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Why 2024 will be a Watershed year for Business

While businesses are still trying to recover from the effects of the COVID-19 pandemic on the economy and manage internal issues like employees working from home, new data shows that businesses are in for a rough ride in 2024. Gallup’s State of the Global Workplace:2023 report provides key insights into employees' situation, and how this might impact workplaces.

From a sub-Saharan regional perspective, 70% of employees are either actively seeking or keeping an eye out for new job opportunities, while 20% are engaged at work. Globally, these figures are 51% and 23%, respectively. Historically, this has not been as much of an issue as it is today. For instance, employee engagement was only 12% in 2009 and has slowly risen since then. However, when the global economy is in a slump and business margins are under pressure, businesses are unable to continue growing when the workforce is disengaged. Trying to turn things around under such circumstances is proving equally difficult. The net effect is a double lack of enthusiasm on the issue from both employers and employees. Large corporates, particularly in the tech space, laid off 260 000 employees last year. Across other sectors, companies like CitiGroup, Macy’s, Wayfair, Disney, and more are all expected to lay off staff.

On the employee front, 53% globally are looking to change jobs and don’t necessarily stay in jobs for long either when they move. Data from the Work Institute indicates that 38% of employees leave within the first year, and 43% of those employees leave within the first 90 days. Executive turnover is also high. CEO turnover in the US increased by 47% in 2023, according to Challenge Gray. The disruption on a leadership level and having enough hands-on deck to get the work done are proving problematic. In South Africa, a similar trend of CEOs moving on is observed, with over 50 top corporate CEOs leaving their positions in the last few years. The public sector has also seen a number of CEOs move on.​

What’s happening on the ground?

Having had extensive conversations in the local market to verify the "lie of the land", a picture has started to emerge. The pandemic was about survival. Post-pandemic was about figuring out hybrid work and turnaround strategies. But now Boards are looking for momentum again and the fact that executive teams often don’t have a lot of answers, together with the statistics above, is making it difficult for businesses to make headway. The net effect is that both employees and executives are being cut, and uncertainty and anxiety abound.

Looking deeper

So, what’s the answer to it all? Well, it depends on where a business is in its lifecycle, but in general, either more process or more innovation is required. And a lot of change management.

Large corporates are invariably process-heavy, and the temptation in tough times is to try and batten down the hatches and survive. That’s not a strategy that’s likely to encourage staff retention, though. Ultimately, it leads to layoffs and less revenue - cost-cutting affects capacity. In this case, the answer is that corporates need to get off the "treadmill" and start figuring out how to get new products that are relevant into the market. That’s difficult when innovation projects have been shut down, or no R&D budget exists.

On the other hand, some businesses have good product sets and have innovated in the past to give themselves a portfolio of products that has potential for the future. The challenge there is one of focus and discipline. Businesses that have grown quickly in the past invariably have a strong vision and have had a committed team that has supported the growth. But the current environment also calls for determination, grit, problem-solving, and, if businesses are lacking focus, a healthy dose of process can make a big difference.

The issue of change management.

Change management is all-too-often a response to what has already been decided and implemented - a "help people buy-in and adapt" effort that doesn't engage team members and access their critical thinking and creativity.

Here, the Springbok Rugby Union team have been a shining example of how to approach the situation. The story is well-known, but the truth still applies that getting everyone onto the same page, creating a shared purpose and empowering team members to make decisions needs to become a business "new normal" in 2024. The Springbok squad's strength is what won South Africa the Rugby World Cup 2023, along with unity among the players and coaching staff.

Remembering that business is a team sport and the health of teams in business is a priority is a good place to start in finding a way forward in these difficult times.

Steve Whitford

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