After attending the recent NYU Stern webinar ‘In Conversation with Professor Scott Galloway’ hosted by Dean Raghu Sundaram, I was interested to hear more about Galloway’s predictions for the post-COVID future.
Professor Scott Galloway is a brand strategy and marketing professor, the author of The Algebra of Happiness, co-host of the Pivot podcast with Kara Swisher and host of The Prof G Show podcast. He also has a new show on Vice called No Mercy, No Malice, that airs every Thursday at 10 p.m. EST.
While it’s currently unclear when (or, if ever) the world will return to “normalcy,” here are his notes on what he expects various facets of the business world to look like post-coronavirus. He provided his responses below via email.
“The lowest common denominator right now is point-of-sale. Online platforms like Amazon solve the problem of where you buy. Instead of everyone meeting in one central location, your home becomes the store. Under normal circumstances, online shopping is a matter of convenience. Because of coronavirus, it’s a matter of necessity. You interact with at most one person (the delivery man) before receiving your online purchase.”
“It’s the reason other companies that haven’t been successful are all of a sudden performing well. From May 2019 to March this year, Wayfair’s stock price dropped 83%. Since then it’s up over 300%. The same story holds true for other ecommerce platforms like Ebay and Overstock. It all comes down to a widespread, democratic point-of-sale.”
Labor and Companies
“While a record 26 million have filed for unemployment, Amazon has hired 175,000 new workers. Over the next year we’re going to see a migration of workers from small companies to big ones. Workers will be attracted to the stability larger firms offer, even if the work is under contract instead of salary, and large firms will be more than happy to accommodate.”
“Coronavirus has proven that remote work at a large scale is possible. Google has been ramping up its contract workers for years. Most of its employees are not technically Googlers. Look for Google to start ramping up remote hires as well. Coronavirus has shown that, on top of not dishing out salaries and benefits, Big Tech can also cut down on real estate and utility costs.”
“We’re going to see an increase in wages for a number of reasons. Here are some of them.”
“Firms will be weary to set up factories abroad with more uncertainty around travel restrictions and the varying pace of reopening economies country by country. This will lead to a small boon for manufacturing jobs stateside and, because of a generational shortage of manufacturing labor, a rise in factory wages.”
“Wages are also going to rise for essential workers, particularly those with high-contact jobs (cashiers, nurses, train conductors, etc.), but not because of any goodwill from McDonald’s, Lenox Hill, or the MTA. A phobia of high-contact areas will decrease the supply willing to work these jobs, leading to higher wages.”
“The theme should not be wages though. While it’s a step in the right direction, you’re still going to struggle to pay rent whether you’re making $12 or $14 an hour. We’re going to see a bifurcation of income brackets like never before between those with salaries and those with wages. What’s been happening with Google and it’s contract hiring will start happening to the rest of the economy. On the surface, wage increases will make it look like ‘everyone is now a Googler.’ In reality, firms will hire as much of their workforce with short-term contracts as possible to allow the greatest flexibility. It is unclear whether reopening the economy will take weeks, months, or years. Firms both big and small can’t afford to make long-term investments in this uncertainty. A larger and larger share of the workforce will have minimal job security and few, if any, benefits.”
Jobs and Startups
“The employment question of the next decade: do they offer salaries? The game will be to get and stay in the salaried income club. What this means for MBA graduates is transition away from high-level positions at startups to mid-level positions in large firms. This will mean sacrificing quality job experience and equity for job security and a consistent income. This will also mean shying away for positions in industries whose revenue is cyclical (think real estate and advertising) towards more stable industries (think healthcare).”
“On the other hand, if you have the capital, a recession is the best time to start a company. Skilled labor is cheap, real estate is cheap, and a lot of talent is out of work. Tons of now-household-names were started during the last recession (Instagram, Uber, and Venmo to name a few). Some words of advice. First, hire the most talented candidate, even if they are asking for (a lot) more. It will take some convincing to pull top candidates away from large firms, and more zeros on the paycheck goes a long way. Second, unless it’s absolutely necessary, hire part-time and remote workers. This will give you much more flexibility in the early stages, and save thousands in desk space and benefits. I see the irony in this advice: I’m feeding the ‘salary vs. wage’ beast. The central fault of capitalism is what’s good for business is not always good for people.”
“You can check out my new show on Vice, Thursdays at 10pm ET.”
Photo credit: @profgalloway/Twitter