If we were to surmise the economy in 2020, it would look as such: an unprecedented pandemic has shut down the economy almost entirely, causing it to collapse without modern precedent. The economy has then had a slow recovery with the relaxing of circuit breaker measures and businesses were permitted to resume operations.
This straightforward narrative, whilst accurate, does not cover the looming disaster that is about to come next. We’ve entered a longer and slower grind that has effectively put the economy at risk: a recession. Sectors that in theory shouldn’t have been affected by the pandemic are showing signs akin to a severe recession.
To cut back on costs, businesses have made the hard decision to layoff their employees. In the last few weeks alone, Disney had decided to relief 28,000 employees from their positions and the oil giant Shell, 9,000. Companies are also looking at relocating and opting for more affordable business office rental to reduce expenses. Bear in mind that these are just corporate giants, smaller businesses and companies are at risk of shutting down entirely.
Job Losses In This Pandemic Recession Compared To Past Recessions’
Unlike the simple narrative of shutting down and reopening the economy, the pandemic job losses are much worse than that. The mechanical effect of shutdowns will translate to a loss of job even far into the future. Jobs that were lost during this period will cease to exist once the economy comes back in full swing. Many will need to find other types of work and such readjustment needs to take time – both structurally and individually. Of course, an economy doesn’t experience recession forever either, but a steady state is predicted to happen only in 2023.
Moreover, many don’t realise that an economy is an ecosystem where each industry posses a symbiotic relationship with another. When one takes an industry out of commission for months, the direct impact doesn’t merely stop at just the business and the employees. When one sector is hurting, another will also follow suit and spiral down. For instance, the aviation industry is one of the many industries that were affected due to the pandemic. This naturally translates to a decrease in revenue for hotels and restaurants and soon enough, it will affect other industries that depend on the hotel and restaurant industries for business.
The Rising Precedence Of Automation
As with most recessions, the pandemic has prompted many businesses to accelerate shifts that were already underway, to help salvage the situation at hand. One of those shifts is the rising importance of automation and online businesses. Whether it’s a consequence of quarantine or otherwise, many are going online to research and purchase or employ their desired goods or services respectively.
Where the demand goes, the supply follows. Several industries, if not all, are looking into automation and shifting their businesses online. This also means fewer workers are needed and the potential removal of physical stores – which is a cost-effective approach in this period.
Avoiding An Unsubstantial Jobless Recovery
The economy is always evolving and this just so happens to be one of them. Whilst the trigger behind a recession differs – The Great Recession was prompted by the collapse of a housing bubble, for instance – the initial economic pain still remains the same. It’ll debilitate a certain industry and it’ll cause a shockwave across other sectors; and the aftermath is always unemployment.
Of course, the first step to end this pandemic recession is to first ensure public health is assured. Only then can the governments create policies to ensure that several jobs are saved and new ones are created. It is crucial that we don’t go back to “jobless recoveries” that took years for the plan to be activated in earnest.
One of the most straightforward approaches to surviving a recession or any economic downturn for that matter, is to prioritise the cutting of cost. At Greenhub Singapore, we aim to be your business ally and help you improve your bottom line even during such a challenging time. Our virtual offices will allow you to continue with your operations without committing to a physical office for rent. These virtual offices will give you access to several meeting rooms, a distinguished business address and more. Take the first step for surviving a pandemic recession with Greenhub Singapore.