If the second half of 2019 is anything like the first, business leaders are in for a wild ride. The geopolitical landscape remains as volatile as the stock market. Signs of an economic slowdown are emerging, making consumers and investors equally skittish. Organizations are still looking for ways to cut costs while ramping up investment in automation and other technologies.
We asked experts where it all may go from here—and what are some of the biggest issues business leaders should watch out for over the next six months
No issue dominated business news more during the first half of the year than trade. Until the dispute between the United States and China ends, that isn’t likely to change. Already the standoff has caused prices to decline while forcing companies to pay more up front for raw materials, impacting profits and return on investment on new projects. Ron Malachuk, a principal in Korn Ferry’s Global Industrial Market practice, says the result has been a chain reaction. “Industrial firms are hesitating on project expansions and new investments,” he says, “causing hiring to slow and in some cases halting it altogether.”
An indicator of how people feel about the economy, consumer sentiment has gone from rosy to anxious, with mounting concerns over a downturn. As companies face increased costs, the fear is job growth will fall and layoffs will be imminent. Craig Rowley, a senior client partner and global practice leader for the consumer sector at Korn Ferry, says that a big influence on consumers this fall will be the beginning of the presidential campaigns.
“Uncertainty around the election will impact how companies invest,” says Rowley, “and influence how consumers view the predictability of their lives, which impacts their confidence and personal willingness to spend and invest in their own lives.”
The job market has been sending off mixed singnals of late. In May the US economy added just 72,000 new jobs, but added 224,000 new jobs in June. Regardless of the overall stats, Melissa Swift, a senior client partner and leader of the Digital Advisory practice in North America for Korn Ferry, expects the hiring market to remain hot for the right kind of talent.
“There is a disconnect between the economic rhetoric and business behavior,” says Swift. She says organizations aren’t hitting the brakes on hiring as hard as they might have in the past because “regardless of what is happening in the economy, they still have to change and reskill talent for the future.”
Walkouts. Unions. Social media callouts. Employees, more empowered than ever, are speaking out more than ever. A recent survey found that nearly 50% of millennials recently spoke out either in support or in criticism of their employer’s actions on a controversial issue.
This trend isn’t going away anytime soon and will likely increase in both frequency and effectiveness in the future, says Alina Polonskaia, a global leader of diversity and inclusion solutions with Korn Ferry. The activism is being driven in part by the purpose movement; consumers and employees want to back organizations that make a positive social contribution. But Polonskaia says that the need for talent with extremely specialized skills is also a driving force. “Employees that have the in-demand skills are realizing they have the power to speak up and voice an opinion,” she says, adding that leaders need to develop listening channels to connect with and understand what’s on the minds of employees.