Top 8 Trends of SHRM in the time period of 2020-2021 in RMG

Sector:
2020 was fraught with change, as organizations around the world scrambled to
react to the global COVID-19 pandemic that affected companies large and small
across every industry. If 2020 taught us anything, it‟s that companies that don‟t
transform will get left behind by those that do. This applies to developing a digital
transformation strategy that will stick but, more importantly, extends beyond
technology to tackle people-centric issues.
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Living with the virus: The Covid-19 crisis has impacted the lives and livelihoods
of millions of people, while disrupting international trade, travel, the economy and
consumer behavior. To continue to manage unprecedented levels of uncertainty in
the year ahead, companies should rewire their operating models to enable
flexibility and faster decision-making, and balance speed against discipline in the
pursuit of innovation.

Diminished demand: The global economy is expected to partially recover next

year but economic growth will remain diminished relative to pre-pandemic levels.
Since demand for fashion is also unlikely to bounce back due to restrained
spending power from the rise in unemployment and inequality, it is important for
companies to seize new opportunities and double-down on outperforming
categories, channels and territories.
Global fashion sales in 2021 could be below 2019 levels by as much as 15%.
Digital sprint: Digital adoption has soared during Covid-19, with many brands
finally going online and enthusiasts embracing digital innovations like live
streaming, customer service video chat and social shopping. As online penetration
accelerates and shoppers demand ever-more sophisticated digital interactions,
fashion players must improve the online experience and channel mix while finding
persuasive ways to expand the personal customer experience.
71% of fashion executives expect their online business to grow by 20% or more in
2021.

Seeking justice: With garment workers, sales assistants and other lower-paid
workers impacted the worst during Covid-19, consumers have become more aware
of the plight of vulnerable employees in the fashion value chain. As momentum for
change builds alongside campaigns to end exploitation, consumers will expect
companies to offer more dignity, security and justice to workers throughout the
global industry.
66% of consumers said they would stop or significantly reduce shopping at a brand
if they found it was not treating its employees or supplier employees fairly.

Travel interrupted: The travel retail sector remains severely disrupted and
destination shopping suffered throughout 2020. With international tourism
expected to remain subdued next year and shoppers experiencing further
interruptions to travel, companies will need to engage better with local consumers,
make strategic investments in markets witnessing a stronger recovery and unlock
new opportunities to keep customers shopping.
66% of fashion executives expect travel retail sales to recover to their former
growth levels in two to three years.

Opportunistic investment: Performance polarization in the fashion industry

accelerated during the pandemic as the gap widened between the best-performing
companies and the rest. With some players already bankrupt and others kept afloat
by government subsidies, M&A activity is expected to increase as companies
maneuvers to take market share, unlock new opportunities and expand capabilities.
45% of fashion executives expect market share redistribution to be a top theme in
2021.
Deeper partnerships: By exposing the vulnerability of procurement partners, the
weakness of contracts and the risks of a concentrated supplier footprint, the crisis
accelerated many of the changes that companies were already making to rebalance
their supply chain. To mitigate future ruptures, fashion players should move away
from transactional relationships in favor of deeper partnerships that bring greater
agility and accountability.
35% of fashion executives expect resilience and partnerships in the supply chain to
be a top theme in 2021.

Work revolution: Prompted by fundamental changes in the way companies

worked during Covid-19 and the need to drive performance in the years to come,
an enduring new model for work is likely to emerge. Companies should therefore
refine their blends of remote and on-premises work, invest in reskilling talent and
instill a greater sense of shared purpose and belonging for employees.
88% of fashion executives expect a hybrid model of working to be part of the new
normal.

Challenges of Strategic HRM in the time period of 2020-2021 in

RMG Industry:

Slowdown in export: The second wave of Covid-19 has already forced us to

experience its severity as it crippled the western world. Cities in Europe and the
USA, which are the major markets of our clothing, are either under lockdown or
state of emergency. Export has been on a falling trend once again during October –
December 2020, after a slight recovery in August and September 2020.
Figure 2: RMG factories need wage support so they can support their workers

Changing buying behavior and underutilization of capacity: With the detection

of the new strain of the virus and retail sales growth in both the USA and EU been
on a declining trend (i.e., -16% in November and -13% in October 2020
respectively), the situation has further aggravated at the buying end.Though we
don‟t have an inclusive picture over the real-time „cancellation‟ scenario in the
industry and non-payments, but a survey on 50 factories shows that instead of
cancellation buyers are following a „go slow‟ approach in placing new orders and
factories reported 30% less order, which is the picture industry-wide and getting
worse day by day.
Unprecedented decline in price: While the price decline has already been a trend
in the global market for decades, the COVID-19-led disruption has further
escalated the situation. We have lost 2.87%-unit value in 2020, and during
September-December the decline was recorded at 4.82%. Given the scenario of
underutilization of capacity which already spurred cost and increased cost of
compliance especially to maintain health and safety at factories, such a scenario is
unsustainable.

Financial vulnerability and support needed to reconstruct the industry: This is

important to note the differences between the impact of the first wave and the
second wave of COVID-19. With a slight pause, the recurrence of COVID has
appeared as „decapitating the already dead‟. Injured by the first wave the industry
was already bleeding and left to such a disrupted and weakest position that severity
of a fraction of the magnitude of the first wave may be more intense.

Conclusion:

The impact of COVID-19 has just started to unfold and will evolve fast. The full
impact will be more visible in the next few months or beyond. In order to mitigate
the impending economic and potential social crisis, it is needed to stay ahead of the
curve and get ready with appropriate emergency assistance and post-crisis
assistance in different forms as appropriate. It may be needed to sequence ADB‟s
sovereign and no sovereign operations for better effectiveness and sustainability in
a risk-measured manner. Obviously, the impact of COVID-19 extends well beyond
the RMG industry to other economic sectors. Assistance to the RMG industry,
which is the largest contributor to urban poverty reduction, may help other
associated sectors in the supply chain and normalize the economy significantly and
faster.