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What a post-Covid global economy will look like

From shared trauma to stocking up on gold, a look at the markets’ reaction to the ‘Black Swan’ event that is Covid-19 and what this means for the near future

Markets inevitably fall when events the magnitude of the Covid-19 pandemic occur. We can label this outbreak under the category of ‘unknown unknowns’ and, economically speaking, there is never a ‘good’ unknown unknown, because there is no basis for the market to respond. 

This means that the market cannot make a tight valuation of how it trades, or even where to trade, as the world’s markets are all suffering the same trauma. Oil dropped to historic lows in April as demand fears forced the prices into freefall. Yet gold, the traditional asset of the terrified, is on the up. 

The last great pandemic is out of living memory for all but the planet’s very oldest, having occurred almost exactly 100 years ago, in 1918. Since China announced its lockdown, shock has led to panic across the world. The result is that the markets can only come up with spurious evaluations as they trade because they have no precedent to go on and because no one is certain if they should be buying or selling, or at what price. 

This means that prices are currently fragile. It is this fragility that has translated into the crashing and zooming of prices currently taking place on the world stage. This increased volatility is actually a good thing for traders, but it is a bad thing for investors and is usually a precursor of even more grim things to come, because certainty is an asset and uncertainty is a constraining liability. 

Heading back to normality 

The global markets are all interlinked, and market prices represent the best estimates of what are essentially a group of highly motivated, informed, and intelligent fortune tellers. Once volatility levels start to come down (and they have done) we can start to breathe a little easier. This is a sign that things are starting to point back in the direction of normality. 

But the crash hasn’t been as deep as many had feared. There are essentially two types of market crash: a crash of 25%, and a crash of 40% or higher. The former – which we have seen, is likely to give everyone an uncomfortable ride for the next couple of years. A recession yes, but not a big depression. With a slump of 40% or more, we would have been looking at a bumpy ride for at least half a decade. 

By looking at how the market has reacted now, we can measure how the global economy will pan out over the next year. This is because the market, by nature, looks out over the course of the year ahead. So, what you see in today’s Dow and FTSE is likely to be similar to what you would see if you could peer into the future, in early 2021. 

Predicting the future

The theoretical physicist, Niels Bohr, once quipped: ‘prediction is very difficult, especially about the future.’

But by looking at how the markets reacted to the very worst, most uncertain and shocking unfolding of the pandemic, it is possible to plan accordingly. To know with a fair amount of certainty that, without some other global catastrophe, the direction the global market has already taken is predictive of the trend of the global economy for the coming year. 

The slump levels we have witnessed have not been a total surprise, because they were very high worldwide prior to the Covid-19 pandemic. Coupled with the fact that the central banks, including the Bank of England, have been totally nonplussed as to how to mitigate the situation. 

There are still likely to be bumps in the road on the way. Costly mistakes that could make the situation worse. But the good news is that, according to the current statistics, the markets should bounce back quickly from the present disruption Covid-19 is making. The market will move to drive the economy back quickly in order to appease or prevent a bad situation from becoming a chronic one. 

The Covid-19 pandemic can also be described as a ‘Black Swan’ event. A Black Swan is an event that no one could have predicted coming, but in hindsight, always seemed inevitable. In actual fact, the last pandemic was scarcely a decade ago when the H1N1 virus (also known as swine flu) killed tens of thousands across the world. We have also had two far deadlier coronaviruses than Covid-19 pop up in the last 20 years (SARS and MERS, with fatality rates of 10 and 32%, respectively). So emerging viruses, epidemics and even pandemics are more common than we would like to admit. The problem is, we have always been able to look the other way. Until now.

This pandemic – like the next market slump – was inevitable. But hopefully we can learn from Covid-19 how to react, prepare for, and mitigate the next virus outbreaks in the years to come. 

Richard Chamberlain works with Oakmount Partners, a UK-based investment consultancy firm.

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Reducing application risk after Covid-19

In light of the threat of continuing restrictions after Covid-19, reducing the element of risk for prospective students weighing up where to apply is essential, says Libreka’s Soumik Ganguly

The study abroad sector and international student mobility have been hit hard by the closure of university campuses across major study destinations, travel/immigration restrictions across the board, and partial or complete lockdowns across almost all major countries due to Covid-19.

While multiple surveys have shown that many students’ study-abroad plans have been impacted in the short term, there is also some positive data about deferment rather than cancellation of such plans – particularly among international students. In the mid to long term, therefore, the outlook may not be as bad as it might at first appear. Many students will still want to travel to the world’s major study destinations to kickstart their international careers. 

However, not a lot has been done to help students navigate through the course of the next phase of planning and preparations that will be essential. Application loss risk remains a major issue for them, for factors that are entirely not relevant to their application profile, eligibility, or the strength of their application itself. Ongoing limiting factors – including sudden travel restrictions and visa challenges may remain long after the major lockdown period is over and are likely to be the primary reasons for the loss of an application. This can deflate a student’s motivation to study abroad.

Combatting deflated motivation

Prospective students should be granted a degree of application ‘immunity’ during these uncertain times. They should be entitled to refunds on any fees paid for applications they have since been forced to retract due to circumstances beyond their control. This would allow them to focus on applying to their choice of post-graduate programmes, whether they want to study a full-time MBA or pre-experience master’s, and whether they are looking to study in the UK or Germany, Canada or the US. In other words, their ‘new normal’ when it comes to considering their options should be the same as their old normal as far as possible.

That’s the reason behind the launch of Libreka’s Application Immunity programme. The programme verifies students’ academic credentials (degree certificate, transcripts) and uses an AI-powered match-analysis to recommend a shortlist of programmes that candidates can then choose to add to their personalised immunity programme. To ensure that all immunity conditions are met, Libereka manages the admissions process, from application prep to submission, for students’ shortlisted programmes.

The Application Immunity programme links up with Libreka’s existing blockchain-based scholarship system, which allows higher education providers to offer conditional scholarship and microfinancing options to candidates who may have a longer application cycle, keeping them in touch with candidates, while receiving their commitment to enrol.

The reduction and removal of risk will be of more importance than ever for those making life-changing decisions about their future education, and those who provide it.

Soumik Ganguly is CEO of admissions consultancy, Libereka.

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Where next for the hospitality industry?

Relationship-building, trust and why students should be flexible over where they set their career sights within the hospitality industry. The short-, medium- and long-term outlook for one of the hardest-hit sectors during the Covid-19 pandemic

The hospitality industry is among the sectors that have been hit hardest by Covid-19 with more than $2.1 trillion USD of GDP loss at risk, according to the World Tourism Organisation (UNWTO). Yet, the sector has shown strong resilience in the past to cope with the effects of 9/11, the financial crisis of 2008 and the SARS virus, and is known for its V-shaped recovery curves.

As one of the world’s largest economic sectors, providing 330 million jobs, the hospitality industry will also be a key driving force of economic recovery. The travel and tourism sector, in particular, has been leading the way in providing employment and other opportunities for women, youth and rural communities. Even so, the global education industry and those who specialise in hospitality education must transform with utmost agility in order to adapt to the situation.

Short term: digital and trust

The outbreak’s repercussions are still very difficult to evaluate globally. UNWTO has estimated that 75 million jobs are at risk along with 80% of small and medium-sized enterprises. Many corporations are taking drastic measures to ensure continuity of their businesses once demand returns. For instance, hotel chains such as Hilton Hotels & Resorts closed a large number of establishments temporarily.

Covid-19 is also acting as a catalyser of digitisation as businesses will need to create or improve their online services. In order to be competitive and recover from the crisis, businesses will also need to think creatively about their operations. They will need to enhance their logistics and delivery systems to accommodate surges in demand based on changes to consumer preferences or new behaviours in readiness for any future pandemic.

Covid-19 might have changed the way we work, interact, shop and spend time but it will not change who we are and what we want from life. Having had time to reflect, people will value authenticity and meaningful values more than ever before. And finally, after months of isolation and anxiety, customers the world over will want to experience life again. Companies which will figure out how to offer rethought and authentic experiences will be leading the way.

Building or re-building trust with customers will be at the core of the experience. Health and safety protocols are now basic to any product, service or brand promise. A recent study from media agency network, Mindshare, shows that trust will be at the core of the relationship between a business and the customer more than ever.

Brands and companies that are ethical today and place people before profits, investing in medical research or supporting local communities, for example, are building their relationship with the consumer of tomorrow.

Medium term: preparing students for change

Today more than ever, education is key to being able to cope with the changes and challenges of our times. To enable students to make the most out of this remote learning period, Glion Institute of Higher Education (Glion) has implemented small group sessions of expert coaching in revenue management, hotel valuation and spa management in collaboration with fellow member of the Sommet Education Group, Les Roches Global Hospitality Education. These complimentary courses are designed to meet industry needs and allow students to obtain professional certificates in addition to their academic degree.

Glion has also created the series, ‘Leading Hospitality Through Turbulent Times’, which gives students the opportunity to attend interactive sessions hosted by both faculty members and leaders from hospitality, finance, luxury and other key sectors. From these panel discussions, individual guest speakers, webinars and Q&A sessions, students can gain knowledge that will better prepare themselves for their future careers.

Educational institutions are already at the forefront of the required transformation. Relying on emotional intelligence to manage complex environments, reinventing models, mastering the codes to better create new ones, and being committed to a sustainable future, are all part of what we are seeking to transmit to our students.

Long term: career prospects in hospitality after Covid-19

According to some analysts, domestic tourism will recover faster than international tourism and mid-scale demand is expected to recover faster than upscale and luxury demand. According to Chris Gray, Founder of consumer psychology consultancy, Buycology, and among the first to study the shopper psychology field, consumers will feel the need to build their identity and show the world how well they are doing to compensate for the level of anxiety and insecurity felt during this time. However, spending in luxury is usually reasoned by emotions and feelings rather than rationality, making this area harder to predict.

For students to succeed in job hunting after the crisis, a key element is flexibility. They should have a high degree of flexibility around what segment of the industry they would like to work in and around geographic location. With new markets in development and becoming more popular with tourists, such as Saudi Arabia, the number of opportunities worldwide is increasing, and it is important for students to take these opportunities to develop themselves and build their career. Another key element is personal network. For Fabrice Tessier, Vice President of School Relations and Partnerships at Accor, your network is where you should be investing your time ahead of the rebound.

Students who intend to pursue careers in the hospitality industry should not be worried about the situation post-crisis. One of the primary reasons this industry is so popular is the wide range of career opportunities it offers across so many different types of businesses and organisations around the world. This means students have a limitless number of options for building a career in a variety of sectors such as hotels and resorts, FMCG, events management, restaurants and foodservice, cruise ships and airlines, theme parks and casinos, retail and fashion, consultancy, tourism and many more.

Georgette Davey is Managing Director of Glion Institute of Higher Education, having previously launched Glion’s campus in London and served as Dean of its campus in Switzerland. She has 25 years of experience in academic leadership and hospitality management.  

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The emerging impact of AI on recruitment

How is AI already affecting the recruitment process, and what can we expect to see in the future? AI-oriented tech company, IPsoft, provides an overview

What types of automation solutions are at the disposal of today’s recruitment teams? AI systems are already providing numerous options.

Traditionally, recruiters have often had to log into a system and manually identify the characteristics of ideal job candidates. With conversational AI, a recruiter can use natural language to ‘tell’ the system what type of candidate they are looking for, such as, ‘I’m looking for a compliance officer with at least five years of experience.’

Advanced AI systems can even generate relevant qualifying questions to further refine the search, such as those based on location or language proficiencies. Once the recruiter’s search has been created, the AI system will independently check through numerous candidate databases and job sites. As the system already knows the role requirements, only the most appropriate candidates are shared with the recruiter to take forward.

Augmenting effective recruitment from sift to interview

Talent acquisition is one of the key tasks for recruiters and one in which AI can play a transformative role. But there is no great need to change the way that candidates apply for jobs – ultimately, it’s augmenting the ability for recruiters to work effectively and build better relationships with prospective hires. Traditional recommendations for optimising CV and LinkedIn profiles to best highlight your skills and experience remain important – whether it’s an AI or human searching.

When it comes to the interview, AI software can also design interview questions that are personalised to the person’s professional competencies and experience. This approach helps both the candidate and recruiter: the candidate has the best opportunity to present and discuss their relevant experience and skills, in turn helping the recruiter make better and more informed decisions. It can also help to reduce unconscious bias in questions, as the AI can be trained to disregard certain information and guide the recruiter away from questions that could have previously exposed a candidate to bias.

Between the search for great candidates, the time needed to conduct interviews and the challenge in hiring top-tier employees, recruiting is very resource-intensive. Many organisations – including Hilton and Unilever – therefore already rely on AI to assist HR in the lengthy hiring process. From résumé screening to interviews, AI can help limit the amount of time it takes to narrow down the pool of job seekers.

Stepping towards the hybrid workforce

Recruitment, and indeed HR as a whole, involves many routine tasks, making this an area of potential improvement through the use of AI-powered automation. From the business perspective, freeing up recruiters and HR professionals from high-volume – but not necessarily high-value – tasks, can allow them to address more complex individual needs across the business and apply their skills to other projects, such as setting up a graduate training programme, building relationships with prospects, or researching and refreshing employee benefits schemes. Automation can help make these teams more productive, and ultimately make their jobs more interesting and rewarding.

In the long term, AI is going to fully automate tasks that human employees would rather not do, or simply do not have enough time to complete along with other, more important objectives. This is an important step towards the hybrid workforce, in which human and digital associates work alongside each other to help businesses scale faster with improved productivity and efficiency.

Covid-19 is becoming the accelerator for one of the greatest workplace transformations of our lifetime, with unprecedented changes in people’s day-to-day lives. What we are experiencing today could very well hasten this transition to a hybrid workforce and bring cognitive AI into the workforce even sooner than has been anticipated.

Johan Toll is Executive Director of Transformations at IPsoft, a technology company focused on AI, cognitive and autonomic solutions.

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Being a woman leader: ‘man – I feel like a woman’

In 2020, we should be creating organisations where all genders can thrive without adopting the dominant male stereotype, argues Veronica Hope Hailey

I went to university to study for my undergraduate degree in 1975, the same year in which the UK’s first Sex Discrimination Act was passed and the country’s Equality Opportunities Commission was established.

When I entered the world of business, I believed that ability, competence and hard work would get you where you wanted to go. I did not know what I wanted to do and was content that my own lack of direction might be a self-crafted obstacle. I did not believe my gender was going to be a problem. After all, we had an Act of Parliament to protect us against gender discrimination. What could possibly go wrong?

I’m sure I wasn’t conscious of it at that time, but looking back over my career I agree with Margaret Heffernan’s book, The Naked Truth, in which she says: ‘Being smart and working hard are entry-level requirements. But they won’t protect you from the weird experience of being a businesswoman in a world that remains dominated by men and their values. The companies we see today were built by men for men. Reluctantly, grudgingly, women were granted access – at first just to lowly positions but, when self-interest was served, to more powerful positions. We called this “progress”. But everything comes at a price. The price was that we had to behave in ways that men could be comfortable with: we mustn’t frighten them, threaten them, usurp them, or in any way disturb their universe.’

Maintaining perspective

As one reaches the top levels of management, these words remain true; perhaps even more so. Despite working in a seemingly more liberal non-corporate environment than most senior women, I still have the experience of walking into some meetings, dinners or board summits to find myself the only woman in the room. Or, if there are other women there, we are still a significant minority. 

‘Mansplaining’ remains rife. If you don’t know what this word means, Google the feminist author, Rebecca Solnit, who says, ‘men explain things to me, still. And no man has ever apologised for explaining, wrongly, things that I know and they don’t’. In the face of mansplaining, I find there is the risk that in sticking up for myself with evidence of greater knowledge, I will be seen as difficult, or boastful, rather than more experienced.

So what helps me persist? A sense of the absurd, a sense of perspective and a sense of humour are important qualities for any senior manager. I also have the blessing of a large family and the most unlikely feminist husband one could encounter who has been 100% supportive of me as a person, whether I want to be a mother, a rodeo rider or a vicar. He is my greatest critic and my greatest friend. 

I am very fortunate to have another life to fall back into when persisting seems too hard in a very male senior environment. This ‘other life’ has not only been a source of comfort for me, but also a rich source of leadership development. I have built the majority of my personal resilience through dealing with tragedies and challenges in my personal life. At an early age, I was forced into needed, but unexpected, leadership roles that later equipped me brilliantly, at a psychological level, with the mental strength required to be a dean. 

If I returned home stressed or moaning, my husband often asked: ‘Did anyone die, Vron?’ Of course, my answer was always ‘no’, to which he would reply, ‘well, it’s been a good day then’. Dear women readers – do not write off experiences in your personal spheres as tangential to your development and suitability for leadership.

Challenging bias

Leadership can be a lonely and exposed place for anyone, but it can be particularly so for those who find themselves in a minority. In addition, some of the pioneering women leaders of my generation have only succeeded, as Margaret Heffernan describes, by developing a Margaret Thatcher-like carapace as part of their leadership style, taking on extreme versions of the dominant male stereotype. This does not really tackle the problem and, even if women take on these extreme characteristics, they will still never gain entry to the ‘boys club’.

Instead, those of us who are even modestly senior must try to maintain a sense of our true self, use our positions to promote the cause of the next generation of women, and challenge bias (whether conscious or unconscious) when we see it. We also need to ensure that the new constellation of female stars have leadership development opportunities that enable them to achieve their full potential while maintaining an authenticity around their own set of values. 

I feel very strongly that, in 2020, we can, and should, expect our senior male colleagues to call out sexist behaviour not ‘for’ us but ‘with’ us. Men – don’t hide behind comforting words such as your ‘concern’ about the numbers of women in leadership roles. Do something about making those roles and teams healthy places for women to join.

I am hopeful that the paths taken by my five daughters and their friends will be easier than mine, and I want to support their career journeys so that they are increasingly able to develop organisations that have been created by men and women as places in which all genders can thrive. For me, ‘thriving’ would mean that my daughters and their partners could flourish in their workplaces without having to do daily combat with unconsciously held, but biased, expectations on how the two main sexes might contribute or should behave.

Veronica Hope Hailey is University Vice President for External Engagement at the University of Bath and the former Dean of the University of Bath School of Management.