What is your business outlook for the rest of 2021 (and beyond?) Survey data from the Conference Board shows that 58 percent of US CEOs regard COVID-19 as the primary disruptor of their 2021 business environment. However, 45 percent also see vaccine availability as having a major impact in the coming year.
With wide availability of vaccines and life increasingly returning to pre-pandemic normal, there is much less uncertainty facing businesses — supply chains are more stable, customers are returning, and the threat of business shutdowns is waning.
What will a successful recovery require? Business owners learned valuable lessons during the pandemic, many of which they will continue to embrace during recovery. For example, CEOs say their organizations will focus on adaptability, flexibility, clear communication, and the need for “quick, decisive action while maintaining calmness under fire.”
Some recognized that their disaster plans were inadequate and will take steps to address deficits. Others were inspired to drive change at a time when everything was already in upheaval. Their “Why not?” attitude carried them during the toughest times and sparked innovation. Still others recognized that “empathy and doing the right thing” go a long way during crises. External collaboration—with customers, suppliers, and advisors—was also mentioned in the survey as an important lesson.
Interestingly, US executives show slightly greater interest in bringing employees back to the physical workplace than do their global peers. However, many companies have found a comfort level with a remote workforce, and few responding CEOs plan to make significant changes to the current number of remote workers in the coming year.
The Conference Board estimates that before the pandemic, roughly 5 to 7 percent of full-time US workers with office jobs worked primarily from home. Post-pandemic, that number will likely rise to 20 to 40 percent.
The fact that work has been uncoupled from location, at least in many cases, also opens the door to a different talent management and compensation model. For example, some CEOs expect that they can pay less for talented employees living in less expensive regions. Others believe that providing equal pay to team members with the same responsibilities, regardless of where they live, promotes equal contribution to the project. Either way, there are new questions to ask and different employment patterns to consider.
For 2021, CEOs say they’ll be focusing on “prudent financial management and cultural changes to drive growth and improve performance,” and “finding the right balance between conserving cash and investing in the innovations and programs needed to succeed in a new commercial landscape.”
One tactic that many executives agreed upon is the idea of accelerating digital transformation, defined as the use of technologies and data for the purpose of developing new products, services, markets, and business models.
Indeed, surveyed CEOs say that digital transformation is their top strategic priority for 2021. These executives recognize that digital transformation may also require changes in organizational structure, corporate culture, and talent development. In other words, this is a big-picture endeavor with many moving parts. It will take enormous effort to affect this change, but executives acknowledge that it is the way to create a sustainable competitive advantage.
Lessons for the Future
The pandemic’s effects on business are not confined to the bottom line. For many, the workplace has changed forever, and the experience of the last two years will have long-lasting effects on workers and shareholders across industries. The attitude of executives in embracing this change and their willingness to capitalize on new opportunities will be instrumental in determining who comes out ahead in the post-pandemic world.
A trusted relationship with a forward-looking business partner can help your business make the most of the post-pandemic economic recovery. Contact Dembo Jones today and find out the benefits of having a tax preparer that goes above and beyond to become your trusted advisor.