It’s official. The United States is in a recession, ending the longest period of economic expansion in history. And while the EU hasn’t officially come out and said it, Germany and France have proposed a $545 billion recovery plan to counter an impending “recession of historic proportions.” We’re facing unprecedented uncertainty on a global stage, but for savvy business leaders this could end up being the perfect time to transform your organization and draw from one of the most talented applicant pools ever.
Let’s be clear. Things are hard right now. The most recent data shows unemployment in the EU climbed up more than 397,000 since March. For European startups and tech companies, COVID-19 has triggered massive bail-outs across the continent. Despite the aid, startups are closing and US-based companies are winding down their European operations and leaving their employees behind.
The pandemic is a different beast entirely, and we should listen to public health officials on when to go back to business as usual. But on the question of what business leaders should focus on to withstand the recession, there are parallels we can draw from the 2008 financial crisis.
In 2008, I saw companies shedding employees just to stay afloat and a labor market oversaturated with skilled employees. But those that withstood the recession – and the new companies that emerged out of the recession – shared a few commonalities: They took advantage of the incredible labor market, they were ahead of the curve on technology adoption, and they turned to outside specialists to manage core functions of the business.
Businesses — and the technology that powers them — have changed in the years since 2008 and new trends from cloud computing to remote work can make it easier for both employees and employers to weather this storm.
The Rise of Flexible Labor
One of the first things we learned from 2008 was that businesses needed to prepare early on for a recovery that’s sure to come. Businesses that had downsized dramatically were unable to pivot quickly to meet new demands and suffered as a result. It was during this time we saw an increased focus on outsourced or “gig” labor, especially for technology services, because it offered a way for businesses to maintain services at a dramatically lower cost.
We’re seeing that play out again now — businesses are reducing headcount and turning to third-party providers to help maintain operations. Remote IT services, in particular, have become more vital to business continuity than ever. In fact, CIOs and business leaders have already started cutting their budgets and shifting towards remotely maintaining their most critical IT needs.
The Evolution of Technology and Culture
In 2008, cloud computing was a nascent technology that hadn’t yet seen widespread adoption. Fast forward to today and you’re hard-pressed to find a single company not utilizing the cloud in some capacity. This massive sea change in technology has made software and service delivery remarkably easy and effective from just about anywhere.
This trend tracks well with “digital transformation” initiatives taken by some of the largest enterprises. While those efforts may be on hold for now, the companies that were ahead of the curve early on are finding themselves best positioned to withstand the pandemic and emerge stronger on the other side.
In addition, the ease of working in digital spaces is transforming where people are working. A decade ago, remote work was still a novelty, but as technology has democratized information it has also opened new opportunities for workers by making remote work more easily manageable. Today, cloud-native, fully-remote startups are common, and some of the largest technology companies are shifting large parts of their workforce towards becoming fully remote.
Hiring in a Pandemic
As I’ve noted, COVID-19 and the resulting recession have caused many businesses in Europe to fold or retreat. The economic fallout has been particularly hard for the employees left behind. But this tragedy represents a major opportunity for business leaders and entrepreneurs of the world.
We have never seen such a talented applicant pool than right now, and for those with the resources to hire, or for those interested in starting their own venture, there is an opportunity to pick up highly skilled new employees. Today we’re seeing three times the number of applicants for open positions at NinjaRMM. Companies in the position to hire could end up being the next AirBnB or Slack thanks to the available talent.
Getting back to business as normal will be hard. But crises spur innovation and those with vision can find opportunities. After 2008, we saw investors taking more bets on seed-stage rounds and we may see that trend again as laid-off employees build new, better solutions that improves people’s lives.
Leave a lasting mark
The coronavirus and resulting economic recession will undoubtedly leave a lasting mark, and how nations respond is of utmost importance to keeping industries running in the long-term. But right now, it is up to business leaders to get creative so they can not just survive but thrive during this period.
As I learned in 2008, those that took steps early to invest in new technology, a flexible labor force, and the best new talent on the market increased their resiliency and were left in a stronger position than where they started. In 2020, as the world faces another “once in a generation” recession, leaders would do well to remember these lessons from 2008.
Author: Andre Schindler is the General Manager of EMEA and VP of Strategic Partnerships for NinjaRMM where he leads NinjaRMM’s growth across the entire EMEA region. Prior to NinjaRMM, Andre held executive roles at TeamViewer as Head of Sales for North and South America and subsequently Director of Business Development and Partnerships, and he founded his own IT services business. Andre brings an extensive understanding of the IT industry and a uniquely international perspective on how global market trends impact the IT community, especially the European market. Andre is based in Berlin.