CIPD ACE 2022: how to manage in these extraordinary times

The CIPD’s annual conference welcomed ITV journalist Robert Peston to talk about what business leaders and HR need to know to be able to adapt to today’s state of permacrisis and geopolitical shifts.

Ruth Holmes

9 November 2022

Turning the tables, CIPD CEO Peter Cheese interviewed award-winning journalist, Robert Peston, on the opening day of the annual conference and exhibition about the challenges facing business and HR today.The fascinating conversation held key insights for the people profession, ranging from an explanation of the impact of the mini budget on the UK’s economic outlook, the role of trust, and likely inflation rates in the next two years.It reinforced the role of HR and global mobility expertise in rising to the ongoing challenges and delivering the people and ESG strategies critical to business today.

Extraordinary times the norm

“We are all in extraordinary times with all these moving parts,’ said Robert Peston. “What does it mean for us?”“For me, this has been the most chaotic period professionally. Globally, we’ve seen the invasion of Ukraine by Putin and considerable concern about China and Taiwan, as well as the end of the era of free money and return to era of inflation and interest rates.“Returning to the UK scene, the chaos we are experiencing is genuinely like nothing I have lived through. Three prime ministers in four months. Then Kwasi Kwarteng resigned as Chancellor after 38 days. Just last night I was reporting how Gavin Williamson had resigned after 15 days. These are new concepts we have to come to terms with.”

On globalisation

Explaining the economic background to the changes, Robert Peston traced the origins of the current crises to predict the years ahead, with some interesting insights for global mobility, international business and the movement of skilled and talented people.“Globalisation has not gone, but there are some countervailing trends,” said Robert Peston. “Covid showed how risky supply chains are and that has kind of stuck and forced countries to think more about onshoring. What is happening now in Ukraine showed us vulnerability when it comes to a bad actor like Russia.“The rise in inequalities has been more pronounced during this phase of globalisation. Inequalities within countries like ours have got a lot worse and given all of us pause for thought. But of course, that offshoring has narrowed inequalities between countries, like with China."These factors underline the importance of inclusion and diversity in business and public services, as well as the success of initiatives like the levelling up agenda. On these global and macroeconomic trends, Robert Peston remains hopeful.“Over time this could mean more and better jobs in UK and that’s what we hope. The more worrying phenomenon is that this drives up prices in the short run."This unwinding of globalisation is one of the significant forces behind end of the era of cheap money.”

On trust

Robert Peston also highlighted the longstanding issue of declining trust that has dogged leaders over the past decade.Remarking on a world map that showed political condemnation or support for Russia’s invasion of Ukraine earlier this year by country, he pointed out that the map aligns to support 50 years ago.“It’s certainly the case there’s been an enormous amount of naivety around China and Vladimir Putin early among officials, security services and business leaders,” said Robert Peston.“All will admit they got him [Vladimir Putin] wrong and didn’t recognise his imperial ambitions. NATO was so unprepared for [the invasion of Ukraine] but got its response together quickly despite its degradation. It showed the West can still act together in a way that increases our security.“There was also lots of naivety about China. We thought the richer it got, the more it would move to be a more liberal society. For now, this is utterly wrong. President Xi has consolidated the most personal power since Mao and there is oppression. But we are massively interdependent so a rupture would be significant."Be under no illusion that lots of people have paid massively for this situation. But economic conflict would be multiples of that. Also, for China that would be significant.“The great mistake of western governments over last 20 years is they did not take risk of long-tail risks seriously – like the banking collapse and a global virus – until it was on us.”

Where next? A route out of crisis

Yet out of crisis, hope is possible. That means adapting business models and having a clear sense of purpose and where you are going, whether you are a politician, business leader, business or country.The role of purpose, it seems, is the one constant throughout this economic and political volatility.“Instability is going to be with us for some time,” said Robert Peston. “We see that across the world through economic transition to no to high inflation. What is really interesting about institutions that succeed is that they know who they are.“Football is an interesting model. The most interesting is Liverpool FC. It has survived over decades because of its incredible sense of identity. The thing that has gone wrong that is pernicious is when institutions lose sense of who they are and what has worked in the past. We have seen that degrading of institutions and it’s really important we reverse that.”For businesses, this means being transparent and saying loudly “when something any party wants or any government doing is directly damaging their interests,” said Robert Peston. “This is not the same thing as getting involved in party politics. Climate change is real and a massive driving force for change in our lives. Businesses are getting constructively involved in issues-driven where they have authority.“I do think that all of us – individuals or corporate actors – we have a responsibility to have our voice heard on these issues that are vital to our futures. We have to stand up and be counted in this way.”

The future – impact on people practices and global mobility

For now, Robert Peston expects inflation to remain at slightly higher levels than the Bank of England currently estimates before reverting in a couple of years to “four or five per cent.” He also expects dislocations to supply chains are "going to go on for longer than people currently think.” Yet, “there will still be very significant demand for our goods and services,” concluded Robert Peston. “If there was a massive escalation in Ukraine then things become a lot more worrying and that will be a shock to the economy. But this is not going to be like a deep recession and will feel like we are bumping along with no growth."We are a big economy, and we always get through difficult times and get to recovery.“The companies that do best are those that invest in difficult times in people, kit and operations. It’s a bit like Liverpool FC. It sees a downturn happening and can see the upturn coming. There’s always an opportunity.”

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