Public services

How would you describe the impact of COVID-19 on your business?

Survey highlights

Eighty-five percent of respondents in this industry were from North America or EMEA, 5% were from APAC and 10% were from LATAM. More than half (55%) of respondents said they were in the recovery phase — slightly higher than the average. Three-quarters (75%) of respondents didn’t consider pandemic a key risk prior to COVID-19. However, a higher proportion of respondents in public services versus other industries said they had a pandemic plan in place prior to the event. Seventy-five percent of respondents said that they had seen an impact in their organization because of the pandemic. Of these, 25% are unsure of the potential long-term impact. Eighty-two percent of respondents expect the impact to last for at least one year. Sixty-two percent agreed that the risk management response of their organization was sufficient but that more planning would have benefited the organization.

Industry insights

Public services entities bore much of the cost of the world’s COVID-19 response. And at the same time, unemployment continues to rise, creating uncertainty around revenues generated through taxation for the year. In many parts of the world, public services organizations are mandated to have balanced budgets, so it’s unsurprising that respondents ranked cost management high in the list of reshaping priorities, and ahead of the overall survey sample. One response to the pandemic has been to look at business process re-engineering — retooling how services are provided and making big efforts to keep people employed by moving them into pandemic-related jobs. This has triggered a shift in how funding is disbursed. In the U.S. this meant a redeployment of federal funds. Respondents agreed that workforce planning is a high priority. In 2021 we can expect to see public services entities look at revaluing pension costs, addressing the talent gap and emphasizing employment benefits to younger employees. New use of technology is at the heart of the industry’s revenue strategy, as it seeks to meet the transition to urbanization, smart cities and the possibility of providing services at a reduced cost. The use of AI and the adoption of digital strategies will also help to address the deficit in infrastructure investment seen in many major economies — but will also subject public services organizations to increased cyberthreats from individuals, criminal organizations and state actors.

Proportion of organizations facing supply chain issues

The public sector was the only industry that ranked another health crisis at the top of the list of significant future shocks. Public sector entities were at the forefront of the pandemic response, and some were ill prepared. As government responses to COVID-19 became increasingly politicized, the provision of essential front-line services grew even more challenging. It is not surprising that the industry fears another crisis of this type. Climate change also features highly in the list of shocks. In the U.S., hurricanes, flooding and other natural disasters scare the public sector and can worsen existing infrastructure issues, creating both financial and social pressures.

Future shocks

  1. Another health crisis/pandemic
  2. Economic disruption
  3. Technological disruption
  4. Climate change
  5. A major cyber event