I’ve noticed some recent trends I’d like to share.
Since the time of the Great Depression, and more recently, through seasonal fluctuations and economic downturns, the economy has always responded in typical ways; lay people off, continue to run the business as usual, and then bring people back on board when the consumer resumed spending. That’s not the case anymore, nor will it be going forward. There will always be a degree of seasonal adjustments in the marketplace, but it will not be “business as usual.”
The recession actually began in 2006, culminating in the country’s financial collapse in November of 2008. The most significant phenomena to come out of this shift in the economy has been that people are now being terminated instead of simply laid off and company’s are no longer sitting still and waiting for things to get better. They are adjusting their business model, or in more formal terminology, undergoing organizational restructuring. This means that the fundamental principle of our economy, which is that jobs is the primary indicator of a healthy economy, is being influenced in a way we’ve never seen. Jobs are not going to come back near as quickly, nor in the same way as we’ve been accustomed to in the past. The labor pool is going to have to undergo the most significant re-education transformation that we’ve ever seen. To get jobs that are actually sustainable in the new economy, people are looking for specific niches that they can fill over the long term, and to do that will require more specialized educational support than we’ve witnessed in the past.
This process of organizational restructuring is not only in response to the recession for the sake of expense control, but also in response to the change in the consumer’s attitude on the demand side of the marketplace. The consumer is now demanding real value, not necessarily in terms of new products (although still important), but in terms of how products and services are delivered and sustained over the lifetime of the purchase. In more practical terms, the consumer is tired of being taken advantage of and is going to be more diligent than ever before about what they buy, how they buy it, and how they will be supported by the the product or service provider. What companies have to do now is create organizational structures that are efficient, quick to respond, and that provide a level of service to the customer that is beyond the pale and sustainable over time.
Truth Be Told, the reason that I emphasize sustainability is because these new consumer spending habits are going to last a lifetime! As the Great Depression changed the consumer habits or our parents and grandparents for the rest of their lives, so the Great Recession and Financial Collapse of 2009 (if you will) has forever changed the way we will function in this new economy for the rest of our lives.