ActiveOps’ latest research, Are you recession ready? Do more with less, indicates that UK operations leaders believe a recession is likely, but 91% of organisations are yet to begin preparing.
New research from leading management process automation company ActiveOps, reveals that more than 90% of UK operations teams are yet to begin preparations for a recession, while three out of five operational employees across the UK, North America and Australia believe businesses are not equipped to deliver organisational objectives in the event of a global recession.
The report, Are you recession ready? Do more with less, analyses the current state of play in financial organisations, and surveyed 1,000 employees within operations teams across the UK, North America and Australia.
Preparedness in the face of economic crisis is a significant theme in the report, which provides insight into whether operations employees are anticipating a recession, how employees feel their organisations are preparing for it, and what the likely impacts of those preparations are.
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Findings in the report indicate that 88% of the UK respondents are anticipating a global recession in the next 12 months, however, less than 1% of senior and junior employees across financial operations believe that their organisation is currently prepared.
As well as believing there is a lack of preparedness, 100% of operations employees think that their organisations will be impacted by a financial crisis. If a recession does hit, 35% of UK organisations will make redundancies in their operational teams. Many businesses are already facing a staffing crisis due to COVID-19 and the subsequent ‘Great Resignation’, indicating that many will be forced to ‘cut the fat’ where there is little to cut.
“The World Bank is warning that a recession is on the horizon, and that means organisations need to start considering how they will prepare for that eventuality,” said Bhavesh Vaghela, Chief Marketing Officer at ActiveOps. “Worryingly, our new report indicates that operations teams in the finance sector simply aren’t prepared.”
“The strain on the UK’s economy has been exacerbated in recent times by the impact on proposed tax cuts, energy crisis and conflict in Ukraine. This means that for many, recession seems to be an inevitability and business leaders are left asking not if it will hit, but when and how hard.”
Compared to North America and Australia, 87% of UK-based operations professionals are most expectant of a recession. UK respondents were also more likely to have experienced a recession, at 82%, and 11% of UK employees believe that their organisations have started to prepare, compared to 9% of North American respondents and just 5% of Australian respondents.
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ActiveOps’ report has also uncovered differing opinions from office-based, hybrid and remote workers. In the UK, fully remote working organisations were significantly less likely to believe a recession is on the horizon (75%) than those in a fully office-based organisation (91%). For hybrid organisations, 86% of respondents felt a recession is looming.
“The last major recession of 2008 holds lessons for today’s leaders; however, we live in a vastly different time compared to just 14 years ago. Importantly, the way financial organisations run their operations has changed beyond recognition. As a result, lessons from 2008 aren’t enough to respond to a recession in 2022 or beyond,” said Vaghela.
40% of respondents anticipate that recession preparations will begin in the next 2-6 months, however the volatility of the global economy means that every day preparations are delayed is a potential cost to business.
Organisations are considering the ‘usual’ crisis responses should a recession hit. Senior respondents identified that their business will likely review processes to find efficiencies, while juniors are expecting that their organisations will absorb increased workload with fixed staffing levels.
Vaghela added: “Our survey data, combined with the opinions and experiences of experts, shows that financial organisations face difficult times ahead. If recession bites, an organisation will likely find itself unable to respond without severely damaging the customer experience, the employee experience and operational capabilities.”
“As a result, the quality of service provided to customers will suffer, and employees that aren’t lost to redundancy may leave rather than struggle with low morale and being overworked. Ultimately, these factors will cost revenue and profit. The sooner you start planning, the better chance you have of avoiding this fate.”