Difficult decisions of employers during the pandemic

The coronavirus pandemic and the resulting sanitary restrictions have paralyzed virtually the entire economy in an unprecedented way. In order to limit the movement of people, the authorities have introduced an order to close many businesses – shops and service establishments, cinemas, hotels and restaurants. Other companies still operating are also recording declines in revenues. Thousands of people stay at home, and remote work is not possible in every industry. Employers are drastically reducing costs, including by reducing employment. What HR policy should be adopted during the pandemic, what solutions should be used and what conclusions should be drawn for the future?

According to the data of the Polish Chamber of Commerce, in Poland from 320 to 480 thousand people may lose their jobs in the optimistic variant, and even up to 1.28 million in the pessimistic one. Employers of Poland, on the basis of the survey, indicate that in the next 3 months as many as three-quarters of the surveyed companies are planning to reduce employment, because already today over 90 percent of them are experiencing a decrease in revenues[1]. On the other hand, according to economists from the Center for Economic Analysis, there may be over 780,000 people who will lose their jobs[2] There is no doubt that the labor market is in crisis, and it may take up to several months to return to a normal, stable state from before the pandemic.

How can employers react in the current situation?

“Employers are facing very difficult decisions. Some companies are trying to maintain the current level of employment by reaching for aid under the so-called anti-crisis shield and introducing downtime or reducing the number of full-time jobs. Not making redundancies comes at a higher cost, but it also has a positive aspect – greater dedication and loyalty of employees in the future and a smoother return to full after the situation has normalised. The second option is layoffs, which will temporarily relieve the company’s finances, but will slow down and hinder the recovery of business after the pandemic – comments Katarzyna Leśniewska, acting director of the recruitment department at LeasingTeam Professional.

Companies that had a safe HR policy before COVID-19, skilfully dividing the headcount into full-time and leased, permanent and temporary employees, will cope better in the current situation because they have lower fixed costs. However, even those whose structure is dominated by full-time employees and now have to make difficult decisions regarding group redundancies, it is important that they have the future in mind and carry them out in a legal, safe and least painful way for employees, e.g. by offering them an outplacement service that will enable the dismissed employees to find a new job, at least to some extent. “At LeasingTeam Professional, we have been carrying out such processes for many years and they turn out to be very effective. Many people find new employment, and thanks to the help they receive, they are more willing to return to their former employer after the crisis, if only the opportunity arises. Also, those who remain in the company look more favorably on the changes introduced and do not lose motivation to work – says Katarzyna Leśniewska.

It is worth turning to an experienced employment agency for another reason – it may turn out that it is looking for employees for its other clients and will be willing to take over some of the dismissed employees. – Although we are observing a decrease in the demand for new employees on the permanent employment market, in the area of temporary work we see a significant disproportion between industries – some are laying off, e.g. automotive, others are hiring, e.g. food and logistics. E-commerce is also less affected by the SARS-CoV-2 situation – there is a demand for employees to serve customers, or to complete and send parcels – emphasizes Katarzyna Bryła, Regional Manager at LeasingTeam.

Two scenarios for the future

Regardless of ad hoc actions, it is important for employers to also think about how to secure themselves for the future in order to be able to respond flexibly to both economic downturns and increases. In connection with the pandemic, two main scenarios are emerging, and in each of them a sustainable employment policy is indicated.

– ŻWe live in uncertain times, reality is changing dynamically, sometimes in a completely unforeseen way, which has been particularly acutely proven by the coronavirus pandemic. In such a situation, the use of temporary work and/or outsourcing in enterprises becomes more important, as it allows for conscious running of the business, reducing fixed costs – says Katarzyna Bryła from LeasingTeam.

In the optimistic scenario, the pandemic in Poland will not develop as drastically as in other countries and companies will return to operations wanting to make up for losses as soon as possible. This will require increased efforts, which involves increasing the number of employees. Internal HR departments, which are usually not large, will not be able to carry out mass recruitment in a short time, hence the support of a specialized HR agency, which also offers business-safe forms of employment, will be helpful.

In the pessimistic variant, the coronavirus will stay with us for longer, the slowdown of the pandemic will be slow – then the activity of enterprises will recover slowly, for fear of the recurrence of the threat. In such a situation, when it is not known whether the quarantine obligation will return, it is all the more cautious to invest in your own teams so as not to have to reduce them again. In unstable market conditions, the use of temporary workers may be an important, if not the only, condition for many medium-sized and large enterprises to return to activity and maintain business.

The difficult situation in which we all find ourselves teaches that one should always be prepared for the worst. The economic crisis in 2009 was already such a lesson, but not all companies learned from it. When the economic situation was good, they hired employees mainly for full-time jobs, forgetting about the very important business principle that at least 10-20% of the staff should come from external employment, which in a crisis situation allows for quick and relatively cost-free optimization of employment.

Author of the article

LeasingTeam

Marketing Manager

Doświadczony analityk rynku pracy, specjalizuje się w badaniach nad trendami zatrudnienia i zmianami w strukturze zawodowej. Jego artykuły, publikowane w renomowanych czasopismach branżowych, pomagają czytelnikom zrozumieć dynamikę rynku pracy.