One out of four companies has had to make more people redundant due to the Covid-19 crisis
April 13, 2021
One year after the coronavirus was first reported in Europe, HR and payroll specialist SD Worx looks at the damage in the business world. It asked employers in eight different countries about the impact on aspects, such as general operations, the financial results and employees' mood and well-being.
Half of the companies felt that the overall impact of the coronavirus crisis was convincingly negative. In France (52%), Austria (55%), Switzerland (54%), the United Kingdom (53%) and Ireland (56%), more than half of the companies have been affected by the pandemic. Germany scored best in that regard, even though four out of ten companies there have still experienced a negative impact of the crisis.
However, 1 out of 6 have prospered
In contrast, the other half of companies either have not been impacted or have even experienced a positive impact since the outbreak of the coronavirus crisis. For one out of three companies, the situation has remained the same. And one out of six (17%) reported overall progress. Ireland is experiencing a striking imbalance, showing the highest number of companies that are suffering badly (56%) and, at the same time, achieving the highest score of companies that are prospering (26%). In Germany, 42% of companies were capable of absorbing the shock well and have kept things running as before.
“These numbers confirm that a very large part of the business world has been hit", Bart Pollentier, Director of the SD Worx Knowledge Centre says. “Particularly in the hospitality industry (72%) and the entertainment industry (76%), three out of four companies in Europe reported being severely affected. At the same time, government support and many companies' flexibility appear to have enabled many in other sectors not to be severely affected.”
Almost one out of four sees turnover figures still increasing
In addition to the general trend, the survey also looked more specifically at how the coronavirus crisis has affected the business world. It found that roughly half (48%) saw their turnover fall. Here too, the hospitality industry (76%) and the entertainment industry (77%) have been affected the worst. In France, 58% of all companies are now financially worse off than they were before the coronavirus crisis. Nevertheless, in all the countries surveyed, turnover rose by almost a quarter (23%).
What does the coronavirus crisis mean for employment in all these companies? In about half the companies (49%), the number of employees has remained stable. One company out of three (32%) reduced the number of their staff.
Resignations by permanent employees increased in 26% of companies. In France (29%), the UK (30%) and Austria (31%), those figures were even higher. The number of terminations of flex workers and temporary staff increased by 28% as compared to the normal situation before the pandemic. In Belgium, this number was even as high as 35%.
In all the companies surveyed, there was also considerably fewer (36%) recruitment of permanent personnel. Recruitment fell by a whopping 54% in France. Belgium, the Netherlands, Germany, the United Kingdom and other surveyed countries showed an average one third drop in recruitment. There was also 37% less recruitment of flex workers and temporary hired staff in the countries surveyed.
However, almost one out of five (19%) has taken on extra people since the crisis. In Ireland, as many as one out of four companies managed to expand their permanent workforce. In the UK, this was one out of five. 17% of the total number of companies hired more permanent staff. One out of five companies took on more part-time employees. “Employment has certainly been impacted", Bart Pollentier says. “The largest number of companies that had to make more people redundant again can be found in the hospitality industry (44%) and the entertainment world (39%). Nevertheless, the majority managed to hold things together and a limited number of companies were able to benefit from the crisis and expand their teams.”
28% of companies had to reduce their wage costs. In France, this was the case for as many as 39% of companies. Only 12% of companies gave more promotions and raises than before the crisis.
More than half of companies (51%) saw employee morale and health deteriorate. Not surprisingly, hospitality (63%), health (58%), the cultural sector (67%) and education (60%) showed the worst scores in this respect.
Innovation processes boosted in one out of three companies
Finally, the coronavirus crisis also caused – and in some cases forced – a significant number of companies to innovate. At European level, one out of three (33%) companies accelerated their innovations. The United Kingdom (40%) and Ireland (39%) in particular were very quick to innovate. Obviously, the highest number of innovation processes focused on teleworking (35%) but one in four projects was about health and well-being (26%) and there has also been quite a lot of HR digitalisation and automation (24%).
In four out of ten companies, the innovation process has remained stable and 28% of companies have experienced a negative trend. “Crisis situations require creativity. The innovation processes are an example of this. The fact that more companies really went for digitalisation and other innovative projects rather than (temporarily) suspend them or cancel them shows that some entrepreneurs can spot opportunities even in situations such as this one", Bart Pollentier concludes.