While we’ve gotten used to a new economic crisis hitting every decade and while experts are creating increasingly complex predictive models, the covid-19 pandemic presents itself as a puzzling, unexpected challenge for global economies.
TROUBLED TIMES AHEAD
Four months into the pandemic, North America seems to have lost control while the European model appears to be doing somewhat better. But that doesn’t mean that things aren’t serious in Europe also. The European Commission expects a fall of almost 8% for the eurozone in 2020, the German economy has already shrunk 10 percent, and countries like Spain and Italy are seeing increasing unemployment rates.
Even though many European states have used furlough to prevent the explosion of unemployment, the numbers are good. More than a million Spaniards have already lost their jobs in the second trimester of 2020 as a consequence of measures taken by authorities in order to limit the spread of covid-19 infections. In June, the unemployment rate in Spain had reached 15.3 percent. At the same time, the number of economically inactive Spaniards has risen by a million, reaching 17.6 million. The economic support granted by the government in the form of furlough for 3.4 million people (the peak was reached in May) was useful but not sufficient.
In Italy, the unemployment rate has risen by 0.5 percent, reaching 8.8 percent in June. The economic inactivity rate has reached 36.8 percent and 83.000 more Italians has lost their jobs in May while another 46.000 became unemployed in June. The government stepped in and started subsidizing salaries, but the unemployment rate continues to grow.
The United Kingdom has also introduced furlough and 9.5 million people were benefiting from this kind of support in July at a cost of 31.7 billion pounds. Practically, 80 percent of their salaries were being paid by the state. British authorities have announced that they will continue this kind of financial support until October but hasn’t given any information about what would happen afterwards.
OUTPLACEMENT SERVICES FOR OUR CLIENTS
In Romania, more than 1 million people (approximately 15 percent of all employed Romanians) have been on furlough in March and April. Many of them were working in manufacturing, tourism, and wholesale or retail. After June 1st, the state continued its support but has limited payments to 41,5 percent of the base salaries for another three months.
„Recruitment projects haven’t decreased drastically but that is a possibility looking ahead to the next months. Employers are not rushing to hire new people and prefer to be careful – many times, they postpone hiring someone new even when that means only a replacement for an employee who willingly leaved the company. Many employers chose to wait and see what happens next. No employers want to send people home during these times but, if they will be forced to, it will certainly not be an easy choice.
Clients have already reached out to us for outplacement services. We are currently supporting a number of employees that the company has had to let go in the search for a new job. Our team meets individually with each person, we work on rewriting their CV, we talk through their options with them, we look at current opportunities and potential change of course in terms of their career. We activate our professional networks in search of opportunities, and we prepare these candidates for interviews. It is not a simple process and it can take weeks before we see any type of progress and success isn’t guaranteed. I do strongly believe that our emotional support and our sharing of these difficult moments make a difference for those going through them. The entire recruitment team is there to help both professionally and emotionally and we put all our resources towards helping them finding a new path,” tells Cristina Scarlatescu – Recruitment Manager for BIA HR.
We also shouldn’t forget that, as it almost always happens during financial crisis, one category becomes extremely vulnerable – young people. Currently, a quarter of the global population (almost 2 billion people) are aged 15 to 35. Experts estimate that 5 to 25 million people will lose their jobs during the covid-19 pandemic. Many of the these will be young people who are already dealing with low income and unstable or even dangerous jobs.
„As a way of supporting those who are actively searching for a job, we have launched a series of online events – the BIA Talent Webinars. During the first webinar, we’ve talked with participants about how to write effective CVs and cover letters and about how to improve their LinkedIn profiles so that these can work in their favor and open the door for an interview. In the following session we will be preparing participants on how to make a good impression during a job interview”, Cristina added.