When we look back at this time in our lives, it will be a significant milestone of change across the world. For each New Zealander, it might be the fork in the road where you decided to spend more time with your family. Or when your business pivoted in a new direction. It could be the point at which you lost your job and had to retrain in a new industry. Hopefully it won’t be the time you faced financial disaster, but unfortunately that will be the reality for some Kiwi households.
Accelerating existing trends – and wreaking havoc
Some current changes are already accelerating: online shopping is booming, for instance. The lockdown has removed people’s choices, and first-time online shoppers have realised that the fears they had about putting their credit card details online were unfounded. The products they ordered turned up, as promised. Many will be converted. Traditional bricks-and-mortar retail will now be more about creating an experience – otherwise why bother going shopping when we can get everything online?
Other industries aren’t seeing existing trends speeding up, but instead their activity levels have been severely dented in ways they couldn’t possibly have anticipated. Our tertiary education sector relies heavily on income from international students, a market segment which has evaporated. Those students also occupy a large number of inner-city apartments in our major cities; this is one reason we’ll see apartment prices fall much faster than values for standalone suburban homes. The CBDs themselves may be less densely-populated – will people want to avoid the city centres? Will working from home become far more common and lead to a lower density of workers in the CBDs? If that happens, commercial property prices and yields may be permanently affected. For residential property, we may see the reverse: working from home may mean we are prepared to pay more for an extra room. Many of the unanticipated outcomes of this crisis will be negative, but hopefully there will be some surprising upsides too.
Where we have made gains, let’s not lose them
This is an opportunity for New Zealand to be more productive; I’ve already seen some impressive pivots. One of my clients supplies food to the hospitality sector and their business has been decimated over the past few months – but they’ve pivoted hard into a meal kit delivery service that was doing only modest traffic prior to coronavirus. That’s taken off and helped keep staff employed over this time.
The lockdown has been bad for almost all Kiwi business owners, but many will be looking at this as a chance to review their operations and make positive changes. Under normal circumstances, people resist change, but with the world in upheaval we can take big strides and people are more likely to embrace – or maybe just accept – the changes. Hopefully during the down-time business owners have been planning, evaluating and strategising while putting measures in place to be more cost-effective and efficient. Let’s not lose these gains, because they could be the foundation of a more productive economy.
Redeploying our skilled workers
A period of enforced time at home has afforded employees some more time to reflect. For those people who have now lost their jobs, it’s going to be tough. In certain industries it may be a long time before jobs reappear – too long for people to wait it out. Those in the tourism, retail, hospitality and the media sectors may have to find new directions.
So far the Government has earmarked $100 million for redeployment, but I believe it should be more. One of the most brilliant factors of the modern global economy is the way that technology can match up demand with supply. That’s what Uber and Airbnb do so well. Now we need to harness that power to match newly unemployed New Zealanders with gaps in the labour market.
The Ministry of Social Development recently announced the launch of a website that connects jobseekers to employers – honestly, the mind-blowing part about that announcement was that the site didn’t exist in the first place. It also provides some training, but it’s mainly designed to improve basic employability: interviewing well, writing your CV, what to wear. Newly unemployed workers are going to need training in hard skills tailored to specific industries where there is a need for them. Once again, technology can deliver training at home, and on demand, so we need to make the most of it.
Pilots, for instance, have skills – like leadership, decision-making and technical aptitude – that other industries were seeking before the lockdown. Can they be redeployed into a fast-growing sector like logistics or IT? Crown infrastructure projects will also need a steady supply of people – can we upskill people to fit into some of these roles? Could the Government partner up with tertiary training institutes for some quick wins? There’s a lot of work to do on this, but the potential is there for this to be a powerful and permanent way to match jobseekers with industries in the future.
The smart money is already looking ahead
We’ve taken a body blow. But it’s not fatal. We’re on the road to recovery; optimists and opportunists are already hunting out the silver linings. One of my clients, whose business has been savaged by the lockdown, delivers service food to the Pacific Islands. After news that we might have a travel bubble with Australia and potentially the Pacific Islands, he was approached by a buyer for his business. Was that buyer just trying to get a cheeky deal? Maybe, but clearly the buyer believes in the future potential of the operation. It certainly gave my client a little extra confidence after all that’s happened.
This crisis has been bad and some of its outcomes are undoubtedly dire. But it’s also a pivot point, personally and in our economy, to allow us to move to better ways of working, deploying people and using technology. Let’s try to keep the positive differences, improve our productivity and be as adaptable and creative as we know New Zealand can be.