This time it’s different.
That statement should usually be taken with a grain of salt. But right now, it’s a very good description of what’s happening in the business environment.
Market economies function by balancing supply and demand for goods, services and inputs such as labour. When trouble arises, it’s usually in the form of recessions and depression. These are caused by a lack of demand. People and businesses aren’t spending money, so goods and services aren’t being produced. Jobs and incomes are lost, and the downward cycle continues.
The COVID-19 pandemic would have created such a scenario had governments not pumped lots of money into the economy.
Many people have benefited from this government largesse. With the waning of COVID-related restrictions, employment has soared and unemployment in Canada is close to the lowest level ever recorded.
People have money, and they’re anxious to spend it and enjoy themselves after the limitations of the last two years.
Demand is booming. It’s the supply of wanted goods, services and inputs that’s lacking.
Most kinks in the supply chains are pandemic-related. Lockdowns reduced production. Travel restrictions hampered the flow of people and things. And now, the war in Ukraine will further limit the availability of food and energy.
Most Canadians have never known shortages, especially if they’re in the labour force and live in the larger centres. We expect that whatever good or service we want will be available. Business assumes that labour and other needed inputs are out there.
Of course, we need the cash to pay for things and we may have to pay a bit more when demand is high. But the idea that an essential worker, required machine part or a desired item from the supermarket is just not there at any price comes as a shock.
And many of us have been shocked by an empty shelf in a store or when told that a part to fix our car isn’t available and no one has any idea when it will be. Business people are being told that if they build a factory or open a new coffee shop, there’s no guarantee they will find people to operate it.
Here are some ideas on how businesses, families and all of us can meet these new challenges:
If you have no luck buying the talent you need in today’s very tight labour market, you might have to make it yourself.
Provide experience rather than trying to demand it. Hire entry-level workers. Offer training on the job. Pay for courses. Let staff learn from YouTube videos on company time. You could end up with a capable and loyal staff.
When it comes to parts and materials, think ‘just in case’ rather than ‘just in time.’ The cash outlay and storage costs of getting more than you need before you need it are likely to be much less costly than having production interrupted by shortages.
Replace retail therapy with creativity. Instead of using any possible reason to shop for clothes, check out your closets and drawers. You may find forgotten items or see new and different combinations to create new outfits. And if you’ve not been socializing during the pandemic, much of your dressier wardrobe will look new to you and to the people you see.
A similar approach works in the kitchen. Instead of thinking up a menu, generating a list of needed ingredients and heading off to the store – or stores – hoping you’ll find them, take an inventory of your fridge, freezer and pantry. Then build a menu from what you have on hand. The Internet can offer recipes for a specific set of ingredients.
Ideas like these not only help you work around shortages, but they also help you save money in these inflationary times.
Being flexible means you’re less likely to be stymied by any specific shortage. A different time, location, or method might help or even offer an entirely new approach to solving a problem.
Networks can prove invaluable in finding tools and talent or in suggesting new approaches. Who you know can make all the difference.
Remember that you’re part of other people’s networks, too; share your knowledge and ideas about how we can survive the shortages.
Troy Media columnist Roslyn Kunin is a consulting economist and speaker. For interview requests, click here.
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Troy Media is an editorial content provider to media outlets and its own hosted community news outlets across Canada.