Category: Featured

By Bob Herum, MSFS, CLU, ChFC, RHU, REBC, Interim President of the CDA

 

I was asked to relook at blog I wrote during the height of the Covid-19 pandemic and explore how well I had “prognosticated” future developments. Like any such endeavor, there were certainly some misses in the narrative, but on the whole, I feel that we had more hits than misses. I will let you be the judge.

 

Getting tired of hearing the term “new normal,” or other permutations out there? I am, but it does force you to think about how different life will look moving forward, past the changes COVID-19 created. I think it’s natural to want to return to how things were before, but I wonder if that is reasonable or even likely. It’s caused me to think not only about the disability industry, but also a broader view of what day-to-day life will entail.

 

Here are some of my thoughts for you to consider:

 

• Businesses and office buildings will likely restrict employee populations and slowly increase over the next several months or years.

 

This might not have been that difficult to foresee, however, I think that most initially thought that the pandemic would pass, somewhat like the influenza pandemic following WWI.  However, the effort to get employees back into their offices is still a struggle, with the WSJ reporting that several large employers are finally trying to push the issue. In the meantime, many large cities are facing significant financial headwinds with the loss of tax revenues from business that long supported the employees that worked in their downtowns, and the ripple effects to the commercial office buildings, parking garages, restaurants, etc. continues.

 

• Many employees will likely not want to return to the workplace– if required by their employer – and will consider moving to firms that allow them to continue to work

 

As noted in the point above, this is likely a long-term issue. Many employees who relocated to lower-cost areas of the country were hired during the pandemic and feel they were promised that a remote work schedule was part of their arrangement. Finally, it has been well documented that a significant number of employees did leave their employer when confronted with having to return to their offices. This issue also has affected employers as they look at their office needs and many firms have reduced their office footprints, and even canceled or delayed indefinitely office campus expansion.

 

• Wearing protective masks may become a new normal and be required for months, and maybe even for the next couple of years, particularly in more populated areas and on public transportation.

 

I am thankful that I missed on this item. However, I do see people wearing masks in malls, grocery stores, and restaurants. However, I have also seen it on motorcycles, bikes, and when alone in a car . . . not sure what that is all about. Don’t think we will ever look like the photos I have seen of Tokyo or in China of most, if not all, those pictured wearing masks.

 

• It will take time for business travel to return to anything resembling the past and may not fully resume to the level it was prior to COVID-19. The convenience of online calls or other digital face- to-face meetings are likely to be preferred.

 

This prognostication has proven to be on target. The airline industry, AMTRAK, the NYC Transit Authority, and similar entities have all reported less ridership. In the airline industry it has been mostly offset by more those traveling for leisure. However, the lessened employee travel has greatly impacted the financials of local rail, metro, bus, etc., and several large cities have reported dramatic decreases in fee income and are having to look at coming up with other funding and/or increasing the ridership fees. This is likely going to be a huge issue for all providers of public transportation.

 

• Some fast-food restaurants may expand to include a more robust drive-through service.

 

This was and continues to be true. The WSJ has reported extensively on the growth of drive-through as the new norm. Additionally, the growth of Uber and other meal delivering carriers has also been noted. While fast food restaurants report a return of customers to their dining rooms, most have expanded their staffing for the drive throughs and many fast-food restaurants have reconfigured or added additional drive through lanes.

 

• Other restaurants will reconfigure inside seating arrangements, provide for greater separation, alcove seating, add drive-thru lanes, and create or expand outdoor seating, semi-covered and heated eating areas for general use and for customers who are reluctant to eat inside their restaurants.

 

Initially, as restaurants reopened, there was a significant effort to increase the spacing between tables. Many restaurants expanded their outdoor seating, and in cold-weather locations added heaters and outdoor structures to protect their patrons from the elements. Certainly, as pointed out in the prior bullet point, there has been a large increase in the number of firms offering food and meal pickup and delivery, and even a year after a return to near normalcy, this has not slowed.

 

• Sporting events, movie theaters and concerts will slowly increase the audience size and likely not allow full occupancy during 2021 and well into 2022.

 

While it appears that sporting and concert events have recovered to pre-covid levels, the movie industry has lagged. An unforeseen increase in the use of streaming technology and release of movies to vendors, like Netflix, has definitely affected the movie cinema industry. Large cinema firms have either declared bankruptcy or been acquired by other firms and in-person viewership has not returned to the pre-covid levels. People have gotten used to having to wait only weeks or months for a film to make its way to their large-screen video systems they purchased while they were locked in their homes.

 

• There may be a small, but vocal number of employees who will refuse to be vaccinated. Many employers may require them to either work remotely and/or sever their employment if remote work is not available.

 

I foresaw the issue of employees refusing to be vaccinated, but never envisioned the breadth of this phenomenon. Certain critical industries had very high percentages of their employees refuse to be vaccinated, and it significantly effected the Health Care industry. Many parents refused to have their children vaccinated, which caused significant disruption to schools attempting to reopen their doors.  As recently as last week, I was informed by my caregiver that while she was vaccinated, she refused to have her children vaccinated due to concerns on adverse reactions. This will likely make it more problematic when the ‘next’ pandemic hits and the significant percent of the general public is skeptical of the positives of being vaccinated.

 

• Buildings (new and existing) will be reconfigured to allow greater spacing and will have high-end air filtration systems installed. This could also occur over the next couple of years to planes, trains, buses, and other public transportation. Many will require immediate testing upon entering to ensure a person is not contagious.

 

In the short-term, as firms began to require in-person office presence, personal workstations were expanded, personnel scheduling to lessen the footprint in work areas, and other protective measures were initiated. Most of these reactions have eased as the covid exposure has lessened. However, firms that had built their business model and shared office space are struggling, with several large enterprises either closing or declaring bankruptcy. Thankfully, the wholesale covid testing has abated and covid shot record is now a historical relic.

 

• Property casualty carriers will likely add or strengthen business interruption policy language to exclude pandemics.

 

After an initial flurry of court cases in which policyholders claimed that business interruption policies designed to provide financial resources due to fire or weather should also cover mandated closure of businesses and medical practices, the courts universally ruled that the policies did not cover such situations. However, I have also read that the property casualty carriers have strengthened their contractual language and now specifically state that a loss due to pandemics is a non-covered event.

 

• New types of business insurance plans will likely be created to cover potential future pandemics or be added as an optional rider to existing business interruption policies.

 

Totally whiffed on this one . . . seemed like an obvious business need but suspect the actuaries could not figure out how to price this risk, and or the computed premium would have made it a “hard sell.”

 

• Older citizens will be reluctant to return to their houses of worship, and will join online services, if available.

 

Places of worship very quickly understood that their congregations, particularly older congregants, were not going to attend in-person services. This extended even to funeral homes, weddings, etc., and now the new norm seems to be a face-to-face service which is live-streamed to those who cannot or will not attend in person. Also, while I focused on “older citizens,” I think it’s safe to say that this was the norm among all age groups.

 

• There will be fewer physical banks, credit unions, government offices, and general business offices. These establishments will start providing their services virtually.

 

This phenomenon will continue to change how we interact with our support industries into the future. Financial institutions, like banks and credit unions, have closed local branches. The covid pandemic likely only sped this shift, and likely all of us do most, if not all our banking online. As noted previously, downtowns are struggling to get the workers back to their physical locations and most firms that do require their employees come to the office are allowing a reduced schedule, ie., two or three days a week. This decrease in the in-person visitation will further speed up the process of firms reducing their physical locations.

 

• Grocery chains may offer more ready-to-serve entree options to support individuals reluctant to eat out.

 

The grocery chains certainly were quick to pick up on this opportunity. Additionally, hundreds of local and national firms rolled out home delivery of microwave or stove-ready entrees, and I have not seen this abate as we have moved into a post-covid environment.

 

• While already started, the delivery of day-to-day meals, personal items, prescriptions, etc., will grow significantly.

 

A definite paradigm shift occurred in this area. Every grocery chain has invested in both technology and staffing to support online orders and delivery or pick up by the customer. It also moved into the drug chains, and most, if not all, have online ordering and delivery as an option. Heck, you can order your car online and have it delivered to your door. This will impact who and how many sales-support employees are necessary in a myriad of industries.

 

• Entirely new businesses and industries will come into existence that you and I can’t even imagine.

 

I still think we haven’t seen the full effect on our economy and how we interact with businesses yet. Think about how your interactions with your bank, family, customers have evolved over the last couple of years. How many had heard of “Zoom calls” before the pandemic? How many of us totally abandoned going to stores and the malls, became online shoppers, and how that has accelerated the growth of the online buying experience? This transition is often very disruptive, and there are casualties . . . closed businesses, displaced employees, etc., but the old saying that “when one door closes, another opens” will hopefully help us as we continue to evolve our “new reality.”