The Covid-19 pandemic was a catalyst for huge change in the way we all live and work. Many companies had to quickly pivot to a work from home model. This resulted in an acceleration of technology adoption / digital transformation by 5-10 years.
Before 2020, the US was experiencing a 40-year decline in entrepreneurship. The pandemic has resulted in a huge entrepreneurial boom. From 2019 to 2020 the number of new businesses created grew by 24%.
In 2021 the new business applications ballooned to over 5.4 million.
Potential reasons for this surge include:
– 4.3 million laid off workers received stimulus payments.
– A bull market combined with low interest rates.
Looking back at 2022, more than 5 million new business applications were filed according to the US Census Bureau. This is about 14,000 new businesses a day.
However, the economic environment is shifting. A looming potential recession and rising inflation may result in a turbulent 2023 for new companies. Even in good economic times, about 50% of new businesses fail.
Additionally, there is once again a shift taking place in the workplace post-pandemic. The last couple of years have been favorable for employees who began leaving jobs in a wave known as “the great resignation”.
However, the bargaining power has shifted back to employers as many businesses are tightening up.
A survey from Resume Builder concludes that 90% of companies are expected to require a return to the office this year. This is a strong change from the hybrid policies that became popular during the pandemic.
As businesses / leaders prepare to enter a cycle of adversity, here are some tips:
– In times of great uncertainty, it is very important for CEOs and leadership teams to be present, in person, in front of employees.
– Layoffs / financial austerity and restructuring are part of the tools many companies will use. Connect with your most valuable and strongest employees; they are the most “recruitable” and need the reassurance they are part of the go forward team.
– In these difficult times, employees look for positive points of reassurance. Recognize your employees who are high performing in these difficult times.
As a board member, I recommend everyone take the time to learn from the wisdom of their friends and colleagues.
Many people in your life have likely experienced several recessionary cycles and have a lot of pattern recognition and scar tissue they can share.