• Asia’s experience with previous crises proves to be beneficial during the outbreak
• Certain businesses might emerge stronger post crisis
• A new digital era is driving human resource agendas

The impact of the current market turmoil – a glimpse into the past

The global COVID-19 pandemic hits most businesses and markets with full force, leaving markets in turmoil and recession. Economies are under pressure on all ends – by plummeting consumer demand and disturbed supply chains, resulting in severe economic consequences.

A recession seems inevitable for many Asian markets even though the extent might differ from case to case. While a slight improvement can be seen in several countries, a dismal economic period is yet to come.

Countries around the world have different ways to curb the pandemic. Many Asian nations have shown to be particularly resilient building on previous experience with epidemic outbreaks. Other than most European countries, most of Asia had to deal with several lethal diseases over the decades, such as H2N2 in 1958, H3N2 in 1968, the “bird flu” in 1997, and SARS in 2003. The current epidemic (SARS-COVID2) will stay with us for the foreseeable future, bearing threats and opportunities at the same time.

We, Kienbaum Singapore, would like to take a look at the potential “opportunities” that might be arising besides the widely discussed threats to our health and economy.

Lasting impacts derived from previous crisis environments could help us to grasp an understanding where opportunities can blossom. The SARS outbreak in China, for example, has boosted online sales to a new height. E-commerce giants such as Alibaba registered a humming new business environment once customers changed purchasing behaviors in favor of digital models and virtual malls. A suspected one-off effect didn’t happen and consumer preference changed in the long-term. Chinas e-commerce activity thereof grew with a compound annual growth rate of 120% from 2003 onwards. The second in line (Russia) grew by 39%, respectively.

Assuming a “new norm” – what lies ahead?

To carve out and depict “chances” for businesses when responding to new trends, consumer mindsets and business environments, we need to assume a “new normal” that lies ahead:

• South-East-Asian nations might benefit in the long term if organizations are prone to diversity their manufacturing locations throughout various countries in the Asian region, as particular dependencies to one country have hurt supply chains severely. As a consequence, the need for regional leadership capabilities might see spikes shortly.
• Digital learning platforms have proven extremely helpful to keep children “at their desk ” without disrupting the teaching curriculum entirely. It has to be shown if learning institutions will proceed with their digital agenda and keep specific modules “online”. However, the trend is set, and digital learning might see significant growth down the road. Trends like “Gamification”, “Micro-Learning”, and environments within “Augmented & Virtual Reality” might gain further momentum.
• Online health consultation could show its full potential during the crisis. Platforms in China and South East Asia have seen rising demand and supported the health care system significantly – specifically to curb infection rates for doctors and healthcare workers. A thriving new business model could support a modern health agenda, keeping those who are infected at home, thus preventing a further spread of any given disease.
• Soft- and hardware providers see flourishing demand by corporates, governments, and individuals to digitize their way of working. A “new norm” could push a “fast-forward” button in digitizing our business collaboration even further. Travel budgets might shrivel after the world has seen that business can run remotely.

The new Human Resource agenda – what are we supposed to do?

A new digital agenda will drive our businesses for the foreseeable future. Adaptation to a changing environment will force organizations to implement “digital “into their human resource agenda. The speed and agility of this process in Asia will separate champions from low performers in the future. Here are some takeaways to consider for your post-COVID HR agenda:

• A “digital mindset” becomes essential for every professional – regardless of rank and responsibility. The need for a digital workforce has never been so pressing in order to stay ahead of competition and market requirements. Do not compromise and assess the digital maturity of your workforce from a professional standpoint. Not to mention that “digital leadership” encompasses more than the management of virtual teams.
• Asia will continue to pertain as a dynamic growth opportunity. Changing consumption patterns will find rapid implementation in a dynamic region. You need the right talent at an early stage! We expect a scarce talent market for specialist experts (e.g., e-commerce) yet to come if markets swing back.
• Anticipate potential business opportunities as early as possible to procure the necessary management and leadership capabilities. Hire and retain those competencies swiftly. Especially post-crisis, during an economic upswing, the highly competitive Asian talent markets will come under further scrutiny and top talents’ compensation will increase even further.
• Even if social distancing forces us to adapt to new ways of leading businesses in Asia – make sure that your company is still committed to the region and its potential. Employees shall feel appreciation, transparency, and guidance from the regional leadership team in difficult times. Cost reduction might be necessary to survive but should be implemented with great caution – bear in mind: overperformers will be the first ones to leave once the market swings back.
• Non-monetary appraisals might grant a reliable alternative to keep frustration about missing financial reward at bay: publicly praise so-called “brand champions” who have shown outstanding commitment to the organization in times of crisis. Recognition and praise make a big difference!
• Take a critical look at the possibilities of digital working. In Asia, large travel budgets are an essential cost for every business. Although business travel will still be a necessity post-crisis, the current situation represents the possibility to realize a new level of efficiency in business leadership

For further questions please contact:

David Liendgens | Mail: David.Liendgens@kienbaum.com.sg | Tel.: +65 6838 0731