60% of companies will need up to one year to recover from lockdown
Today, 22 March, begins the second stage of easing the restrictive measures against the spread of coronavirus in Ukraine. Thus, the country is gradually returning to normal life, and companies will be able to resume their work. Therefore, we have made a survey among entrepreneurs to learn about the pace of resuming business operations, financial consequences of lockdown, and necessary terms to reach the pre-lockdown level of business development.
Thus, most of the surveyed companies are ready to resume their offline work or return to the office in the near future – 35% in May and 34% in June. In addition, 16% of respondents said that they had already resumed work or did not suspend it at all for the lockdown period due to the specifics of the company. Another 15% do not plan to return to the office or have not yet decided on a final date.
Regarding the work in the office, 42% plan to implement a flexible or shift work schedule, another 13% will recommend their employees to continue working from home. 20% of companies are preparing for a gradual resumption of work, starting with 25% of employees in the office with a possible increase to 50%. Another 17% of companies are ready to have 50% of employees working in the office from the first weeks with a possible increase to 75%.
Based on the experience of the last few months, 62% of directors reported that they are considering a full or partial switch to remote work mode on a permanent basis. Most are willing to allow up to 50% of the staff to work remotely.
Most companies, namely 62%, managed to keep the salaries of employees at the same level. Wage cuts affected 23% of companies, while 7% increased wages for some categories of employees. In another 3% of cases, some categories of employees went on unpaid leave.
Also, 82% of businesses managed to keep the company’s staff unchanged, and 8% are even looking for new employees now. Accordingly, 11% of companies were forced to reduce their staff.
Most businesses report losses when asked about the financial results of the two-month lockdown. Thus, 36% of respondents incurred up to 20% of income losses, another 28% – at the level of 20-50%, and 18% – 50-75% of income losses. Only 11% reported no change, and 3% were able to increase their income to 20%.
Entrepreneurs consider that currently, they need the following top support measures for their businesses:
• Reducing the tax burden on the wage fund;
• Introducing assistance payment for employees at the expense of the Social Insurance Fund from the 1st day of the employee’s sickness;
• Abolishing fines for violating tax legislation by the end of the year.
It will take six months for 20% of companies, and about one year for 39% to reach the pre-lockdown level of development. Another 17% will need two years, and 7% – more than two years. Another 10% cannot predict the time required for recovery, and 4% have not lost the pace of development during the lockdown.
Obviously, over the next one or two years, we will have to deal with the consequences of this forced shutdown, therefore we need to work in an intensified mode now. We will hope that the epidemiological situation will be favorable, and companies will be able to enter the recovery phase without another lockdown scenario.
The study was conducted from 12 to 21 May 2020. Altogether 105 participants – heads of EBA member companies took part in the survey.