The COVID-19 pandemic has had a substantial and likely lasting impact on the global economy. Through shutdowns, a decrease in consumer activity, and a record-high unemployment rate that hasn’t recovered nearly enough since its peak in May, $1.5 trillion had been wiped from labor-intensive companies alone by the middle of June, including nearly a trillion from the oil and gas industry, $278 billion in automotive, $130 billion in hotel, restaurants and leisure, and tens of billions more across dozens of other industries. Some of this has been recovered, but the risk of a double-dip recession and lasting damage to the economy grows as the pandemic continues.
What many hoped early would be a single hit to the economy from which we could recover quickly, has turned into a lasting scar – one that will influence how companies operate for years to come. We won’t fully know the impact of the pandemic for years to come, but companies are rapidly adjusting how they operate and the mean by which they address frontline worker safety and operations in response.
Headwinds for Labor Intensive Industries
These companies are facing a range of challenges, some of them pre-existing but exacerbated by the pandemic. Household debt, for example, reached a new historical record in Q1 2020 at $14.3T, driven in part by the late March shutdowns, but also by existing trends within US households.
Also starting to develop but not yet pervasive in the economy was the trend towards remote work. The pandemic didn’t just accelerate this trend, it pushed tens of millions of workers into remote work overnight. White-collar workers overwhelmingly remain in a state of remote work as their companies continue to adapt and implement hybrid models that support workers both in and out of the office. The resulting megatrend has had a substantial impact on the energy, transportation and automotive sectors as millions of people stay home. Air travel, commuting, and even routine trips have been severely curtailed or even fully disrupted in most major population centers. People aren’t moving around and it’s hitting these industries hard.
In February, Consumer Sentiment in the United States had reached its highest point since the 2008 Financial Crisis. It dropped sharply in response to the pandemic, and despite a slight improvement in May, it now sits at just 72.8 as of August 2020. Far from the lowest of all time, it shows a consistent trend of reduced consumer spending and less overall confidence in the market.
Unemployment is another major factor. While a sizable portion of US workers have returned to work since the all-time high of 14.7% unemployment in April, the rate is still 10.2% as of this month, nearly three times higher than the all-time low set in February. A significant portion of job losses are becoming permanent, and new claims have consistently numbered close to or over 1 million much of the last five months.
The Challenges Faced by Frontline Workers
While many companies are continuing in the remote model and adjusting to account for the decreased demand for many products and services, labor-intensive companies are in many ways less flexible. More than 30 million people in America don’t have a choice to work from, and front line workers.
Getting back to work safely and keeping front line workers safe is not easy, with key challenges including:
- Detection is only 75% effective at best without systematic, pervasive and distributed COVID-19 testing
- Prevention relies on leadership and discipline with physical distancing and wearing face masks. Vaccine uncertainty.
- Monitoring and contact tracing at work is not automated yet so a successful detection is not an effective outbreak containment.
- Health containment initiatives are costly and compliance is almost discretionary
Automating the New Normal for Work
To address these challenges, many companies are accelerating plans to digitize and subsequently automate front line work as part of the new normal. Andonix Safely Pass is at the forefront, helping to make this possible.
By helping companies start with an easy and scalable solution to automate health containment initiatives at work, they are able to establish a foundation to monitor, prevent, and detect potential symptoms, stopping the spread of COVID-19 and protecting employees.
In the short term, this helps labor-intensive companies address the high cost of health containment, reduces the risk of having to close, deal with ballooning sick day costs, and more. In the long term, it establishes a foundation for further improvements that can have a lasting impact on the organization: telehealth for front line workers, IIoT devices to augment, automate, and reskill workers, and optimization of key resources to reduce waste.
Learn more about how Safely Pass is helping companies adapt to the new normal and support their transition to digitization and automation.