The last half of 2021 has witnessed a resurgence in economic activities in the US due to several monetary and fiscal stimulus and increased consumer spending. However, the supply chain challenges, rising price pressure, and lingering virus concerns have increased inflation. Several pundits predict that 2022 may present several disruptions which may interfere with your business continuity plan.
Here are 4 top disruptions to plan for in 2022:
1. Unrelenting COVID-19 Threat
Experts predict that the pandemic will persist for longer than expected. Even though there is improved awareness, the threat is still high due to the low vaccination rates globally. With the emergence of new strains of the virus, the latest being the Omicron variant and higher caseloads in industrialized countries, there is no sign that the situation may improve in 2022.
Reports indicate that the new strains are more transmissible and resistant to treatments and vaccines. With a highly dysfunctional US health system, as observed at the height of COVID-19, there is uncertainty about how the situation will be in the coming year. There is also uncertainty concerning the vaccines’ effectiveness in dealing with emergent variants.
Even though we may not witness new lock-downs and stay-at-home orders, the disruptions caused by the pandemic will persist due to restricted movements and delayed return-to-work by employees. However, the interference may not be as severe as previously witnessed. This is because most foreign trade partners have recorded a significant number of vaccinations and may not need to go on lock-down.
It is advisable to imagine the worst-case scenario as you lay out your business continuity plans for 2022. It is better to be over-prepared for COVID-19 disruptions than be caught flat-footed when the interferences with business continuity scenarios soar.
2. Supply Chain Disruptions
Several factors have affected supply chain logistics. There has been a labor shortage in key sectors such as manufacturing and shipping. The lock-downs and movement restrictions saw most people stay at home. The situation has not normalized globally, and experts predict it may persist in 2022 or worsen due to several factors.
There is a swell in the number of young workers as aged, skilled, and experienced workers opt to retire due to the threat of the COVID-19 pandemic. With the young, inexperienced workforce, there is a gap in skills. Most technical colleges have not been in operation since the onset of the pandemic so there are no new graduates with the technical skills companies need.
This may affect the quality of goods and services on offer. For instance, in the shipping sector, the young truck drivers with young families may not commit as much time as the aged ones. This means shipping companies need additional drivers. Young truck drivers are also more likely to cause accidents than experienced ones.
If there are no additional drivers to hire, the companies reduce the goods they haul in their trucks. In the end, this affects the volumes of goods in supply and the time it takes to receive those goods. As you plan for the coming year, expect a shortage or delay in the shipment of critical goods.
The shortage of raw materials may affect the supply chain. Most manufacturers rely on shipping companies to haul their raw materials. A slowdown in the shipment sector means a delay in the manufacturing and shipment of finished products.
The supply chain will be affected further by deglobalization, with economies opting to meet the demands of their local markets before shipping abroad. The economic wars between China and the US may endure and affect the supply of goods in 2022.
3. Increased Cyber Threats
The pandemic saw a spike in online businesses and increased technology-based transactions. Projections show there may be heightened cyber threats. Hackers may target companies depending on technology to connect with their remote teams.
In 2022, cybercriminal activities may swell, targeting companies using outdated cybersecurity tools that are inadequate in protecting their systems. As businesses suffer cash crunch owing to the hard economic times occasioned by the pandemic and the current inflation, they may lag in upgrading their cybersecurity barriers, exposing them to cyber attacks.
Besides, as workers return to work, they may unknowingly expose businesses to cyberattacks. Remote workers were inadequately trained on cybersecurity since companies were unprepared for work-from-home arrangements. As they bring the gadgets they were using at home to the office, the machines may introduce malware that may upset your business continuity scenarios.
Cybercriminals are targeting company data to use it to demand ransom payments. This is likely to augment in 2022 as more criminals join in the crime. Although Biden’s administration has shown a commitment to fighting cyber crimes, countries suspected of hosting these criminals may not cooperate due to icy diplomatic relations between them and the USA.
You may also not rule out insider threats, that is, workers colluding with cybercriminals to compromise your systems for monetary gains. In the recent past, hackers have increased the use of stolen data to extort money from businesses. As these practices become lucrative, hackers may lure your employees to the crime for a share of the paid ransom windfall.
4. Labor Shortage and a Demand for Higher Wages
The skilled, experienced, and aged labor force has opted to retire to keep safe from the CoronaVirus health threats. Most businesses laid off their workers, and as the economy opens up, they are looking for people to hire. There is stiff competition for the limited talent pool, especially those with critical skills.
The shortage in labor will see the demand for higher wages increase. This will raise the cost of labor as the workers also need better working conditions to safeguard their health.
To retain older, skilled employees, you may need to offer them premium packages. That may lead to increased wages for unskilled workers as well as you try to bridge the wage gap among your employees.
Companies may pay higher for health insurance to attract top talent. You may also experience higher employee turnover rates as you compete for dwindling talent.
Tight immigration policies will further affect the supply of labor. Considering technical colleges’ training programs were disrupted, the number of skilled graduates on the market is diminishing. Plan to spend more to train your workers on industry-specific skills after hiring them.
Want to learn more about Business Continuity?
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You’ll learn what it is, why it’s important to your organization, how to develop a business continuity program, how to establish roles & responsibilities for your program, how to get buy-in from your executives, how to execute your Business Impact Analysis (BIA) and Business Continuity Plans, and how to integrate with your Crisis Management strategy.
We’ll also provide some perspectives on how to get help with your program and where to go to learn more about Business Continuity.
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In our experience, organizations with a strong business continuity & crisis management program have weathered the storm and protected their business throughout the turmoil of the past two years. We can help your organization ensure you have that right program in place for the coming year.