As the country is limping towards the end of 2022 it is always a good time to reflect on the year that has been and turn our attention to the year ahead.
So, what happened in 2022?
In a word B2B businesses have been busy. Busy filling orders, busy chasing down stock and busy trying to find people to employ. We’ve heard some consistent themes throughout the year, – “last month was our biggest month ever”, “last quarter was our biggest quarter ever”, and “this year we have broken all of our sales records”.
It was however not without pain and challenge as we also heard “we are completely out of stock” and “we have no drivers to get our product to our customers”.
People - we don’t seem to have any left in this country, and the ones that we do have seem to attract a salary that has never been seen before. We saw and heard many stories of salespeople receiving significant salary increases when moving companies or employers counter offering huge increases to keep their staff.
Managers seemed to bear the brunt of having to pick up the slack and work harder and harder. We heard many stories of Owners having to drive forklifts or trucks, or sales team members working in the warehouse to pick up the slack. We heard stories of pros and cons on the impact on culture, as leaders had to roll up their sleeves to do what was needed to deliver to customers.
Our Sales Syndicate members expressed frustration regularly that many employees viewed the addition of 5 extra sick days, as simply an invitation to help themselves to an additional week’s annual leave, and so that is what many in fact did. This led to managers working harder to pick up the slack.
We saw culture take a hit in many companies as the ‘tail wagged the dog”. Employers tolerated poor behaviour or mediocre performance as they were so scared to lose an employee. This had a significant detrimental impact on businesses and a wider cultural impact seen across many facets of business.
Economic impacts – one of the significant challenges of 2022 was the rise in inflation and the increase in costs and having to pass these on to customers. It was a regular occurrence for price increases to be delivered, and there was almost an acceptance that it would be part of our daily lives. Many an incentive was paid to salespeople who did little to affect the outcome, with demand increasing dramatically and when prices increase this also had an impact on revenue generated.
Looking to the future, what will we see in 2023?
In a word ‘uncertainty’.
Despite all of the debate, analysis, commentary, LinkedIn chat threads and economists’ monthly updates the fact is that no one knows for certain what we have in store.
We have an economy that has sizzled in 2022, which may not be the case in 2023. We hear that consumer and business confidence is trending downwards at an alarming rate. Those who should know are telling us that inflation may not yet have actually peaked. Supposedly, we have a net outflow of people leaving the country including many of our best, brightest and youngest talent. We have heard the recession word used consistently but will it eventuate?
How many times have economists been wrong over the last few years?
I am holding out for them to be wrong again. However we do need some sting to be taken out of the market and when and if it happens it will be interesting to see to what extent. We know that for many with housing loans their mortgage repayments will increase significantly as they switch to higher interest rates, which will mean an increasing tightening of belts in households. As the great Warren Buffet said, “only when the tide goes out do you discover who’s been swimming naked”.
We also know that if there are some potential layoffs for companies, the jobs that may be the first to go are the ones that have been given massive pay rises that they can not back up with performance. We have highlighted recently, older staff members are now back in vogue. They are less likely to jump ship, they keep a steady hand and show more loyalty to their employers.
We expect to see investment in training and development rise significantly and are already seeing requests to our business at unprecedented levels. There is an element here of the last 3 years having been about survival or making the most of the opportunities in front of them, however when things slow down, there is a recognition of needing to do things better. We also expect to see many challenge their current business models, and strategy will be highly debated in offices the width and breadth of the country. This alongside a growing recognition that investment in technology & automation to improve productivity, enhance the customer experience and drive down transaction costs, will see activity in this space at a level we have never seen before in NZ.
Another significant change that will happen if there is a slowdown, is the call from many CEO’s that it is time to get back to the office. It won’t happen until the job market cools but when it does, we expect that to shift back. It won’t return to pre-covid levels, but we do expect it to balance out more in favour of the office. There is a general frustration among many CEO’s we have spoken to, about levels of productivity and culture being impacted. It may not happen in 2023, but we are predicting 2024 to see a re-balance.
Overall, we see 2023 as a slowing down, but hopefully not an ‘off the cliff’ economy. The companies that challenge their business models, that make their workplace desirable, and that look at different ways of enhancing their team’s performance will be the winners in 2023.
We are excited to share the results of the Mood of the Sales Leader Survey in January which will highlight how others are predicting 2023. One thing to note is that those of us in the Sales Industry are usually an optimistic bunch, and we also note that they have correctly picked the year ahead in all of the surveys dating back to the end of 2017.
We look forward to seeing what the next 12 months have in store, but not before a well-earned break and hopefully some decent weather! Happy holidays everyone, take a break, re charge and bring on an exciting 2023!
