MEDIA: CBC News Network Weekend Business Panel (May, 2022)
As flood waters continue to rise in my area, pleased to join the CBC News Network Weekend Business Panel, alongside Mark Warner and John Northcott, talking rising interest and inflation rates, falling stock markets, implications of the latest jobs report, the end of COVID19 support programs, and consumer shopping habits. A lot to discuss, watch our segment here.
The intersection of all of these areas, something that tends to not be particularly well understood, is the impact on the “front lines” of business. It is relatively easy to step back and look at the economy through a broad lens, such as GDP, employment levels, or even the stock market; however, what businesses face directly, especially in difficult times, is much different. A few things to keep in mind as we consider this issue:
- Unemployment doesn’t tell the whole story. Just because unemployment levels are low, it does not mean that businesses have the staff members that they need. In fact, many companies are having a difficult time finding (and keeping) staff in a wide range of areas, including accounting, technology, sales, and healthcare, as well as front line workers; this includes both staff numbers and key skills. Ask a business leader how hiring has been going in what is a very tight labour market (they will likely have a lot to say).
- The “stars” can write their own ticket. Related to this point, it is the best staff members, in terms of performance and skillset, who have the most choices in this type of market when it comes to employment opportunities. Companies should re-think their compensation strategy and flexibility in terms of work arrangements, in order to be competitive. The “we just want people in the office” mindset, when not essential, is a losing proposition and some companies have likely found this out too late.
- Supply chain problems persist. This crisis has impacted companies more than is generally realized, and this reality can only be fully appreciated at the front line level. In short, companies need supplies and inputs to manufacture products and deliver services. In the absence of this, their ability to do so stalls, resulting in either delays or inability to fulfill customer needs and generate revenue. Remember that revenue eventually becomes cash, and it is easy to understand where a business is left when its sources of cash are impacted or lost.
- COVID19 support programs concluded. As these programs effectively end this weekend, a lot of companies may find themselves unable to operate on a sustainable basis. This can vary, as some industries have been impacted more than others (think tourism, events, and some services). Expect to see the impact of this in the coming months.
The bottom line is this: building a company to the point where it can successfully operate over time and employ staff is not something that happens overnight. Numerous companies have either quietly closed up shop over the past couple of years (think about the vacant retail and commercial spaces in your community) or are on the brink of doing so. Many of these are small businesses, however, some are larger, impacting a lot of jobs and families.
Once a business is gone, it’s gone. How long does it take to replace this loss with another company? Years, decades, sometimes longer. It is the patchwork of these companies that make up Canada’s economy and there is a need to better understand business issues at the frontline level, instead of taking primarily a broader approach. This is especially true in challenging times, which are reasonably expected to continue for at least the next year and likely longer.
And finally, on a personal note, my contribution to this week’s Business Panel came directly from a flood zone, surrounded by water, but safe (there should not be any water in this field). Not sure how long this “island life” will continue, but it is a reminder that we are living in unusual times. Thank you for watching!
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