacturing activity to near normalcy in China and South Korea, along with extended lockdown in India, gives hope for a U-shaped economic recovery.
- Change in customer preference: Post the pandemic, we expect consumers to switch more towards personal mobility. This is expected to drive up purchases of new vehicles.
- Online Sales Channels: Companies like BMW have already started providing customers with no-touch online experiences with cars being delivered to home. Expect other manufacturers to follow the cue.
- Plans for dealers and suppliers: OEMs might need to help some of the financially weak dealers and suppliers through liquidity planning, operations restart, and cost reduction ideas.
- Future planning: From a long-term perspective, manufacturers need to focus on cutting edge technology like automation, AI, blockchain, e-commerce, mobility platforms, EVs and advanced safety systems depending on global events and customer preferences.
The coronavirus pandemic has undoubtedly disrupted the different sectors as well as their recruitment function. However, companies who plan futuristically and apply cutting edge technologies like automation and AI in both their operations and recruitment will have the advantage in this race to bounce back.