Operations teams across North America aren’t prepared for impending recession, industry report reveals

New York, USA – October 11, 2022 – New research from leading management process automation company ActiveOps, has revealed that despite 77% of US operations teams believing a recession is likely in the next 6-12 months, more than 90% of US operations teams are yet to begin preparations. As well as this, three out of five operational employees across North America, the UK and Australia believe businesses are not equipped to deliver organizational 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 organizations, and surveyed 1,000 employees within operations teams across North America, the UK 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 organizations are preparing for it, and what the likely impacts of those preparations are. 

Findings in the report indicate that 77% of US 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 organization is currently prepared. Respondents in the US are also more likely than those in Australia and the UK to not feel equipped to deliver against organizational objectives in the event of a global recession.

As well as believing there is a lack of preparedness, 100% of operations employees think that their organizations will be impacted by a financial crisis. Almost half of US respondents think the biggest cuts will be made to existing employees in the event of a global recession, compared to 45% of UK respondents and 40% of Australian respondents. 

Specifically, 35% believe that the biggest negative impact to their organization’s operational teams in the event of a global recession will be mandatory redundancy. 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 organizations 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.”

“Many banks and financial services operations teams have already been working at reduced capacity for some time and so it is unsurprising that those in the US feel underequipped to face recession. The fear that a recession will lead to further redundancies is one that is shared across the Atlantic and so it is no surprise that both regions will seek out greater capacity from their existing teams. Technology will be key in gathering, understanding and implementing the data required to uncover this capacity.”

Compared to the UK and Australia, US-based respondents are likely to think their organization will absorb increased workload with fixed staffing levels first in the event of a global recession at 35% and 34% also foresee having to review their existing processes.

“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 organizations 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.

Organizations 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 organizations will absorb increased workload with fixed staffing levels.

Vaghela added: “Our survey data, combined with the opinions and experiences of experts, shows that organizations face difficult times ahead. If recession bites, an organization 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.”

To read the full report, Are you recession ready? Do more with less, click here.