International Institute of Business & Tax Excellence Newsletter (IIBTE.com)
Edition 5 (Certificate in Entrepreneurship Edition) - June 2020
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Welcome to the fifth edition of the IIBTE newsletter, welcome to edition 5!
The International Institute of Business & Tax Excellence is poised to harness globalization, one business at a time.
In this edition:
World Economies: Post-Covid-19
by Ridwaan Asmal of Coral International Asset Managers (Pty) Ltd
www.coralassetmanagers.comIs Kindness In The Workplace Necessary?
by Nazneen Adam of Coral International Asset Managers (Pty) Ltd
www.coralassetmanagers.com
Article 1:
World Economies: Post-Covid-19
The year 2020 will go down in the annuls of history as the “year of the virus”, for many a year to forget. Currently, we are in the midst of an historic event that will change many aspects of our world. There will be major impacts on the global economy, geopolitics and our societies due to the outbreak across the globe of the coronavirus (COVID-19) pandemic.
As countries emerge from the immediate health crisis and re-start their economies, ‘adjusted’ working practices, attitudes towards travelling, commuting and consumption will change employment prospects. We are already seeing record levels of unemployment due to lockdown measures in place to control the transmission of the virus. Probably, hardest hit from this pandemic is the SMME’s, travel and leisure and informal sectors of the economy.
Consumer behaviour
Consumer behaviours are already changing, even during the stabilisation phase that most economies are in right now. In March and April, global consumer spending decreased every week. Towards the latter part of April and early May, however, consumer spending recovered a little each week in anticipation of a move into a ‘normalisation’ phase - where economies began reducing lockdown measures in the hope of stimulating an economic recovery. At first, the expenditure was on basics, such as groceries, but now spending is gradually shifting towards more non-essential goods such as home improvements and clothing.
The road to recovery seems long and daunting, at least until there is an effective health crisis exit strategy that involves a combination of a widely available vaccine and therapeutic drugs. In the intervening period, there are likely to be continued cutbacks in the travel, hospitality, entertainment and leisure sectors of the economy.
Optimistic outlook
a. Growth ~ One business analyst predicts that global growth for 2021 will be 4%, as pent-up demand and new vaccines power up a recovery from the 2020 global GDP growth of just 1.2%. China will have a solid 6% year, up from a projected 2.8% in 2020, as it may benefit from its gamble on stockpiling oil reserves at cheap prices in March/April of this year. The United States of America will rebound from a no-growth 2020 to an estimated 3% growth in 2021, but with it will revive a pretty nasty counterweight inflation.
b. Global travel ~Those who predicted COVID-19 would usher in a new lifestyle built around teleconferencing, virtual entertainment will have forgotten a key lesson in that human nature doesn’t change all that much. People love to travel and convene. Easily bored, they want to get up and go, thus it is hoped that these sectors of the economy that are linked to travel and tourism will eventually recover.
c. Stimulus plan ~ Governments of the world will have to play a big part in trying to revive many sectors of their economies. A good example is the United Arab Emirates (UAE), who have outlined on how it plans to shape the economy in a post-Covid-19 world, its plan is to go “Big on Digital.”
Initiative
The UAE has mapped out a long-term stimulus plan to speed up recovery and encourage investments in digital economy which is built around 5G - the latest telecom infrastructure. Apart from 5G networks, smart cities and blockchain will feature in its digital push.
The “green economy” is another priority post lockdown and which will see support for industries such as renewable energy and electric cars. Another focus area will be food security by adopting advances in artificial intelligence, biotechnology and genetic engineering.
We have a chance at a clean, green and sustainable recovery that allows growth to return, but with people and communities at the centre of our efforts. Both the public and private sectors need to grab this chance with both hands to help society to adapt to the ‘new normal’ way of working to make this comeback.
References
Kalgaard, R. (2020). Five Bold Predictions for the Post-Covid-19 World. [online] Available at: https://www.forbes.com/sites/richkarlgaard/2020/04/06/five-bold-predictions-for-the-post-covid-19-world/#76fb0c27def2 [Accessed 28 May 2020].
Nair, M. (2020). UAE to Build Post-Covid-19 Economy on Digital. [online] Available at: https://gulfnews.com/business/uae-to-build-post-covid-19-economy-on-digital-announces-two-phase-recovery-plan-1.1589306921373 [Accessed 28 May 2020]
Scott, J. (2020). What Risks does Covid-19 Pose to Society in the Long Term. [online] Available at: https://www.weforum.org/agenda/2020/05/what-risks-does-covid-19-pose-to-society-in-the-long-term/ [Accessed 27 May 2020].
Article 2:
Is Kindness In The Workplace Necessary?
The importance of kindness and caring are elements of the human nature that tend to be overlooked within the business environment. It is a fine line to tread in the fear that any gesture of kindness extended may be manipulated for a selfish gain or that it will have a negative impact of the ability of a manager to exercise his authority. We are then left with organisations who have not found the balance yet and is a experiencing an extreme of incredibly draconian or completely lax measures. Both situations do not bode well for the future success of any business.
Spending time in both a corporate environment with numerous levels within the organisational hierarchy and the equivalent amount of time employed within a family-owned business, were experiences that I discovered could not have been more far removed from each other. That being said, a certain level of kindness was always practised, and I am of the opinion that extending a hand to an employee, in some form, can have a positive impact on an individual’s morale.
Whilst I have seen the benefits of kindness to employees and the effect it has on their happiness, there are a number of articles discussing these and there have also been studies in this area. The University of Warwick found, after a study conducted by economists using various experiments that there was an increase in productivity of 12% when employees were happy. Professor Oswald (who was one of the academics who led the research) said: “Companies like Google have invested more in employee support and employee satisfaction has risen as a result. For Google, it rose by 37%, they know what they are talking about. Under scientifically controlled conditions, making workers happier really pays off.”
These are significant numbers and those leaders who want to improve the success and profitability of their businesses should take heed.
There are various ways to improve the working environment. Leaders who care about their employees, who relate to them on their level and express genuine concern for even personal matters can create a positive work culture. It makes employees feel like they are accepted for who they are as people, that the company values them enough to take an interest in their happiness and create a work environment that they want to come to. Leaders who inspire their subordinates are those who show authenticity and are knowledgeable of their employees’ strengths and weakness and their personalities. They can make decisions within their teams, not just based on their qualifications and knowledge but on the ‘softer’ areas of an employee that is not as outwardly evident as the former.
They are connected.
We are in a world that is ever-changing, faster than many of us can cope with. There are new generations, advances in technology and always new-er ways of working. However, the act of kindness to a fellow human being will always remain vital to a successful co-existence. It is imperative that we practice this in our workplaces, and we will have engaged, happy, productive employees – all contributing to not just its survival but its ability to thrive.
That is, by all means, necessary.
References
Bersin, J (2014) The Five Elements of a ‘Simply Irresistible’ Organization. Available at: https://www.forbes.com/sites/joshbersin/2014/04/04/the-five-elements-of-a-simply-irresistible-organization/#72d17c8751b1
Bersin, J (2020) Our New Role: Bringing Kindness To Work. Available at: https://joshbersin.com/2020/01/our-new-role-bringing-kindness-to-work/
Haak, T (2019) 12 HR Trends for 2020. Available at: https://hrtrendinstitute.com/2019/11/26/12-hr-trends-for-2020/
Hall, J (2014) 11 Simple Ways To Show Your Employees You Care. Available at: https://www.forbes.com/sites/johnhall/2014/03/10/11-simple-ways-to-show-your-employees-you-care/#2a0b6fae450e
Warwick (n.d.) New study shows we work harder when we are happy. Available at: https://warwick.ac.uk/newsandevents/pressreleases/new_study_shows/
Whaley, M (2019) How Caring About Employees Translates To Business Success. Available at: https://hrdailyadvisor.blr.com/2019/07/09/how-caring-about-employees-translates-to-business-success/
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