Project Management Institute

The Impact of the COVID-19 Crisis on Project Business

Cooperative Survey of Project Management Institute (PMI®) and the Project Business Foundation

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Report (11 June 2020)

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Cooperative survey of Project Management Institute (PMI®) and the Project Business Foundation

The Impact of the COVID-19 Crisis on Project Business

Contents

Introduction

Contact

Overview

About the Survey Respondents

Data Finding Highlights

Participant Comments

Survey Takeaways

PMI Responds

Introduction

The Resilience of Project Managers

To those we serve, “This too shall pass.”

During this crisis, there are three things those in project management can be sure of:

● There will always be projects. In today’s rapidly changing world the need for project management skills is ever-increasing.

● Project management is known for being one of the more transferable skills.

● Project managers and project management will play an indispensable role in the post-pandemic recovery.

● PMI will always be here to help.

This survey, conducted jointly with the Project Business Foundation, was done so that we could better understand how contract project managers have been impacted by COVID-19.

We were happy to learn that our core services are helpful in measurable ways:

● Being a Project Management Professional (PMP)® certification holder increases the chances of contracts being renewed.

● Being a PMI member increases the chances of contracts being renewed.

● Chapter members are less concerned about losing their jobs than project managers in general.

We are also seeing evidence that PMI is being helpful now:

● During this turbulent time, we have received a lot of great feedback on the free resources we have offered during this crisis, included in “Resources for a New Work Ecosystem”. These are valuable, PDU-bearing resources you can use to sharpen your skills.

● Even more people than usual are participating in local (now virtual) chapter events, where they can learn something new and uncover local opportunities while making new friends.

● Our virtual events, such as PMXPO are drawing record crowds.

We know this is a tough time for many of our stakeholders, but we are seeing some strong signs of improvement already. I have no doubt that we will all emerge from this stronger and better than ever. Throughout this crisis, PMI will be here for you. If you see areas where we can do better, please don’t hesitate to reach out and let us know.

I, along with everyone at PMI, look forward to working together to forge a strong future for project management.

Sunil Prashara
President and CEO
Project Management Institute (PMI)

A Survey on Project Business in Times of Crisis

This is a report on the results of a survey jointly conducted by PMI and the Project Business Foundation. The intention was to replace observations and opinions with reliable data. The mission was to better understand the current challenges for contracted project professionals and their clients and identify opportunities to provide assistance.

A healthy project economy, and the ability of practitioners to thrive in it, is dependent on strong project business. This includes customers, who are prepared to entrust their often mission critical projects to vendors as contractors. And it needs trustworthy vendors, who are doing the work for their customers reliably and with a dedication to a joint mission. The significance of cross-corporate projects, which is further growing and outpacing internal, cross-functional projects, was the reason that, last year, the Project Business Foundation was founded.

As an association, the Project Business Foundation sits at a challenging place – at the overlap of project management, business management, and contract management. And that’s precisely, where our audience is: project managers performing customer facing projects and their colleagues on the client side, who manage dynamic project supply networks with growing complexity.

This explains why this survey is so important. The Coronavirus (COVID-19) crisis hits organizations on all three levels:

■ Project management: Will projects be able to deliver the results for which they are undertaken?

■ Business management: How do organizations and individuals, for whom projects are profit centers, get impacted by the crisis?

■ Contract management: Are organizations and individuals in the current situation able to meet their contractual obligations?

We believe the results of the survey provide an indication for both associations about how we can help practitioners enhance their own development, while reducing the burden that this pandemic poses for them. A pandemic that will probably shape our life and the economy for some time.

The Project Business Foundation would like to express its gratitude to PMI for supporting this initiative.

Oliver F. Lehmann
President
Project Business Foundation (PBF)

Contact

- Project Management Institute: https://www.pmi.org/about/contact

- Project Business Foundation: https://www.project-business.org/contact/index

Overview

Project Management Institute (PMI) and the Project Business Foundation have joined forces to take inventory of the COVID-19 challenges many organizations are currently facing. The purpose of the survey is to help both organizations and our communities better understand the impact of the virus on The Project Economy so they may provide helpful resources.

The survey was sent to 10,000 random people from PMI’s database via an email invitation to participate. An invitation to take the survey was also posted on several social media sites.

Responses were collected for approximately three weeks from 12 April through the start of May, a time when the COVID-19 crisis was initially peaking in various countries. The survey was specifically targeted to practitioners who work as independent contractors and/or work as employees of contractor organizations.

About the Survey Respondents

In total, 251 respondents completed the survey of the 640 who started it, representing the project management cohort the survey is focused on. The cohort represents project management practitioners who:

■ Primarily provide project, program, or portfolio management services to external clients or customers (n = 170)

■ Primarily provide project, program, or portfolio management consulting and/or training to external clients or customers (n = 81)

Practitioners who primarily provide project, program, or portfolio management services within their organizations were screened out of the survey (n = 346); along with another n = 40+ who are not involved in providing project, program, or portfolio management services.

Additional Data about the Cohort of Respondents

Here is some additional data about the survey’s respondents.

■ 49% of the cohort are PMP® certification holders

■ 46% are PMI members; 20% are former PMI members

■ 31% are PMI chapter members; 16% are former PMI chapter members

■ Region breakdown of the cohort:

- Europe = 60% (~ 2 in 3 are from Germany)

- North America = 16% (~3 in 4 are in the United States)

■ IT and Consulting represent the largest industry sectors of the cohort (24% and 19% respectively)

■ IT (57%), Business Transformation (36%), Engineering (27%), and Operations (25%) represent the types of projects the cohort work on the most

■ 60% of projects have anywhere from 6 to 25 team members (median range = 11-25)

■ The cohort works on small and large projects ranging from less than $100,000 to over $10 million (median range = $500,000 - $1 million)

■ Project duration is typically in the range of 6 to 36 months (median range = 6–12 months)

Data Finding Highlights

Job Loss

Respondents were asked about their employment status.

■ 6% of all the qualified respondents have lost their jobs as a direct result of the COVID-19 crisis; another 6% are unemployed for other reasons.

■ 1 in 4 of the cohort Respondents say their organizations, who provide project management services to other organizations, are extremely likely to lay off employees and 16% think they’ll be part of the layoffs (i.e., they’ll lose their job).

- Cohort practitioners who are currently a PMI Chapter Member have a significantly lower rate of unemployment resulting directly from the COVID crisis (5%) when compared to past chapter members (20%) and those who have never been a part of a PMI chapter (10%).

- A significantly lower proportion of PMI Chapter Members are worried about losing their jobs (9% say extremely likely to lose job vs. 15% non-Chapter Members and 28% of past Chapter Members).

Negative Effects of the COVID-19 Crisis

Respondents were asked about the impact of the COVID-19 crisis on their jobs and businesses.

■ 8 in 10 say the COVID-19 crisis has had an extreme to moderate negative impact on business in general.

    Respondents tend to be a bit more optimistic about the future but only in that it will go from being extremely bad to moderately bad. 7 in 10 say that they expect the chances of their clients and customers renewing the contract as negatively impacted.

■ On the flip side, however, 20% of the cohort have not been negatively affected by the COVID-19 crisis at all. To a large extent, these Respondents tend to be in the IT/IS industry and/or are working on IT/IS type of projects; the inference is that the IT folks are busy building infrastructure for remote work, including maintaining security, privacy, etc. and running their clients’ companies remotely. See Figure 1. Level of negative impact reported by the survey respondents.

Figure 1. Level of negative impact reported by the survey respondents.

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More results:

■ Cohort practitioners from European countries (mostly Germany because of a high response rate) seem to be less adversely affected by the COVID-19 crisis, compared with other regions.

■ A higher proportion of practitioners who are not PMP certification holders (33%) say their contracts are not at all likely to be renewed versus PMP practitioners (21%); the inference is that PMP certification holders work on more important projects that have a better chance of getting renewed.

■ A higher proportion of practitioners who are not PMI members (38%) say their contracts are not at all likely to be renewed versus current PMI member practitioners (20%).

■ Overall, only one third of the cohort is confident that their projects will realize more than 75% of their intended benefits.

Helpful Resources

Respondents were also asked what offerings from PMI and PBF they consider to be most helpful. See Figure 2. Offerings by the associations considered the most helpful.

■ The majority cited that a job portal and professional development opportunities specifically focused on this cohort are two resources that would be most helpful in dealing with the effects of the crisis.

■ Consultants and/or trainers have different needs than the majority with respect to resources that would be helpful and cited the following three resources to be more helpful (compared to those who are practitioners working on client sites):

1. Lobbying governments for project business; 43% versus 29% at client sites

2. A B2B marketplace portal with a sharp focus on project business; 38% versus 25%

3. Help hotlines for project management practitioners; 28% versus 13%

Figure 2. Offerings by the associations considered the most helpful.

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Helpful Offerings for Specific Groups

Practitioners working on Business Transformation type of projects cited the following resources as more helpful than people working on the other types of projects:

■ Lobbying governments for project business

■ Providing market data on project business

■ Support of ADR (Alternative Dispute Resolution)

PMI members say that having market data on the business of projects is helpful to them (39%) more so than non-PMI members (24%).

Participant Comments

The Respondents were given a free-text field for comments on the topic. Here is a selection of the comments they made.

On the Impact of Project Business

Business impact is very diverse for the respondents and the organizations they work for. Some project businesses are obviously very vulnerable to the disruption from the COVID crisis, whereas others are more resilient or benefit from the crisis. Problems were reported on customer demand, but also on the supply side:

■ “Massive disruption.”

■ “The vulnerability of business has become obvious to everyone.”

■ “Lucky to be working for clients providing essential services. Team members have reacted well to the radical change in how we operate.”

■ “The trickle down of reduced revenue of clients at best will delay contracts but worst case will cancel causing company’s inevitable reactions to reduce costs (salaries).”

■ “It’s a big fight for new customers, so prices are going down.”

■ “Well, such an impact in my particular case is not that heavy because I am working right now in the health sector.”

■ “We face a shortage of supplies.”

■ “Business transformation projects are not impacted, rather it is creating opportunity.”

On Project Performance

Review of the comments finds that project performance seems less impacted than the business side, as confirmed by the data. To a large extent, the Respondents tend to be in the IT/IS industry and/or are working on IT/IS types of projects; the inference being that those working in the IT industry are busy building infrastructure for remote work, including maintaining security, privacy, and running their clients’ companies remotely.

■ “Fast digitalization of our services helped us not losing or stopping all services but low IT literacy and habits of market to work and study online is an obstacle.”

■ “This global crisis clearly indicated that projects are more than just processes, methods and tools. The PMI Talent Triangle is a great tribute to that thesis!”

■ “We have learned working in virtual teams, which wasn’t part of the company culture and I believe this a positive change in future.”

■ “The projects continue to run but at a lower speed. So, we need tools and strategies to be more effective under extreme circumstances. I believe the major impact right now is not being able to deliver on time prototype samples to our customers.”

On Working Remotely

To the degree that the project work allows working from home, people have gotten used to it and have improved their skills around working remotely. Family is a challenge when children learn at home, and so is privacy:

■ “Tools need to be reviewed to make them more applicable for sharing online, where the client or a team is not next to you.”

■ “I believe that some clients are finding that working remotely can be just as effective as on-site especially if travel costs are involved.”

■ “Because of school closure, I have to take the time to teach my son. That decreased my effectiveness in handling other tasks.”

■ “Seamless change to office at home. Digital environment reduces negative impact on project management.”

■ “100% home office means start every day at 7 a.m. and finish your day at 10 p.m., customers expect even more availability than ever before.”

■ “We have pivoted to working remotely so seamlessly that I’d foresee a downward trend for business travel.”

■ “Work from home is the new normal. I don’t like working from home but getting used to it. Future may see companies offering more work from home.”

On Freelancing

Self-employed freelancers’ businesses seems to have been hit hardest. Their ability to win new business has diminished, while existing business has already been lost or is about to end. The competition among freelancers has decreased the rates they can achieve. While a few Respondents reported a positive impact of the COVID-19 crisis on project business in their organizations, freelancers reported solely negative impact on theirs:

■ “People aren’t keen to pay for project management training right now let alone the services as the environmental industry is so badly hit with way too many uncertainties. The truth is they really need the training right now more than ever. Neither can I find grants to help me deliver my services as most of them don’t even cater to project management focus and worst still, it’s impossible when you are not a not for profit organization.”

■ “Rates are under pressure, a lot of other externals furlough.”

■ “The freelance market has dried up - no opportunities. No option but to wait for activity to resume. Those with the most experience likely to get placements but at reduced rates.”

■ “Networking and partnerships are very important.”

■ “My income has been considerably reduced due to COVID 19. Fewer job opportunities. I expect to play a better role as a project manager in the reconstruction of the local economy.”

On the Future

The future outlook is generally uncertain. The duration of the crisis and its impact is unclear, and people do not know what business will look like after the crisis:

■ “Lots of unknowns as to the future. So far we are being told our jobs are safe and new business three months out is as forecasted. But our customers may not move forward on projects as planned.”

■ “The situation is complicated because people are nervous.”

■ “I’ll resume in one word: uncertainty.”

■ “New health and sanitary protocols and procedures will need to be implemented in many on-site projects.”

■ “I had just joined new organization. But, now salary is being disbursed thru different way. It will definitely have negative impact on career path and growth.”

Survey Takeaways

Organizations and individuals who rely on income from project business have been impacted by the COVID-19 crisis to varying degrees. About 20% of respondents are in projects whose contracts are further executed with minor impacts or no impacts at all. Others have lost their contracts and, with them, their source of income. Seventy-three percent report a negative impact on profitability and cash flow.

More impacts have resulted from the requirement to implement “social distancing.” Certain projects can be performed by virtual teams. Others require a physical presence and proximity of team members. Three in ten projects are expected to produce the ordered and expected deliverables, which means that for seven out of ten projects, the ability to produce agreed-upon results has been impacted. In two of these seven projects, this impact is extreme.

The outlook on project business was considered moderately to extremely negative by eight out of ten respondents. What can associations do to improve the situation? The respondents to the survey most strongly agreed to two offerings:

A specific job portal for project business: Existing job portals seem to be insufficient for the specific needs of the discipline of project business management.

Professional development opportunities: Practitioners involved in project business management have some specific requirements to meet, in particular in the commercial and legal fields. There is a need to help these practitioners meet these requirements.

These two measures were each considered helpful by over 50% of the respondents. Here are more measures that were regarded as helpful (each by 33%):

Lobbying governments: It seems that practitioners and organizations in project business are often partially or fully ignored in political decision-making relevant to their businesses and jobs. This leads to decisions that are particularly hurtful for them. The associations may be able to develop influential mechanisms that bring project business and the people involved in it into the political arena.

Certifications for practitioners: Current certifications focus more on internal, cross-functional projects and widely ignore the professional situation in customer-facing projects, and also in projects that are done with large project supply networks. One in three respondents asked for such certifications.

Providing market data: The market for project business is rarely analyzed as it is common in other markets. The lack of data impacts decision-making for individuals and organizations. In times of crisis, this may be hurting them even more than in “normal times.” Again, one in three respondents asked for such data.

The survey indicates that much work is to be done by the associations. With a specific focus on project business management, the need to provide new services and solutions is probably more pressing for the Project Business Foundation; however, for both associations, the findings highlight the need for a call to action.

PMI Responds

As the entire world contends with the COVID-19 crisis, people and organizations have been called upon to make rapid changes and sacrifices, as together we adjust how we work and live.

PMI is here to support you and is laser-focused on being a resource for our members, certification holders, and project professionals around the globe. PMI stands ready to provide you with resources, connect you to your community of peers, and help to continue advancing your professional development from wherever you may be. Here are examples of our current and upcoming digital products that can benefit you:

PMP Online Proctored Testing Exam candidates now have the option to take the Project Management Professional (PMP)® exam and other certification exams online from their office or home.

Agile in the PMO Currently being offered at no cost, this course will position you as a project management office (PMO) director, walking you through a series of scenarios designed to improve your PMO’s performance using agile principles and processes.

Basics of Disciplined Agile Gain an introduction to Disciplined Agile and new ways of working (while earning PDUs) with this comprehensive online course that acts as your personal guide to the world of agile as we reimagine the future of work.

Navigator—Beta Currently available at no cost, Navigator offers opportunities for comprehensive self-assessment of skills, interests and goals, while offering an action plan to achieve your objectives.

PMI Study Hall—Beta Study Hall provides candidates a sneak peek into new PMP certification exam resources, including outlines of exam content, daily practice questions, tips from experts and exam preparation advice.

Virtual Events PMI is still driving forward on a variety of virtual events and learning opportunities, including Mega SeminarsWorld on 22-25 June. Learn more at PMI.org/events.

PMIstandards+—Beta If you are a project professional looking for reliable resources to complement A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Sixth Edition, you can now benefit from digitized tools, templates and case studies with PMIstandards+.

Snippets—Beta Now available for a free trial, Snippets offer bite-sized learning for professionals who are seeking quick, reliable and relevant project learning.

Tower Game Available at no cost through the PMI Educational Foundation, this fun project management exercise can be used by students of all ages and is currently available in 17 languages.

The digital offerings in PMI’s ecosystem all complement each other, reinforcing learning and giving practitioners the ability to customize their unique journeys.

We encourage you to visit PMI.org to learn more and access these and other resources directly.

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