Study results “Impact of Coronavirus on Polish Companies”

Presidents of various companies have no doubts – the coronavirus will negatively affect their business. This is acknowledged by 69% of the respondents in a recent study by Devire recruitment and outsourcing company. How are employers coping with the current situation? What losses will business suffer?

We are all witnessing a rapidly changing situation due to the coronavirus. The consequences can already be felt in the transport, tourism and events sectors. Transport got the first blow – initially international transport, then national. Business connected to events and culture has practically come to a standstill – concerts, sports events, performances, fairs and conferences have been cancelled. A large part of the retail and catering sector has also been significantly affected, mainly due to the closure of shopping centres.

In industries where it is possible, employers are massively introducing remote working and are transferring processes to dedicated online platforms. In this study, business managers make predictions on the potential consequences of the coronavirus for their business.

The analysis includes business response to the situation caused by the coronavirus, including:

• the current work model,
• barriers that prevent the introduction of remote working,
• long-term consequences for business.

MAIN CONCLUSIONS

POLAND (UN)PREPARED FOR REMOTE WORKING

One in three companies in Poland has not implemented remote working or has only done it partially. In 13% it was not possible at all, and 22% proposed such a solution only for selected employees. Why don't some companies introduce remote working? What barriers are they encountering?

According to a survey conducted among 2,500 company representatives in March this year by Devire recruitment and outsourcing company, so far only 21% of employers have offered full remote working possibilities. Nearly half of the companies worked remotely only partially.

According to Michał Młynarczyk, President of Devire and member of the Management Board of the Polish HR Forum: Until now, remote working has been a ‘luxury good’, available in a few industries such as IT, consulting or business services. Most employers who in the past had not been open to such a solution had to quickly change their approach not only by implementing new tools, but by completely switching to working from home.

Coronavirus has forced technological progress

Nearly 7 out of 10 companies that had not facilitated remote working in the past decided to do so after the outbreak of the COVID-19 pandemic (as declared by 67% of the entrepreneurs in the survey).

Thus, Devire data show that the number of companies that switched to remote working has tripled.

Among the industries best suited to the current situation are: Real estate, IT and Telecommunications. Here, nearly 9 out of 10 companies declare that they have facilitated remote working for their employees.

The worst situation is in the following sectors: Trade, Public Administration, Transport, Forwarding and Logistics, as well as Automotive and Aviation, where it is clearly impossible in many cases to work from home.

Why don't companies introduce remote working? Main barriers

The main barrier that prevents companies from introducing remote working is the nature of work duties – 83%. What is more, a special law introduced by the Polish government regulates the obligations of the employer and employee regarding remote working. Among them is the need to provide appropriate equipment for the employee, but according to the study as many as one in three companies did not have enough electronic equipment (e.g. laptops) for all employees.

Previously, in many companies decisions to invest in mobile equipment were cost based. A laptop is on average 20% more expensive than a desktop computer, which means a saving of PLN 500 for the company. This, in turn, made it impossible for companies to later switch to remote working – stresses Michał Młynarczyk from Devire.

The third most frequently indicated barrier is decisions of the management board, who do not believe that remote working can function efficiently. This was indicated by 10% of the respondents under “Other” answers.

IMPACT OF THE CORONAVIRUS ON THE CONDITION OF BUSINESSES

Most employers are convinced that the current situation will negatively affect the condition of their companies. Only 5% of employers see an opportunity for their company – this is the group that declared that the current situation will have a positive impact on their business. The most pessimistic are employers from the Łódź Voivodeship. After Warsaw, Łódź is the place with the highest number of COVID-19 cases. After Łódź comes Greater Poland, which was one of the first regions in Poland to feel the consequences of the pandemic. Third place was taken ex aequo by Silesian and Masovian Voivodeship.

WHAT LOSSES WILL BUSINESS SUFFER?

According to the respondents, the situ-ation caused by the coronavirus may last from 1–3 months – as declared by 67% of them. Companies mostly expect a reduction in demand for a product or service – according to 48% of the respondents. A reduction in employment also seems inevitable – as admitted by nearly half of the company managers, i.e. 45%. The sectors most affected by redundancies will be manufacturing and aviation (80% of employers expect to reduce their employment figures) and trade and catering (59% of employers also do not exclude the possibility of redundancies).

The lowest level of threat of redundancies concerns the construction and real estate sectors – 27% of employers indicate that the situation caused by the coronavirus may result in a reduction in employment figures – as well as IT and telecommunications (29%).

The stable situation in the IT sector is not surprising, because companies need equipment, tools and solutions for remote work. Whereas both the construction and real estate sectors are in decline and new investments are held back and postponed. Despite this, employers do not plan to make redundancies for the time being. This is due to the fact that companies that are in the middle of project implementation phase still may complete the projects and avoid major delays once the situation has stabilised. Unfortunately, if the coronavirus persists, the construction industry will also suffer severe consequences – explains Michał Młynarczyk from Devire.

Real threats also include liquidity problems (44% of companies) and an inability to fulfil commitments or contracts (40%).

The study was conducted using the CAWI method in March 2020 based on 2,500 respondents. Study participants: 38% managers, 20% directors and CEOs, 33% specialists, 9% other positions.

Author: Karina Chowaniak, Communications Manager, Devire