Lubricant industry working toward a post-COVID-19 world
Ken Pelczarski | TLT Career Coach September 2020
Professional expectations are unknown for the future until certain questions are answered.
The nightmare continues. When will COVID-19 finally be behind us? We are all eager to learn the answer to this question and in many ways are in a state of limbo until this happens.
As I finished this article in early July, there were 11.9 million individual cases of the virus worldwide (3 million in the U.S.) causing 545,000 deaths worldwide (132,000 in the U.S.) and many more illnesses and hospitalizations.
People throughout the country and the entire world are becoming increasingly frustrated with the negative impact the COVID-19 pandemic is having on their lives. Individuals cannot easily plan for things such as vacations, family gatherings, weddings, special events and financial investments.
Below are many key questions on the minds of most individuals and employers for which nobody has answers:
•
When will reliable drug treatments for coronavirus be developed?
•
How soon will an effective vaccine be available?
•
Will we have “herd immunity” at some point?
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Will there be a second major wave of coronavirus cases?
•
How soon will the economy fully recover?
•
What will my company’s revenue and profitability be in 2020?
•
How safe is air travel?
•
What are the best ways to keep employees safe and happy?
Employers make decisions based upon as much information as they can acquire. Unfortunately, little concrete information is available for the questions listed above. The bottom line is that employers cannot easily set goals and strategies in the face of COVID-19. Many questions need to be answered to enable employers to effectively plan in such areas as capital spending, new product launches, product promotions, hiring and acquisitions.
This article is based upon a survey of lubricant industry leaders. This survey inquires about how they view a post-COVID-19 business world, their expectations over the next 18 months and what kinds of decisions they are making during this time. My
1 also was based upon a survey of industry leaders and examined the current impact of COVID-19 being felt by the lubricant industry.
I recently surveyed over 500 lubricant industry professionals at leadership levels in all types of functions and received 37 responses. I want to thank every person who responded to this anonymous survey. My hope is that information from this survey will shed light on the difficulty that lubricant industry leaders are having in planning for the future because of uncertainty surrounding the COVID-19 pandemic.
In my survey, I asked 20 questions of which 19 were multiple choice. Most questions were specific in referring to an individual’s current employer, although some questions allowed for answers about the lubricant industry in general. Comments from respondents were encouraged where answers needed clarification or elaboration.
Below are the 20 survey questions along with respondent answers, comments and a data summary.
1. What type of company are you employed by?
a)
Lubricant manufacturer (24)
b)
Chemical manufacturer (non-lubricants) (4)
c)
Additive manufacturer (4)
d)
Distributor (3)
e)
Equipment or component manufacturer (0)
f)
Lubricant and/or oil industry services (3)
g)
Lubricant and/or chemical end user (1)
h)
Academic institution (0)
i)
Consulting firm (2)
j)
Retired (0)
k)
Unemployed (0)
Data summary: Lubricant manufacturers (24) comprised the vast majority (59%) of survey respondents. No other category of respondents totaled more than four.
2. What size company are you employed by?
a)
Under 10 employees (3)
b)
10-49 employees (11)
c)
50-99 employees (3)
d)
100+ employees (20)
Data summary: Twenty of 37 respondents (54%) work for companies that employ more than 100 people. Smaller companies also were well-represented, especially those respondents (11 of 37, 30%) with 10-49 employees.
3. Which of the following best describes your current or most recent position?
a)
Company owner (2)
b)
Upper management (14)
c)
Middle management (6)
d)
Senior-level industry professional (non-management) (2)
e)
Technical professional (10)
f)
Sales or marketing professional (5)
g)
Human resources (0)
h)
Academic professional (0)
i)
Consultant (2)
Data summary: Twenty-two of 41 respondents (54%) were key decision makers as either company owners or middle- to upper-level managers. All other respondents were either sales, marketing or technical professionals with varying levels of decision-making authority.
4. When do you forecast company revenue to return to pre-COVID-19 levels?
a)
By the end of 2020 (7)
b)
The first half of 2021 (20)
c)
The second half of 2021 or later (7)
d)
We have maintained or increased revenue during COVID-19 (2)
Respondent comments
•
To be completely fair, there is a presidential election this November, which will have an impact. Further, protests, riots and looting, etc., also are playing a role in the economy and people’s optimism and willingness to spend.
•
This is an expectation for the industry at large, not my firm. This was established through discussions with many people in the industry, recently published articles and my opinion based on my experience and understanding of the economy.
•
By the end of 2020, unless there is a resurgence due to irresponsible behavior.
•
The overall global economy will be impacted by COVID-19 until widely available vaccinations are available.
•
I am afraid to guess.
•
We project the third and fourth quarters to be recovery periods.
Data summary: Twenty of 36 respondents (56%) are not optimistic about a return to pre-COVID-19 company revenue but, instead, look at the first half of 2021 as the best chance of a return to revenue norms.
5. How has COVID-19 changed emergency planning at your company?
a)
We had a sufficient emergency plan before COVID-19. (2)
b)
We have improved our previous emergency plan due to COVID-19. (24)
c)
We had no official emergency plan but now have one for the future. (3)
d)
There is no official emergency plan in the works. (6)
Respondent comments
•
Emergency planning is ever evolving. What is an issue today might not be tomorrow. Was sickness an emergency in the past? Not really. It is not so clear that you need to try to stay in front of evolving trends.
•
Much I have read and many I have spoken with have referenced how their plan got updated/improved in the first few weeks of March.
Data summary: A large majority of companies, 26 of 35 respondents (74%), had an official emergency plan in place before the pandemic. Twenty-four of these 26 companies believed it was important because of COVID-19 to improve their existing emergency plan.
6. What restrictions do you expect to be in place at the start of 2021 for visitors to your company facility? (Select all that apply.)
a)
Wearing a face mask (25)
b)
Social distancing (27)
c)
Temperature taking (21)
d)
Using hand sanitizer (27)
e)
No handshaking (28)
f)
COVID-19 screening questions upon entry (21)
Note: Two respondents answered “none.”
Respondent comments
•
Probably no restrictions by early 2021.
•
No business travel or visitors right now.
•
Unknown. Not sure what the requirements will be in 2021.
•
I suspect our restrictions will mirror those that exist in society until there is a vaccine.
•
I do not expect any restrictions to be in place. A screening questionnaire is available now but is not being utilized.
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I am not sure.
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It depends upon what country or region.
•
These are fluid and might change. We currently do not allow any outside visitors into our facilities and have not begun phasing in this next step.
Data summary: Each of the six restrictions on company visitors were mentioned by between 21 and 28 respondents (60%-80%). This indicates that cautious action is expected to be taken by most companies at the start of 2021.
7. How likely is it that employees at your company will be required to wear face masks indoors at the start of 2021?
a)
Extremely likely (11)
b)
Likely (6)
c)
Somewhat likely (13)
d)
Not at all likely (7)
Respondent comments
•
I think it kind of depends on the winter flu season.
•
Masks will be worn in indoor common areas such as outside offices and in hallways. No face masks in labs or small meetings but social distancing in those environments.
•
Until an effective vaccine is developed and has been administered to the general population, I do not see an end to the restrictions that we put in place.
•
We have the ability to social distance indoors.
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Unless the government forces us to wear masks, we will leave it up to individual choice.
•
We have discussed optional masks but not mandatory. So far, we have been lucky with no employees coming down with COVID-19. Our attitude could change if/when that happens.
•
We are in a large office building. People will likely need masks in elevators and the lobby, not our office space.
•
It depends on what task they are doing.
Data summary: Responses were divided almost equally with this question, although 30 of 37 respondents (81%) believe it is at least somewhat likely that face masks will be required at their companies in early 2021.
8. Will your employer be making physical modifications to facilities for social distancing purposes?
a)
We have made or will be making permanent major changes to the layout of facilities. (1)
b)
We have made or will be making permanent minor changes to the layout of facilities. (10)
c)
We have made temporary changes to the layout of facilities. (13)
d)
We do not plan on any changes. (10)
Respondent comments
•
Modifications to work schedules is allowing for social distancing.
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Our layout has not changed, but department interactions have been changed.
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At this moment it is temporary, but the situation might change to permanent.
•
We have plenty of space between people. Everyone is working at home today and the office is large enough for 10 people.
Data summary: Twenty-three of 34 respondents (68%) have made either temporary changes to the layout of facilities or permanent minor changes to better accomplish social distancing. Ten of 34 respondents (29%) do not plan on any changes.
9. What air travel restrictions do you expect to be in place for employees through the end of 2020 as the economy reopens and coronavirus cases diminish?
a)
Air travel for emergency situations only (8)
b)
Air travel strictly for essential business that cannot be conducted virtually (18)
c)
Air travel allowed for most important business meetings (8)
d)
No restrictions other than those that existed pre-COVID-19 (2)
Respondent comments
•
Air travel is being allowed strictly for essential business. I have been told this by more than 90% of people I have spoken with.
•
At the current time, it is up to the individual traveling.
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We are asked to disclose any international travel, but it is understood that “don’t ask, don’t tell” is the norm. The owners have not provided any guidance of substance.
Data summary: Twenty-six of 36 respondents (72%) stated that air travel is expected to be restricted by their employer through the end of 2020 for only emergency situations or for essential business that cannot be conducted virtually. This indicates that most employers are exhibiting extreme caution and attempting to minimize employee health risks through strong limitations on air travel.
10. How soon will sales and customer support professionals be allowed to visit customers in person (assuming the customer allows the visit)?
a)
We are already visiting customers in person (air travel included). (7)
b)
We are already visiting customers in person (driving situations only). (13)
c)
This is likely by the end of 2020. (10)
d)
Perhaps not until 2021 depending upon the level of coronavirus cases. (7)
Respondent comments
•
Most employers are already visiting customers in person for driving situations only. I have been told this by many industry professionals.
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Depends on where the travel takes us.
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Many customers are not receiving supplier visits. In-person meetings are allowed but not preferred.
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Nearly all customers are within driving distance.
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Depends on directives from the country and region.
Data summary: Only seven of 37 respondents (19%) stated they are visiting customers in person by air travel. Another 13 of 37 respondents (35%) are visiting customers in person in driving situations only. Somewhat surprisingly, 17 of 37 respondents (46%) are playing it cautiously and do not expect to visit customers in person until later this year or into 2021.
11. How soon do you believe most non-virtual industry meetings and conferences involving large groups of people will resume?
a)
Some of these meetings are already taking place (1)
b)
By the end of 2020 (10)
c)
By the first half of 2021 (15)
d)
The second half of 2021 or later (11)
Respondent comments
•
By the end of 2020, but how many will attend?
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First half of 2021 is the best guess for ASTM meetings—earlier if a vaccine is developed.
•
People need to be vaccinated before large conferences can occur or at least for us to participate in them.
•
The ILMA Annual Meeting is scheduled for the end of October.
•
ILMA appears to still be on the schedule for October. I have not heard any rumors that this will be cancelled, although news stories like the Trump Rally in Tulsa, where organizers have already tested positive for it, might change things.
•
Depends on a vaccine.
Data summary: Twenty-six of 37 respondents (70%) believe that meetings and conferences involving large groups will not take place until at least some time in 2021. This is not an optimistic view about the lingering coronavirus.
12. Will virtual business meetings (both internal and with customers) become more prevalent in the lubricant industry due to learning experiences during COVID-19?
a)
Both internal and external virtual meetings will become more prevalent. (26)
b)
Internal virtual meetings will especially become more prevalent. (6)
c)
External virtual meetings with customers will especially become more prevalent. (3)
d)
Nothing beats a face-to-face meeting whenever possible, so this type of meeting will remain the norm. (6)
Respondent comments
•
Both a and d are true, and there is room for both. The world has changed, and virtual meetings will play a role in the future, but it does not replace live meetings at the right moment.
•
I answered a, but nothing will ever beat face to face.
•
Virtual meetings are great for training and product roll outs. However, to make an actual sale as a metalworking fluid supplier, you need to be face to face to understand the application and subtle nuances each operation seems to have.
•
Companies will increase virtual meetings internally as a cost savings measure, but external visits will continue because “nothing beats a face-to-face meeting.”
•
Many people are recognizing the value of virtual meetings as well as the technology to make these meetings productive.
•
Nothing beats face to face. Unfortunately, I think that people are so scared that it might be a long time for it to become the norm again.
•
Our company has been pleasantly surprised how well we have been able to do meetings with those officing at home as well as our vendors. Top management has liked the cost savings.
•
External virtual meetings might increase because they have been introduced and are easy to navigate. Some companies might encourage them because of cost savings. That being said, my vendors seem anxious for face-to-face meetings because they enjoy that type of interaction.
•
Customers visited four times per year asked already for two virtual conferences and two in-person visits.
Data summary: Twenty-six of 41 respondents (63%) believe that virtual meetings will become more prevalent both internally as well as externally with customers.
13. Will your employer be promoting virtual learning opportunities for employees because of experiences during COVID-19?
a)
We have always encouraged and supported online education and will continue. (22)
b)
We believe in benefits of online education and will increase support for virtual learning based upon recent positive experiences. (11)
c)
We have not actively encouraged online education in the past but will now do so. (1)
d)
We encourage other forms of learning and will not be increasing support for online education. (3)
Respondent comments
•
Most of our training was online prior to COVID-19.
•
We have provided a series of online webinars for our sales consultants during the pandemic.
•
To the best of my knowledge, I am the only employee that engages in virtual learning. I have included my lab techs in these activities, as appropriate. I have appreciated the extra opportunities offered by STLE during this time and have taken advantage of them. I believe that I am the only professional society-affiliated person at this company.
•
We do little training for the local staff.
Data summary: An overwhelming number of respondents will be encouraging their employees to engage in online learning (33 of 37, 89%). Eleven of 37 respondents (30%) of respondents will be increasing support for virtual learning activities because of recent positive experiences during COVID-19.
14. Will your employer be increasing the number of remote workers due to COVID-19 experiences?
a)
We will maintain or increase an already high level of remote workers. (11)
b)
We will greatly increase the number of remote workers. (7)
c)
We have changed or will be changing our unwritten policy of “no remote employees.” (3)
d)
We will continue to limit the number of remote workers because of difficulties in managing this type of employee. (14)
Respondent comments
•
I do not think any of these choices apply. Basically, we are becoming more aware that there are times remote work is more productive and satisfying for employees. We should not ignore this learning.
•
I am not sure how to answer this question. We do not prohibit working from home. However, many of our employees need to be physically present to perform their jobs— production, laboratory, shipping, receiving, etc.
•
We will continue to limit the number of remote workers because of difficulties in managing this type of “business,” not employee.
•
Many job roles can be done remotely. The five-day in-office work schedule is not needed for the bulk of our employees.
•
As a testing lab and blending facility, we do not have much opportunity for remote work.
•
Only one person has started working remotely for a few days per week since the pandemic started. Sales people and the CEO worked remotely before the pandemic. I imagine this will continue after the pandemic ends.
•
We will see a slight increase in remote workers.
•
We have always had a mixture of remote and office employees and have shifted some of the functions to part-time remote working. Several of our positions require the workers to be in the plant to run it and the lab to support the plants and our customers. I do not see much change resulting from COVID-19.
•
Everyone is working at home now. Probably no one will work at home at some point in the future.
Data summary: Opinions of respondents varied greatly regarding the use of remote workers. Fourteen of 35 respondents (40%) will continue to limit the number of remote workers because of difficulty in managing these employees. On the other hand, 11 of 35 respondents (31%) plan to continue utilizing a high level of remote workers. COVID-19 did change the plans of 10 of 35 respondents (29%) who plan to either greatly increase the number of remote workers or begin to employ remote workers.
15. What do you see as the primary advantages of having remote workers? (Select all that apply.)
a)
Employee satisfaction (25)
b)
Employee motivation (16)
c)
Higher productivity (21)
d)
Reduced absenteeism and turnover (15)
e)
Healthier and less stressed employees (21)
f)
More focus on work tasks (18)
g)
More economical (20)
h)
Greater efficiency (20)
i)
No office distractions (21)
j)
No commuting time (24)
k)
All of the above (12)
Note: The number of a through j selections includes the (12) k (All of the above) responses. Also, two respondents answered “none.”
Respondent comments
•
Not all employees like it, however.
•
Remote work is for sales force, not plant personnel.
•
None of the above. The ability to remote work is a question of commitment and discipline. Some highly effective workers are just not capable of disciplining themselves to work from home. This is the biggest drawback/complaint I hear from remote workers and employers.
•
In pre-COVID-19 times, I did not see any advantages to remote workers in most situations. COVID-19 has changed the landscape.
•
We have one individual that now works remotely (a few days a week). This individual has a strong work ethic and is enjoying being away from a rather toxic environment.
•
This is depending on the person, but above advantages apply to most employees.
•
All of the above are possible advantages.
Data summary: There appears to be many employers who see numerous advantages to having remote workers. Twelve of 34 respondents (35%) selected all 10 choices as advantages, while all possible selections were chosen by between 15 and 25 respondents (44%-74%).
16. What do you see as the primary disadvantages of having remote workers? (Select all that apply.)
a)
Lack of information technology training (6)
b)
Communication (19)
c)
Low employee morale (8)
d)
Reduced employee motivation (9)
e)
Less teamwork (20)
f)
Less productivity (13)
g)
Home distractions (25)
h)
Difficult to monitor work tasks (12)
i)
All of the above (4)
j)
No significant disadvantages (5)
Note: The number of a through h selections includes the (4) i (All of the above) responses.
Respondent comments
•
Some functions like lab work just cannot be done remotely.
•
Not everyone is able to separate their home affairs and work when working from a remote location. I find that a large number have that difficulty.
•
There is some overall productivity loss from exclusive work from home schedules.
•
Communication and less teamwork are the only disadvantages that apply to our situation. They have been relatively easy to work through, however.
Data summary: All eight possible disadvantages of remote workers were mentioned by a good number of respondents. The three disadvantages that were mentioned significantly more than the other five disadvantages were home distractions by 25 of 36 respondents (69%), less teamwork by 20 of 36 respondents (56%), and communication by 19 of 36 respondents (53%).
17. How soon does your company expect to increase employee headcount through new hiring?
a)
By the end of 2020 (4)
b)
The first half of 2021 (7)
c)
The second half of 2021 or later (3)
d)
We are already hiring for newly created positions. (2)
e)
We anticipate hiring only for essential replacements in the foreseeable future. (19)
Respondent comments
•
We are currently looking at staff reductions.
•
We have never hired a new employee since opening. No turnover. We do not plan to add staff.
Data summary: The responses to this question were not surprising as 19 of 35 respondents (54%) anticipate hiring in the foreseeable future strictly for essential replacements. Only two of 35 respondents (6%) are already hiring for newly created positions, and only four of 35 respondents (11%) plan to add to employee headcount by the end of 2020.
18. What new actions are likely to be necessary at your company later in 2020 if COVID-19 persists or there is a strong second wave? (Select all that apply.)
a)
Our first employee layoffs and/or furloughs during 2020 (4)
b)
Additional employee layoffs and/or furloughs (6)
c)
Our first pay cuts during 2020 (3)
d)
Additional pay cuts (5)
e)
Our first widespread employee re-assignments during 2020 (2)
f)
Additional widespread employee re-assignments (1)
g)
Have already taken some of the above actions but no new actions are expected (4)
h)
Have not taken any of the above actions and do not expect any new actions (18)
Respondent comments
•
I presume you are implying if there is a second serious downturn in demand?
•
Of course, significant decreases in production volumes and sales dollars could change this answer.
•
My company is already planning to reduce headcount.
•
I have not been provided any information regarding this from the company owners.
Data summary: This survey indicates that most employers have not implemented layoffs, furloughs, pay cuts or widespread employee re-assignments due to COVID-19 and do not expect to take any of these actions even if there is a strong second wave of coronavirus cases. Eighteen of 43 selections by respondents (42%) were in this category. This is somewhat encouraging because employers appear to be doing everything possible to maintain status quo and take care of their employees. At the same time, this is discouraging because most employers are not able to move forward and take big steps toward growth.
19. How optimistic are you about the “new normal” for the lubricant industry after COVID-19 is behind us?
a)
Greatly optimistic (7)
b)
Somewhat optimistic (15)
c)
Not sure but hopeful (13)
d)
Not optimistic (1)
Respondent comments
•
It is going to take quite some time to fully recover and recoup the progress that was being made in the economy.
•
It seems like we are feeling more normal with our changes to increase sanitization and social distancing.
Data summary: Answers to this question confirm that most employers do not feel strongly either positive or negative. Most respondents (28 of 36, 78%) selected the middle two choices, indicating they are quite unsure but trying to be optimistic about the “new normal” for the post-COVID-19 lubricant industry.
20. Do you expect any other major changes or impact post-COVID-19 with your employer or the lubricant industry in general?
Respondent comments
•
I think many companies will have more remote workers and split time between the office and home. There will likely be less sales calls at least for the coming year or two.
•
I think public transit will suffer, but personal transport will do reasonably well. This will translate into many things like the resuburbanization of big city life.
•
We expect that a reliable antibody test will be available by the end of 2020 that will predict immunity to COVID-19. Such test could be documented in the form of an immunity card for employees good until next test date.
•
Demand has been substantially curtailed because of the quarantine.
•
It always seems to take between five to 15 “touches” before someone returns a call or accepts a visit. Since cold calls are basically over and in-person visits will be limited primarily to existing suppliers for the time being, and with everyone getting tired of general mass emails, new methods and a more regimented process are required to reach new customers. Video conferences will likely play a large role but other methods, including company awareness and brand recognition, will be even more critical moving forward.
•
We should get back to normal as the economy improves. The election will have a big effect on how things go.
•
Only time will tell.
•
Goal is to recover lost business as quickly as possible.
•
The hesitancy to use web-based meeting software has decreased as many companies are using these programs. Future customer visits will first be considered using virtual meetings.
•
Being on the NLGI board, I know that insurance we take out for annual conferences will now include pandemic clauses. I expect our company to consider the same for sales meetings, etc.
•
I do not expect industry and professional meetings to resume until there is a vaccine for COVID-19.
•
I expect we will continue to monitor the situation and adapt as needed. Staring into the great unknown, it is not possible to predict what steps will be necessary to survive and thrive.
•
I do not expect any changes but would not be surprised if virtual communication increases going forward.
•
Impact of moving to electric cars has an enormous impact.
•
Overall, so much is unknown that any expectations are likely to go by the wayside.
•
With virtual meetings becoming the norm, there likely will be less of a demand for lubricants for transportation, especially passenger car vehicles.
•
Probably a little more local production by customers.
•
We have continued to be busy in the testing industry—have had some decrease in revenue but are optimistic for recovery as we continue to do business.
“Unprecedented with great uncertainty and everyone still learning” seems to be the ongoing theme with COVID-19 and is confirmed by survey responses. As the economy reopens, individuals and employers will need to adjust on the fly to the many possible scenarios that could take place in the coming months or years. We could have multiple spikes in coronavirus cases, additional lockdowns, new restrictions and/or states moving back and forth with business openings and closings.
Overall, according to my
July TLT article survey, about 70% of companies have been significantly impacted financially by COVID-19, about 20% are impacted to a much lesser degree and about 10% are weathering the storm and actually increasing revenue.
I can absolutely identify with what many companies are going through during COVID-19. I have managed my own search firm for over 35 years and have never been this concerned about the future of my business. I had a good first quarter this year, a dismal second quarter and now have a highly uncertain third and fourth quarter ahead of me.
I want to wish all employers the best in achieving a financial recovery and longterm stability and growth. The sooner that companies are profitable and increase revenue, the sooner that individual employees will prosper and be happy.
FOR FURTHER READING
1.
Pelczarski, K. (2020), “Lubricant industry feeling the disruptions of COVID-19,” TLT,
76 (7), pp. 60-71. Available
here.
Ken Pelczarski is owner and founder of Pelichem Associates, a Chicago-based search firm established in 1985 and specializing in the lubricants industry. You can reach Ken at (630) 960-1940 or at pelichem@aol.com.