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LABJ Insider: Experts Weigh In on the Economic Future

 

The Los Angeles Business Journal hosted its first discussion of the new year on economic trends on Feb 2. The panel of regional experts shared their insights on the biggest financial headlines affecting the current business climate and explored where the market is heading in 2022.

How the Covid-19 pandemic has affected all aspects business was an overarching theme, and the panel brought their perspectives on everything from employment to construction. Kicking off the discussion was an analysis of how the Great Resignation has changed the employment environment.

“A lot of people were stuck at home, and it gave them a lot of time for reflection and introspection,” said Peter Strotz, managing partner at downtown-based King & Spalding. “It caused people to think that maybe a change in is appropriate now.”

Moreover, it has caused employers to rethink how to recruit and retain talent in order to appeal to people who have joined the Big Quit for different reasons. Those who left a job for better pay or a more inclusive office culture have different needs than someone who is pursuing an entirely new career because the timing finally seems right.

Branden Grimmett, associate provost, career and professional development at Loyola Marymount University, explained that recent graduates are focused on what they perceive to be “pandemic-proof” industries such as pharmaceuticals, ecommerce, construction, digital services and real estate.

“They want their future employer to take inclusion very seriously, to make it easier to show up to their jobs as their authentic selves,” he said. “Companies should think about sharing their polices around diversion, equity and inclusivity up front with early talent they are recruiting.”

And in this new environment, automation will also play a key role.

“The reality is that we should expect businesses to operate in a much leaner employment environment where they have to cut back on certain services, automate other services, and use things like QR codes for menus and payments rather than using people to provide these things,” said Leo Feler, senior economist, UCLA Anderson School of Management. “They will use things like self-check-ins and to the extent possible shift a lot of these unnecessary tasks to automation. They will have fewer human beings in the workforce, so they will do the tasks that are really core and pivotal that only human beings can do.”

Coping with uncertainty associated with so much change at one time also is giving way to building better operating models, however.

Kamran Paydar, and L.A.-based first vice president at CBRE, addressed the shift in building and construction.

“Developers are actively seeking quality sites,” he said. “The big takeaway for L.A. is that we’re in a supply-constrained market. Politically it is quite challenging to get a project approved and built, so it challenging to bring the units to market. Over the next four or five years, L.A. will be trending at about 1% of existing inventory in terms of new unit deliveries. The rents have brought the developers their equity partners back, and even though construction costs spiked significantly, the rents are catching up, so we should see that activity resume and be more on its historical trend.”

In the meantime, the more companies and employees embrace change, the more likely it seems they’ll be able to hit a new groove.

Paola Mendez
Paola Mendez
Paola Mendez graduated from Los Angeles Valley College, then transferred to University of California, and now serves as a Receptionist and Office Assistant to the Los Angeles Business Journal. Paola wears many hats in different departments and is trilingual in English, Spanish and French.
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