Shifting Expectations Survey: Wave 2
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The second round of our Shifting Expectations survey.
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Shifting Expectations Survey: Wave 2
- 1. The Short and Long-term Implications of COVID-19 on Businesses and the Economy Results from a US Nationwide Survey Shifting Expectations: Wave 2 May 2020
- 2. Research Methodology 2 Dates: March 25th – 30th, 2020 Audience size: 1,209 To qualify for this audience: ✓ Age 18+ ✓ Weighted to represent population This is the second survey in a series of public opinion assessments of the American public as they navigate the Coronavirus pandemic Wave 1 Survey Details Dates: May 12th – 14th, 2020 Audience size: 1,012 To qualify for this audience: ✓ Age 18+ ✓ Weighted to represent population Wave 2 Survey Details
- 3. Summary: Pragmatic Populism 3 There is a strong desire to bring more manufacturing to the U.S. from other countries. There is more of a focus on supply chains. There is a desire for government scrutiny of mergers involving large corporations. At the same time, Americans are: • Keeping a close eye on what companies are doing for their employees. • Tending to trust that CEOs who donate their salaries to their frontline workers are doing so for the right reasons. • Highly rating their own employers’ response to the Coronavirus. But all employers should note the fault lines emerging within companies between on-site employee bases and work-from- home employees.
- 4. The Implications: A Look Back to Wave 1 4 Wave 1 Survey Details Wave 2 Survey Details Close attention being paid to the actions of companies and CEO actions Close attention is STILL being paid to companies and CEO actions, but people tend to trust that CEOs who donate their salaries are doing so for the right reasons Pressure is on public officials to get the US back on track as Americans debate whether the pandemic has uncovered strengths or limitations in the way the federal government managed the situations There is a strong desire to bring more manufacturing to the U.S. from other countries, there is more of a focus on supply chains, and there is a desire for government scrutiny of mergers involving large corporations Changing habits and concerns over finances drive new expectations from business and government Businesses have improved their communications to employees, although the public will continue to expect strong safety measures and transparent communications Industries could become the scapegoats of elected officials in an effort to introduce a more regulated environment Key industries have seen a reputational rally as Americans reflect and rely on their support throughout the crisis
- 6. Perceptions of Key Industries are Changing as a Result of Coronavirus 6 All industries listed have seen a reputational rally, as Americans reflect on their support through the crisis Q: How has your perception of the following industries changed as a result of how they have handled the Coronavirus pandemic? 17% 18% 18% 21% 22% 23% 29% 31% 25% 29% 27% 25% 24% 23% 21% 14% 8% 6% 12% 10% 12% 13% 13% 12% 12% 7% 7% 7% 7% 7% Much More Favorable Somewhat More Favorable No Change - I have a favorable impression No change - I have an unfavorable impression Somewhat Less Favorable Much Less Favorable More Favorable Less Favorable Large Retailers Health Insurance Companies Biotech/Pharma Oil & Gas Producers Banks & Financial Services
- 7. -46.5% -36.3% -33.1% -15.4% -9.7% 6.1% 1. Displaying the average percentage change in Equity Value of companies listed on a major US exchange (Source: S&P Capital IQ; Data pulled on 5/18/2020) Winners Losers Retail Energy, Envir. & Sustainability Technology Health Care & Life Sciences Transportation Financial Institutions Top Performer Biotechnology 14.3% Internet Services & Infrastructure 27.3% Food Retail 31.6% Financial Exchanges & Data 5.4% Air Freight & Logistics -15.3% Renewable Electricity 5.9% 7 Lowest Performer Health Care Facilities -30.3% Technology Hardware, Storage -34.4% Department Stores -68.1% Mortgage REITs -57.0% Airlines -59.3% Oil and Gas Drilling -79.5% Overview: Equity Performance1 by Sector (2020 YTD)
- 8. 27% 64% 9% 42% 45% 13% Q: Which statement comes closer to your view of pharmaceutical companies? Q: How optimistic or pessimistic are you about a company or scientific team from America developing a vaccine for the Coronavirus before the end of year? I trust pharma companies to develop a vaccine for all Americans Pharma companies will misuse funds and price Americans out of a vaccine Optimistic Pessimistic 1. Displaying the average percentage change in Equity Value of companies listed on a major US exchange (Source: S&P Capital IQ; Data pulled on 5/18/2020) Health Care Equipment Health Care Technology Health Care Facilities Health Care Services Managed Health Care Health Care Distributors Health Care Supplies Biotechnology Pharmaceuticals Life Sciences Tools and Services Winners Losers Equity Performance (YTD)1 -10.7% 4.6% 14.3% -30.3% -14.6% -3.0% 0.8% 2.8% 9.2% 14.2% +6.1%1 8 Spotlight on: Health Care & Life Sciences HealthCareEquipmentandServices Pharma,Biotech, LifeSciences Don’t Know Neither
- 9. 45% 55% 55% 30%15% Q: As you may know, technology companies are developing tracking and tracing technology that can be used to alert people if they been exposed to someone who has the Coronavirus. Which statement comes closer to your view? Q: Thinking about technology policy Congress can enact, which statement comes closer to your view of this situation? -9.7%1 1. Displaying the average percentage change in Equity Value of companies listed on a major US exchange (Source: S&P Capital IQ; Data pulled on 5/18/2020) Winners Losers Electronic Equipment Electronic Components Internet Services and Infrastructure Technology Hardware, Storage Technology Distributors Electronic Manufacturing Communications Equipment Application Software Data Processing and Outsourced Services Systems Software IT Consulting and Other Services -24.2% -18.6% -3.3% 1.6% 27.3% -34.4% -22.2% -18.4% -16.5% -15.1% -9.9% 9 Equity Performance (YTD)1 TechnologyHardware andEquipment SoftwareandServices Spotlight on: Technology MORE ENCOURAGED than concerned, trust the data will be used responsibly MORE CONCERNED than encouraged, too great a risk in companies/governments having access to this data Less Regulation More Regulation Don’t Know
- 10. Q: How important are the following factors in your selection of a retailer/brand to purchase from online while physical locations are closed? 21% Plan to continue to shop primarily online2 Q: Please select up to 3 actions a company could take that will give you the confidence to visit a physical store versus online-only shopping. 1. Displaying the average percentage change in Equity Value of companies listed on a major US exchange (Source: S&P Capital IQ; Data pulled on 5/18/2020) 2. Q: Once your state/community reopens, which of the following is likely to describe your shopping behavior? Winners Losers -23.9% -6.8% -1.9% 31.6% -68.1% -54.4% -38.0% -29.5% -28.0% -27.7% -26.7% -13.9% -2.1% 17.2% Internet and Direct Marketing Retail Specialty Stores Department Stores Apparel Retail Home Furnishing Retail Computer and Electronics Retail Automotive Retail Food Retail Food Distributors Drug Retail Hypermarket and Super Centers Home Improvement Retail General Merchandise Stores Distributors 10 Equity Performance (YTD)1 Retail Food/Staples Retail -15.4%1 Spotlight on: Retail 30% Plan to return to pre-pandemic shopping behavior2 1 Visible Safety Measures 2 Cleanliness of Store 3 Positive Reputation 1 Availability of Merchandise 2 Timely Delivery 3 Strong Customer Service
- 11. Q: Which statement comes closer to your view of banks and financial institutions amid the Coronavirus pandemic? • 1. Displaying the average percentage change in Equity Value of companies listed on a major US exchange (Source: S&P Capital IQ; Data pulled on 5/18/2020) Retail Food/Staples Retail -36.9% -35.8% -28.8% -23.5% -6.7% -57.0% -33.5% -33.4% -28.1% -26.0% -23.4% -20.3% -3.7% 5.4% -42.3% -36.0% -35.0%Thrifts and Mortgage Finance Asset Management and Custody Banks Insurance Brokers Mortgage REITs Consumer Finance Multi-Sector Holdings Diversified Capital Markets Reinsurance Multi-Line Insurance Property and Casualty Insurance Life and Health Insurance Diversified Banks Regional Banks Financial Exchanges and Data Investment Banking and Brokerage Specialized Finance Other Diversified Financial Services 31% 25% 23% 21% Positive Impact No Impact Don’t Know Negative Impact 11 -33.1%1 Equity Performance (YTD)1 Winners Losers BanksDiversifiedFinancialsInsurance Spotlight on: Financial Services
- 12. 26% 38% 18% 14% 4% Q: Recently, many commercial airlines have put in place specific policies to keep customers healthy and safe when flying, including requiring flyers to wear masks, using high-grade disinfectants that are often used in health facilities, and reducing seat capacity to allow for social distancing. Having heard this, how safe would you feel to take a flight on a US- based airline today? 1. Displaying the average percentage change in Equity Value of companies listed on a major US exchange (Source: S&P Capital IQ; Data pulled on 5/18/2020) -59.3% -51.3% -43.3% -24.2% -16.4% -16.0% -15.3% Air Freight and Logistics Railroads Airlines Marine Airport Services Trucking Marine Ports and Services -36.3%1 Equity Performance (YTD)1 Winners Losers Transportation 12 Spotlight on: Transportation 11% 29% 24% 27% 9% Gen Z + Millennials Baby Boomers Very Safe Somewhat Safe Not at All Safe Not too Safe Don’t Know 64% Total Safe 40% Total Safe
- 13. The Intersection Between Industry & Government
- 14. 14 Government Legislative Actions – Disbursed/Committed Funds1 1. Data and estimates provided by the Committee for a Responsible Federal Budget’s COVID Money Tracker (as of May 21, 2020) 2. Coronavirus Preparedness & Response Supplemental Appropriations Act 3. Families First Coronavirus Response Act CARESActPPPHCEA4 CPRSAA2 4. Paycheck Protection Program and Health Care Enhancement Act 5. Some tax changes provide tax cuts in FY20/21 but generate revenue in future years, lowering the overall deficit impact; legislation appropriates $50 billion to the EIDL program, enough to support ~$300 billion in loans FFCRA3 Individuals Business Tax Cuts & Other Education Spending State & Local Governments Public Services Small Businesses Large Businesses & Governments Small Businesses Health-Related Spending $1B $193B $68B $27B $174B $87B $360B $234B $281B $37B $1B $100B $633B $664B $61B $220B $236B $377B $556B $568B $192B $8B 5 5 Available Funds Disbursed/ Committed Total Allowed Funds
- 15. Digging into the Headlines
- 16. Meat packing Americans are Not Looking to Bail Out Many Industries 16 Only 2 industries meet standards to receive government assistance. Nearly 1-in-2 Americans want hospitals and one-third want farmers to receive government aid. Q: Regardless if the industry has or has not received any assistance, which industries deserve government funds or direct financial assistance from the federal government as a result of the impact of the Coronavirus pandemic? Please pick your top 3 choices. Health insurance Higher Ed. Banks & financial services Mass transit App-based carry- out providers Electric utilities Manufacturing Hotels Credit cardAutoCommercial Construction Residential construction Oil & gas App-based transportation 2nd Tier Industries 3rd Tier Industries Grocery Stores Clinical labs that test for diseases Food manufacturing Truckers Retail Airlines Pharma HospitalsFarmers Most Deserving Industries
- 17. They Expect Companies to Meet Certain Benchmarks to Receive Funds 17 Protecting employees is the number one priority for companies that accept government funds followed by manufacturing American-made products and donating CEO pay to employees Q: Some people have said the government should set specific actions that companies must do if they receive government funds or direct financial assistance. Do you support or oppose companies taking the following actions to receive government funding? Expected Actions Preferred Actions Optional Actions 55% Strongly Support 42% Strongly Support 38% Strongly Support Publicly release all company expenditures 1 year prior to receiving funds to show how the company was responsibly spending its money prior to the Coronavirus pandemic Publicly release all company expenditures 1 year after receiving funds Publicly release financial details of CEO and senior leadership pay 43% Strongly Support Donate CEO pay to ensure employees continue getting paid 46% Strongly Support Discontinue buying back stock until government assistance is repaid 38% Strongly Support 33% Strongly Support Discontinue paying dividends to their investors until government assistance is repaid Promise to not furlough, lay-off, fire or reduce the pay or benefits to employees 46% Strongly Support Ensure the company’s manufacturing is majority American-made
- 18. Companies Looking For Funds Elsewhere Could Still See Government Scrutiny 18 Potential M&A activity could receive greater government scrutiny as Americans shift focus to blocking foreign governments from acquiring struggling companies as well as preventing monopolies Q: Which statement comes closer to your view on how companies should proceed? Q: Which statement comes closer to your view of this situation? 42% 35% 23% 51% 28% 20% Companies should not be allowed to sell to a foreign entity no matter how cash- strapped they are Companies should be able to sell to foreign- based governments and companies as they see fit Don't know The US Federal Government should block these types of transactions The US Federal Government should not intervene in these types of transactions Don't know Other companies that have not received government funding are in need of funding to continue operating. Foreign-based governments and companies are actively looking to buy ownership stakes in these struggling U.S. companies. Some US lawmakers are calling for the Federal Trade Commission and Department of Justice to apply more scrutiny to mergers and acquisitions to prevent large companies from buying out smaller competitors to prevent monopolies from forming.
- 19. Supply Chains & The Desire for American Made Products
- 20. Americans Want to Move Away from Reliance on China for Essential Products 20 With Americans paying more attention to where their products come from, the pressure is on companies to repatriate supply chains and move away from reliance on China for essential products Q: Do you agree or disagree with the following statements? 86% 14% 78% 22% 45% 55% 45% 35% 17% 25% Agree Disagree Agree Disagree Agree Disagree The U.S. relies too heavily on foreign countries for our supply chains, products, and goods I'm willing to pay more for products if companies that make those goods move their manufacturing plants out of China China can be trusted to follow through on its trade- deal commitments to buy more American products this year
- 21. Would you support or oppose legislation that would: ✓ Require labels on each product that indicate all of the countries where the product was designed, manufactured and assembled AND ✓ Indicate what percentage of the product was made in each country Americans are Hesitant to Purchase Products Including Parts from China 21 There is overwhelming support for labeling products to show Americans the supply chain and where components are being made. Many Americans will second guess purchasing decisions Q: Would you support or oppose legislation that would: Q: How does the following impact your decision to purchase products? 94% 6% 55% Support Oppose 56% 48% 46% 39% 37% 26% 32% 36% 37% 39% 39% 34% 12% 16% 17% 22% 24% 40% Europe Latin or South America Mexico India Southeast Asia China Impact on Purchase Decision Based on Country This will not impact my decision and I would purchase I may not like where it is made but ultimately purchase I will not purchase
- 22. The Desire for American-Made Goods Fails to Align with Pricing Expectations 22 1-in-4 Americans will not pay a penny more for products solely made in America Q: How much extra are you willing to pay for a product that’s made in America? 24% 26% 27% 12% 7% 5% Zero – I’m not willing to pay more 5% more 10% more 25% more 50% more 100% more
- 23. Still, Americans Want to Require Specific Products be American-Made 23 Americans want Congress to repatriate essential product manufacturing, particularly items that are deemed essential during a pandemic Q: Some people have suggested Congress pass legislation that would require certain products be manufactured in the U.S. to prevent supply shortages, even if those products are more expensive. For each of the following industries, please indicate whether you support or oppose such legislation. Among partial sample: n =507 Some people have suggested Congress pass legislation that would require certain products be manufactured in the U.S. to prevent supply shortages, even if those products are more expensive. For each of the following industries, please indicate whether you support or oppose such legislation. 88% 12% 87% 13% 87% 13% 81% 19%50% 3% 46% 3% 45% 3% 36% 4% Support Oppose Support Oppose Support Oppose Support Oppose Medical supplies such as masks, syringes, and swabs Pharmaceuticals that treat viruses Goods purchased by the U.S. Department of Defense Airplanes and airplane parts purchased by the Airlines
- 24. However, Americans Can Put Aside Preferences for Essential Medical Supplies 24 The demand for essential medical supplies surpasses the heightened desire for American-made products. However, Americans prefer these products come from alternatives to China Q: Would you support or oppose this legislation? Among partial sample: n=507, 504 87% 13% 85% 15%40% 37% Support Oppose Support Oppose Some people have suggested that there should be legislation that would designate certain products, such as medical equipment, medical supplies and critical pharmaceuticals as “critical health supplies” and that federal, state and local governments and U.S. companies only be allowed to purchase these products from manufacturers that are: BASED IN COUNTRIES THAT ARE U.S. ALLIES BASED IN NORTH AMERICA, SOUTH AMERICA OR EUROPE
- 25. Americans Continue to Watch Companies & CEOs
- 26. Americans Maintain Their Focus on Company Actions During the Pandemic 26 The focus on employees’ safety and well-being continues to draw significant attention. In addition, companies actions on providing sick leave and whether they take government loans is gaining attention Q: As a result of the Coronavirus pandemic, how much attention are you paying to... Mid-MayLate March Did not ask in survey Did not ask in survey 32% 36% 38% 39% 44% 40% 47% 35% 40% 45% 46% 47% How and where companies source their products/supply chains How companies apply for or take government loans or grants How companies are providing sick leave benefits to their employees How companies are paying or retaining their employees How companies treat their customers Leaders/CEOs stepping up to help others in need How companies care for their employees’ safety and well- being Paying much more attention
- 27. 23% 24% 24% 26% 34% 51% Providing transparency on how their executives are paid Sustainable and responsible usage of water, land and other resources Giving back to the communities where these companies operate Reducing their greenhouse gas emissions and the impact their operations have on the environment Remaining financially able to avoid having to lay off their employees Protecting the health and safety of their employees Summary of ALL Choices Ranked 1st Remaining financially able to avoid having to lay off their employees 34% Ranked 1st 41% Ranked 2nd Protecting the health and safety of their employees 51% Ranked 1st Protecting Employees is the Key Expectation for Companies 27 Protecting employees by keeping them safe and healthy to financially protected is vital. Being good corporate citizens, sustainability policies, and transparency on executive pay are less important right now Q: Which of the following actions would you MOST like to see major corporations take as a result of the Coronavirus pandemic? Please rank your top 3 Most Likely to Be Ranked 1st Most Likely to Be Ranked 2nd
- 28. Americans Continue to Post Positive News about Company Actions 28 1-in-3 Americans have posted something recently about a business or leader going above and beyond. They also have nearly doubled their posting of negative stories since late March Q: Thinking of the reaction to the Coronavirus pandemic specifically, have you shared/posted a comment, picture or news story of... 30% Posted about a business/ leader going above and beyond Posted about a business/ leader not doing the right thing 8% 33% Posted about a business/ leader going above and beyond Posted about a business/ leader not doing the right thing 14% Mid-MayLate March
- 29. Some Efforts to Protect Employees Can Backfire 29 While a majority of Americans support CEOs donating their pay, nearly 1-in-3 say it is an attempt at a headline grab. Employees of some industries are more likely to believe this, underscoring recent pushback Q: There are certain CEOs who have volunteered to donate their salaries during the Coronavirus pandemic. Which statement comes closer to your view of this scenario? 29% 53% Don't know, 18% CEOs are doing their best to ensure employees continue to get salaries during a tough time when companies are on the brink of shutting down These CEOs are simply trying to get positive headlines and shows how truly divided we are if they can easily hand over their supposedly hard- earned pay More Likely to Say CEOs are Seeking Headlines Financial Services Employees (40%) Energy Industry Employees (39%) Tech Industry Employees (39%) Industrials Industry Employees (37%)
- 31. Those Working from Home A Significant Trust Gap is Developing Based on Where Employees are Working 31 Employees working from home gained significant trust in their employer during the pandemic. However, on-site employees have far more mixed reactions. Q: [IF EMPLOYED] The ways in which my employer handled the events surrounding the Coronavirus pandemic has changed the trust I have in my company’s leadership in the following way: 40% Increased trust in their employer 19% Significantly 74% Increased trust in their employer 45% Significantly 61% Increased trust in their employer 36% Significantly General Population Those Working On-Site 21% Decreased 38% Did not change 6% Decreased 19% Did not change 13% Decreased 25% Did not change
- 32. 21% 26% 20% 36% 25% 31% 30% 20% 41% 29% 30% 36% 31% 33% 27% 19% 26% 19% 17% 19% 22% 15% 8% 11% 13% 15% 11% 11% 30% 37% 37% 37% 38% 40% 41% 44% 47% 33% 39% 41% 42% 43% 41% 39% 39% 36% 20% 16% 16% 14% 13% 12% 13% 8% 12% Excellent Good Fair Poor Not applicable On-Site Employees are More Critical of Employer Communications 32 Q: How would you rate your employer’s communications in each of the following areas since the Coronavirus pandemic began… Employees working from home rate their employers’ communications far more favorably than those on- site. This underscores the need for employers to address concerns more strategically across audiences Concern for your health and safety Health benefits available to you Your working options The future of the company you work for [IF WORKING FROM HOME] Effectively and efficiently working from home Modifying your work hours (i.e. longer or shorter, flexible working) [IF WORKING FROM HOME] Duration of working from home Your personal job security Potential furloughs or staff reductions Those Working from Home Those Working On-Site Not asked of audience Not asked of audience
- 33. The Result is a Growing Divide Between Employees 33 While a majority of employees believe they are being treated fairly, there is some growing sentiment that the Coronavirus pandemic is highlighting a divide among employees who work from home vs. on-site Q: [IF EMPLOYED] Do you agree or disagree with the following statement when it comes to your employer? Q: [IF EMPLOYED] Which statement comes closer to your view of your company? Those Working from Home Those Working On-Site My employer is treating all employees with the same concern for their well-being throughout the Coronavirus pandemic, regardless of who they are. 89% Agree 58% Strongly 69% Agree 40% Strongly The Coronavirus pandemic has highlighted that there is a fundamental unfairness in my company between employees who can work from home and employees who have to work on site. 58% Agree 31% Strongly 42% Agree 19% Strongly I am concerned the Coronavirus pandemic has shown there will be negative feelings between those who have to work on-site and those who can work from home I am encouraged by how everyone in my company has come together to look after each other and get the job done under difficult circumstances 35% Concerned 26% Concerned 60% Encouraged 56% Encouraged
- 34. Personal Outlook on the Future
- 35. Personal Outlook is Better Than That of the Community and Country As is human nature, Americans tend to be more optimistic about their own personal health and financial situations, and slightly more pessimistic about that of their community or country. Q: How optimistic or pessimistic are you about the following? 22% 24% 26% 34% 24% 41% 33% 40% 6% 9% 8% 6% 28% 20% 22% 14% 21% 7% 11% 6% The U.S. economy The health of people in my local community My personal finances My personal health Very optimistic Somewhat optimistic Neither optimistic nor pessimistic Somewhat pessimistic Very pessimistic Very optimistic Very Pessimistic 35
- 36. Baby Boomers are the Least Optimistic Baby Boomers tend to be the least optimistic when it comes to their outlook on their health and finances and even more so at the community and country level. Q: How optimistic or pessimistic are you about the following? Personal Community Personal US Economy Millennials + Gen Z 40% 29% 33% 28% Gen X 36% 27% 28% 25% Baby Boomers + 27% 18% 18% 13% 36 Health Financial
- 37. Remember: Ask us for a briefing for your team Thank you! May 2020 Contact: Brent McGoldrick, SMD Brent.McGoldrick@fticonsulting.com Geoff Serednesky, MD Geoff.Serednesky@fticonsulting.com Kristy Pultorak, SD Kristy.Pultorak@fticonsulting.com Lindsay Kunkle, SD Lindsay.Kunkle@fticonsulting.com James Condon, SD James.Condon@fticonsulting.com Courtney Clark, SC Courtney.Clark@fticonsulting.com Brittany Moon, SC Brittany.Moon@fticonsulting.com