The start of the year sees us at a rather confusing impasse regarding the COVID-19 situation. We find ourselves caught between Metro Manila’s return to stricter Alert Level 3 conditions, wherein businesses are only allowed to operate at 30% capacity, and surges brought about by the Omicron variant of the coronavirus and easing of restrictions over the holidays. These come on the heels of economists’ positive outlook of steady growth across Asia during the latter half of 2021 due to high vaccination rates, and business optimism recorded in the International Business Report (IBR), a survey conducted by Grant Thornton. It found that 80% of mid-market firms in the Philippines were optimistic about the country’s economic outlook for 2022. But with health experts cautioning that we might see peak positivity rates in the coming weeks, it is hard to say for sure where businesses will land this year.
In any case, it is always best practice for company leaders to look at trends in their industries and plan accordingly for the new year – and what a year 2022 is already shaping up to be.
Of course, there are other factors that might cause uncertainty later in the year, such as the upcoming presidential election and the figurative and literal storms that might come our way; but for now, the new year is a time that allows for hopefulness. Here are a few predictions that we feel confident in declaring.
2022 will remain an employee’s market
Traditional companies might want to hold off from breathing a sigh of relief. While we may have left the brunt of the Great Resignation back in 2021, the war on talent is no less intense as we welcome the new year. The concern over the availability of a skilled workforce matched with unprecedentedly high vacancies has resulted in wage pressure on the employers’ side and quite a bit of negotiating power for the employee. Our own IBR showed that 59% of Philippine firms expect to hire and expand their workforce in 2022, and the private sector is steadfast in its commitment to create new jobs in the first quarter in an effort to boost economic recovery. Potential lockdowns, and the troubles that come with them, seem to be the only barrier against the ability and desire of companies to expand this year.
Now that we are in the middle of high inflation, it has become apparent that companies ought to prepare for an increase in labour costs across the board, with an average expected rise of 3.9%, if they want to remain an attractive option for experienced talent. Otherwise, they might want to look into alternative forms of compensation, such as profit-sharing and non-basic wage options, as part of their New Year’s resolution.
Skills investment at the heart of resiliency
Speaking of experienced work, the following year may see flexibility in terms of recruitment as more companies focus on the skills and core competencies that potential hires can bring to the table rather than their pre-designated roles within the organization. With companies in the middle of their own digital transformations, suffice to say they will soon need workers to man their more technical capabilities too. Companies that take the initiative to digitally upskill their existing workforce and aim to have a digitally literate staff have shown more improvement in overall innovation.
Skills investment does not only foster a highly qualified workforce that adds to a brand’s competitive advantage and authority within an industry; a company environment that encourages continued learning and growth also serves as one of the methods to attract and retain talent. Additionally, a little overlap in employee skillsets ensures the ongoing operations of a company despite connectivity issues or disruption.
Remote work is here to stay
One way or another, it seems remote working will stay a crucial aspect of business operations for 2022. Many firms are set to conduct their own test run of hybrid work starting 2022, but they might also opt to remain fully remote depending on how the year plays out. There are, at least, clear benefits to keeping remote work on the table. Studies show that hybrid work is the preferred arrangement of most staff as some employees have found better work-life balance in the remote set-up. Further, retaining a more remote aspect allows companies to cast a wider net for recruitment and help ease the problem of talent shortage.
As the new year unfolds, there is hope for a win-win situation for companies and employees alike. The challenge for 2022 is to learn how to adopt remote work more successfully. The decisions top-level executives need to make in this regard include ensuring staff members are not alienated and excluded from either human connections or opportunities within the company and updating their tech stacks as appropriate. Flexibility in terms of working hours may also be on the agenda further down the line.
Data and software as the new drivers
Lastly, while the Department of Trade and Industry’s aim of turning the Philippines into the next artificial intelligence (AI) powerhouse might seem a far-off dream to cynics, there is undoubtedly a lot of benefits for corporations to adopt stronger data-driven solutions and digital strategies. There is more opportunity for them too, as 2022 increasingly sees software accessibility expand to small businesses. Automation, dynamic data infrastructures, augmented and predictive analytics, and even software that encourages more social collaboration will see new uses in the future of work.
In fact, companies seem on their way to implement such strategies as, according to the results of our IBR, 57% of local firms expect to increase their investment in research and development while 54% expect to increase their investment for technology.
Echoing the cautiously optimistic attitude of researchers, uncertainties may still plague the following year, and so it is advised that traditional firms prepare for the challenges that might arise from Omicron and other unforeseen circumstances. Still, we have foundations in place that can support a more robust digital transformation. We also have experience in leading with compassion and placing focus on employees’ well-being without sacrificing operational efficiency. While 2022 may yet be another year full of trials, we are hopefully better equipped to face them now than we were at the start of the pandemic.
As published in The Manila Times, dated 05 January 2022