The Eye of the Storm
Managing client relationships in times of economic turbulence
(An article of Elmar Scheuba, M.A. – Global Head of Healthcare ISG-Group)
In times of change, many people are scared and are facing unexpected challenges. The ISG, International Service Group, asked itself the question: How should one deal with changing situations and markets – what is the effect of the “fear of fear”?
Futurologists around the globe are more in demand than ever, especially in times like these, analyzing the social, sociopolitical, and economic effects of the given situation on the structures and behavior of the world population due to COVID-19.
Another interesting aspect the Healthcare division of ISG deals with from a point of deep self-comprehension, is the question of how the recruiting market will change – directly and indirectly. What changes do you have to be prepared for in customer and candidate contact? These are a few of the many questions the head of the healthcare sector was asking himself.
Mr. Scheuba, what is important for you in these times when dealing with customers who are rightly or perhaps wrongly concerned about their business? Which arguments and support do you provide to them?
I consider it particularly important to actively communicate with customers during this time and not leave them alone with their questions. In times of crisis in particular, it is well known that active customer relationship management is particularly important – and I do not mean just to sell or initiate business per se. Rather, it’s about showing empathy. It is easy to keep in contact with customers in good economic times, but it seems more important to look after customers when things get difficult or the market is diverse.
In your opinion, are there any companies that are currently increasing their staff pool, or to put it in another way: would you advice companies to already think about the end of the crisis and act proactively now?
A very complex picture emerges here. But one thing is for sure: for such a question, there is usually no correct and therefore satisfactory answer for all “economic players”. Right now, we see that the current scenario has different effects on the respective industries and economic fields – and then there are also cultural, country-specific and internal organizational differences and conditions. The fact is, that especially in difficult times, there are always beneficiaries of the crisis scenario. Even the big central banks cannot endlessly pump money into the markets, because it would primarily be future generations who then have to cushion the consequences of this monetary policy. What I want to say is that not all are automatically losers in view of the current momentum. Let us take individual subareas and functional segments of the economy into consideration, such as technical operations, IT, digitization and automation.
You oversee the global health sector within the ISG group: which effects do you see in this sector – not only direct, but also sustainable or long-term?
In the pharmaceutical, biotechnology, medical technology and hospital industries in particular, there is often the unanimous view that health is almost always in business and that almost unbridled, graceful growth can be expected in the coming years. As a health economist, I cannot completely deny that, but I advise moving to a more diversified view of things and events. In other words, not everything where health is labeled on, has to grow without restriction.
The word “system maintainer” has been used over and over recently. What is the special importance of preserving systems in the crisis and how is the current situation affecting the public part of healthcare systems?
With regard to this question, I would like to point out the following delimitations: In the last few weeks I have often confronted myself with the question of which players in the social system actually function as “sustainers” in the narrower and broader sense, and how much do we value these images and social paradigms in everyday practice?
You know, socially and in terms of family policy, it is not always the question of who has the better, or shall we say the higher, more respected status in the economic structure. In the last few years in particular, we have seen that family systems and target definitions have developed away from mere salary discussions towards a more compatible “work-life balance” model. These lasting changes in the perception of the individual situation and the associated definition of personal priorities inevitably lead many people to the question ‘what is really important?’
What social value do we attach to people who, for example, sit at the checkout in a supermarket or behind the wheel of a bus? Here, however, I have to state that, especially in the coming years, it will also be a matter of a general rethinking of the positioning of the salary structures and the associated creation of monetary incentives – especially for these “maintaining” occupational groups.
In order to talk about the public part of the health system, in my opinion it is very important which role you have as a player within the health system – i.e. are you a “provider”, i.e. Provider / system provider (clinics, research institutions), or a “payer”, i.e. “Payer” of the system (such as health insurance companies and insurance companies). Hospitals as well as established centers and medical practices usually feel the crisis very directly and are treating many additional patients, especially in these times – there is always a certain kind of “overload” of the system.
Furthermore, we as a society have been confronted with a divergence in the supply and demand situation for medical staff and nursing professions for several years. If we do not come up with solutions here as a communal, solidarity-regulated unit, the often quoted “collapse” of the system threatens.
There is also the private health industry. What do you think about it? Would you say that, especially in times of crisis, as far as health policy is concerned, the provision of health products to people is paramount and that more and more people are needed in these industries right now?
That is a very important point that you are making here. Pharmaceutical, biotechnological and medical technology products and services in particular cost a lot of time to develop and consume large amounts of resources. Just take the example of pharmaceutical drug development. It takes years for an active ingredient, from the first molecular sequencing to market maturity, to finally be approved and brought onto the market, regardless of the very high cost involved, of course.
But it is not the case that one can say that all areas and all product lines of the private healthcare industry are really moving from one sales peak to another right now. Rather, a very graduated perspective is required here. We have observed for instance that the demand for employees in the field has naturally declined in this phase of restrictions, whereas positions in research are currently being urgently sought. The changed conditions in business development and market expansion are certainly of further importance. Right now, many companies are asking themselves the legitimate question of the possibility of lateral diversification. In general, one can assume that companies that rely on the spirit of innovation, e.g. especially in the current situation, focus more on new national markets and invest in technically advanced market segments that will be ahead of the curve. Take the global automotive industry as an example. Some of these companies are now producing medical devices instead of cars. Here, too, there is a clear trend towards adaptability and a wealth of ideas.
Mr. Scheuba, what is your impression of the prevailing situation at the companies and their reluctance that often exists? Is it justified in any case or would you rather advice companies to be more courageous and take risks regarding new employees?
As a personnel recruiter, I would definitely advise to start thinking about the comping upswing right now. Regardless of whether we will see the often quoted “second wave”, I can only advise companies to prepare for the opening of the markets and their gradual normalization. As a recruiting company, we assume that all companies will try to recruit suitable key personnel at short notice and in a kind of “reverse reaction” after the crisis. However, this type of rushed recruiting does not necessarily work without restrictions or rather such abrupt efforts can be proven to be counterproductive. Especially in times of the coming upswing, it has to be expected that ultimately the very well qualified candidates will already have several offers. Individual players will find it very difficult to contractually secure the right fit for themselves. The notorious “war for talent” and the concentration in an “applicant market” that is increasingly characterized by the search for self-determination will take place even more intensely than before.
Mr. Scheuba, I understand this underscores the need for companies to look for suitable candidates in advance of the upswing?
Yes, exactly – that is actually the appropriate measure! I recommend our local and international corporate customers to start with the first candidate interviews or to prepare future positions. After all, there is no reason against initiating initial discussions with prospective candidates in advance, for example via video conference and new media.
Final discussions with candidates can also be carried out at short notice, if necessary face-to-face. Simply put, the only advantage is that in the worst-case scenario the time factor or momentum is on one’s own side.
In addition, we as an executive search company also offer the option of “market mapping”, i.e. essentially to verify which candidates would be available in the current situation on the market (e.g. within certain industries, functions or even geographical regions) and which efforts a future employer company would have to make to attract them. In fact, it doesn’t always have to be a recruiting project, I also consider the “market mapping” instrument to be very helpful here – and especially with regard to the current parameters.
Could you also give us tips on how candidates, who have lost their jobs in this situation, should position themselves at the moment in order to appear attractive again for future employees?
Yes of course, your question is specifically aimed at the complementary core part of our business, the other 50% of our success as a recruiting company, namely the candidate market.
We believe that especially in the area of leadership and leadership positions, the market curve has not weakened unreservedly and therefore only negatively at the expense of the candidates. Especially in times of crisis, companies need reinforced management structures in order to be able to survive such snapshots well. Here we see again that the often quoted leadership qualifications and “soft skills” are more important than before, but topics such as transformation or change management expertise are certainly among the key factors that are currently in great demand.
The question cannot always be answered quantitatively, but rather often qualitatively. Not ‘which people do I need as an employer?’ or even ‘how many new hires do I plan?’ or ‘which employees do I want to keep as a company?’ are the unconditional questions, but rather which characteristics do we need in modern pluralistic societies and which adaptive ones do we have to demonstrate in order to survive as a company, especially in times of crisis? It is important to me to mention that the adaptations and reorientations to be made within the framework of a new social and labor policy value model will affect both the employer and the employee side equally.
For candidates who are currently looking for a new job, this certainly means that they will rely even more on specialist know-how than before. The technical expertise within a functional segment or within sub-sectors and sub-industries will become increasingly important. Generalistic, transformational management structures will certainly still be important in the future, but the trend towards niche and specialization is undisputed. Well-qualified candidates who offer added value for companies will always find opportunities in the market – regardless of the political circumstances. For me, ensuring one’s own diversified suitability in time is one of the key questions that candidates have to answer for themselves (not only in these times). Losing a job is one thing, keeping one is another.
Mr. Scheuba, thank you very much for the valuable insights into your everyday work and for the pleasant conversation.