The majority of the global resources industry is significantly worried about the current COVID-19 pandemic, new State of Play research has found. 61% of resources executives and managers are highly or extremely concerned about the virus and its effect on personal and professional contexts.
51% of respondents are already reporting significant or strong impacts on their business, with some already out of business as a results of the crisis.
The level of concern is also growing rapidly; 80% report an increase in concern over the last week. The rapid change in expectations raises a couple of questions. How long can this continue before peoples’ expectations adapt to the rate of change? When we get through the worst of this crisis, how does the industry move to quickly pick up excess slack in production or demand? While the answers to these questions are uncertain, many of the policies adopted by the industry may be both valuable and sustainable in the longer term and may herald a shift in the ways businesses operate.
On the State of Play COVID-19 research
Given the unprecedented situation, we at State of Play are looking to use our resources to help the global resources industry understand how different businesses are responding, help provide a useful source of data and support collaboration in response to the crisis. We aim to do this by providing headline, geographical, site-based data to help decision-makers take the pulse of the industry response.
We are conducting research on a week-to-week basis to measure the shifts in attitude and ensure currency of recent data. Week 1 had 109 responses across every major continent, and we are looking to broaden the footprint of results to enable more geographical breakdown of results. We will also use this data to conduct further research on how to best prepare and respond for future crises of this nature. We are happy to share the data with researchers and analysts; just send us an email request and we’ll provide a cleansed dataset.
In its simplest form, the data is a reinforcement of the anecdotal evidence in how the industry is responding. In every continent, every industry, every place of work, COVID-19 is a big driver of disruption and change. Companies are responding with a range of measures, from travel restrictions, screening, remote work, new policies and risk management and closure of sites. The full data pack is available for download at the top of this article. Some of the most interesting insights come not from the headline data but in the breakdown of different demographics in their evaluation of the crisis and response.
We are also experiencing some initial limitations to the dataset and are looking to expand it. A priority is to analyse Asia separately to the Rest of World dataset, followed by complete continental breakdowns, and further breakdowns where possible. We encourage everyone to distribute this survey among these geographies to improve the quality of the data we are able to provide.
Operations people are more concerned compared to corporate workers. The discrepancy may be due to a range of factors; an increased focus and more visceral relationship with safety; thinner workforces due to automation and cost-cutting leading to a higher proportion of operation-critical roles; or the travel requirements associated with working on remote sites.
Perhaps in response to this heightened concern, operating sites have moved decisively towards partial remote work (64%), large-scale remote work pilots (55%) and the cancellation of all external meetings (64%).
Operations have also stepped into crisis management more quickly (54% as opposed to 48%), despite these measures being more disruptive to business-as-usual. The dynamism of the operational response to the pandemic is likely a product of more structural risk management processes and culture, however, could also suggest that operations are more aligned on adopting different operating models.
Office workers are more likely (81% as opposed to 73%) to view the pandemic as leading to substantial long-term operating model changes (although highly rated across the board). This may be due to operations already transforming, moving to more autonomous and remotely operated domains. The movement in this direction may be catalysed by the current pandemic as it reduces human risk onsite both from safety and now a health point of view.
Operating model shifts are inevitable in the long-term with the development of technology and integration of global workforces. The current pandemic is simply catalysing action in this direction. Given the relatively higher impact of technology in an operational rather than a corporate work environment to date, are operations better placed to move quickly to new ways of working?
Despite its global impact, the staggered dispersion of the virus has been an important factor in understanding its impact. As opposed to price shocks, major accidents or financial market turmoil, the pandemic has taken longer to proliferate globally. As a result, looking at impacts in particular regions of the world holds important lessons for the rest.
There appears to be a disconnect in many regions between the expected level of impact and business response. In Australasia for instance, only 73% believe the pandemic will have a significant impact on their businesses, yet 91% report significant shifts at work. In Europe and North America however, the impact and response appear to be incredibly aligned (82% predict impact, 81% report significant change at work).
Over the past few days, we’ve seen major lockdowns of countries in Europe, North America and Australasia put in place. As the restrictions play out, we expect to see the ramifications in next week’s data set.
Types of companies
One of the most interesting distinctions between the impact of this pandemic on operators as opposed to suppliers and service companies is in the long-term impact of the virus. While there is a general consensus in much of the industry that supply chains and operating models are likely to be irreversibly impacted by the pandemic (79%), this view is relatively lower among operating businesses (73%).
Suppliers and service companies on the other hand are more vulnerable to external shocks in their own supply chains and customer engagement. Already, significant innovation is occurring, with online meetings, virtual interaction and adapted supply chains. What remains to be seen is if this will change the geographical nature of supply chains, whether businesses will accept a premium for locally produced inputs that are critical to their business model?
On the positive side, the necessary shifts are yielding some benefits to counter the general disruption. More widespread engagement is available through virtual connectivity across a range of different geographies as opposed to site visits, and concerns around flexible work are being assuaged as people continue to deliver in remote locations.
As this pandemic continues to evolve and businesses respond to the dynamic environment, we at State of Play want to provide as much valuable data back to the industry as possible to help guide the response. We are now launching our Week 2 survey, with some different questions and some that remain constant to track change over time. Even if you completed the survey previously, please complete it again here and share. Thank you and stay safe!
The State of Play Team