Webinar Recap: The COVID-19 Economy
On July 7th, in partnership with Paychex and Oasis, we presented a webinar titled “The COVID-19 Economy: The Economic Impact of Seismic Surprises”.
SurePayroll’s Customer Lifecycle Lead, Kevin Aubrey, moderated the webinar, which featured Dr. Marci Rossell, former chief economist for CNBC and co-host of Squawk Box.
Missed the live event? We’ve got you covered with a round-up of key takeaways from the discussion, and have an on-demand recording of the webinar available if you’re interested in learning more about what Dr. Rossell had to say.
Three Ways The COVID-19 Pandemic is Different from Other Crises
To kick things off, Dr. Rossell provided some level-setting context for listeners to consider as she delved further into the impact of COVID-19 and potential paths to recovery.
- The location of the “shock”. In previous economic crises, like Y2K and the housing market crisis of 2008, the economic “shock” came from inside the economy. The economic downturn resulting from the COVID-19 pandemic differs because the shock came from outside the economy. She said it’s helpful to think of the pandemic as a natural disaster that affected the economy. In a normal downturn, layoffs often happen as the economic uncertainty lingers over a prolonged period; due to the shutdowns and lockdowns associated with COVID-19, layoffs were early to occur for many businesses.
- Reallocation event. COVID-19 has turned our world upside down. Moving forward, every aspect of our lives, how we work, live, and play, will be impacted. Rossell explained that there will be a significant reallocation event as we work towards a new normal, but the changes will not be evenly distributed across the country. Certain industries will fare better than others, and some changes will be determined based on geographic location.
- Escalation of existing trends. Prior to COVID-19 there were already some shifting trends in play, such as the move to online retail, moves out of big cities to the suburbs, and work from home opportunities. Dr. Rossell said that any trend that was already emerging before the pandemic will be escalated. Due to the lockdowns, people are looking for more space and easier access to fresh air, hence the move to the suburbs. Some companies already had telecommuting policies in place, and some major companies, like Google and Twitter, have announced that employees will either work from home for the rest of the year or have the option to stay home forever.
What Will Recovery Look Like?
It’s been a challenging few months for many reasons, and people are eager to know what economic recovery will look like. Several different alphabet shapes are often referenced when talking about patterns of economic recovery, the most common being V-, W-, U-, and L-shaped curves. Regarding COVID-19, Dr. Rossell said it’s hard to guess which shape the recovery curve may take because of the external factors affecting the economy from the outside in. However, she explained that it’s important to note that recovery won’t be able to happen until reallocation occurs. For example, the oil and gas industry will begin to improve when people can travel more freely or return to their commutes. Due to the number of layoffs, and desire for more space, many people are looking for new jobs that could land them in a new state, or different geographic area in their current states. For these reasons, the housing market could potentially be the way out of this downturn. Anything that will halt those shifts could lead to longer recovery times.
A Bright Spot in These Challenging Times
For small business owners with brick and mortar locations, Dr. Rossell indicated she sees hope on the horizon. In a normal recession, if business owners are struggling to pay rent/mortgage, landlords often aren’t very lenient because there is always another business ready to fill that spot. With COVID-19, that paradigm has shifted, as the impacts have been largely industry-agnostic (though some industries have been impacted more severely than others). Dr. Rossell expects flexibility from landlords and the potential for lease negotiations, as their alternative could be bankruptcy.
What Can Small Business Owners Do Moving Forward?
At the end of the webinar, Dr. Rossell opened it up for questions from the audience. One that came in was about what small business owners can do right now to adapt and change to this new normal. She noted that while her advice isn’t new, it’s more important than ever to consider: focus on cash flow and liquidity. For business owners with cash flow at 0 and no personal assets, it will be harder to get going, but it’s possible to get on the right track.
Dr. Rossell said it’s important to focus on the “winners” of COVID-19 and begin targeting those customers. She said a good starting point for small business owners would be focusing on an ideal customer profile that includes these attributes:
- Annual income over $80,000
- Employed in a job where they can work from home
- Located in a geography that is doing well.
Additionally, Dr. Rossell recommended that businesses who have previously focused on customers in major cities considering turning their prospect targeting to smaller cities or surrounding suburbs. It’s essential to pivot thinking during this time and get creative in how you’re targeting new customers.
COVID-19, the associated economic downturn, and the path to recovery for small businesses is a complicated—and constantly evolving—situation.
Rossell shared more specifics and insights on some of the topics highlighted above and answered additional audience questions that will of interest to you as you adjust your thinking and planning to match the curve that this recovery takes. Access her full presentation by watching the on-demand webinar.
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