Majority Of Businesses In Ireland Took A 20%+ Hit To Revenue But Predict A Comeback

7 Mins Read 02-06-2020

Submitted by Sowjisha on Tue, 06/02/2020 - 15:23

How will businesses in Ireland fare in the post-COVID-19 landscape and what will ‘work’ look like for professionals based across the country?

Over recent months, we have arranged useful webinars and produced informational articles to help employers and their teams adjust to the constantly-changing work environment in terms of working remotely, ensuring video interviews run smoothly, how to onboard remote employees and some tips on making the office safe for employees to return.

To provide some real-world insight of what companies perceive their post-COVID-19 working life will look like, we conducted a survey of 256 businesses across Ireland and the UK.

The industries represented by Irish businesses were Finance/Banking/Financial Services, Business Services, Software & IT Services, Manufacturing, Legal, Retail, Recreation & Travel, Construction, Health Care, Transportation & Logistics, Food Production, Consumer Goods, Media & Communications, Nonprofit, Energy & Mining and Entertainment.

The impact on businesses in Ireland:

Whilst a fortunate, yet slim, 14% of businesses surveyed have seen an increase in revenue (0-20% or 20%+ increase), the impact of the crisis has been largely devastating for most companies across all industries. Almost half (46%) of Irish businesses that responded to our survey claim to have seen a 20%+ reduction in their revenue and a further 21% a 0-20% reduction. Recreation & Travel (which has essentially become a dormant industry), alongside Finance/Banking/Financial Services and Business Services, appear to be the worst hit.

Most of the businesses that responded to our survey did not lay-off any of their permanent employees, displaying their resilience to survive even in these difficult economic conditions. Unfortunately, 29% did have to reduce permanent headcount in some capacity. Interestingly, 8% increased their permanent headcount - the most sizable portion of this hiring activity came from Software & IT Services businesses, potentially as these types of organisations required extra talent to cope with demand from companies calling upon their services in order to facilitate remote working.

Very similar to permanent headcount, the management of contractors did not see too much drastic action. This said, 24% businesses did claim that they reduced their temporary/contract headcount by either 0-20%, 20-40% or 40%+. The industry, unsurprisingly, which had the most significant increase in contractors was Health Care.

As would be expected with the national lockdown, the most frequent impact outlined was that businesses had to adjust for their teams to work from home. After that, implementing a hiring freeze, reducing salaries and enforcing workplace rotation were the most common responses. Some of the ‘other’ responses included; putting junior staff on temporary layoff, moving the business fully online and encouraging employees to take accrued annual leave.

When asked to describe their current hiring situation, the most common response was ‘Our hiring has been paused or reduced but we expect it to resume once the crisis abates’.

The anticipated comeback:

Looking to the near future, we asked how soon (if at all) companies feel they would be able to recover to pre-crisis levels. It’s concerning, but not surprising given the widespread influence of the pandemic, that almost half (48%) of all Irish businesses surveyed, don’t think they will recover to pre-crisis levels any time before 2021, or potentially even beyond that. It is positive to see that, although a slim percentage of 15%, a number of businesses are confident of returning to pre-crisis levels by the end of 2020 - the industry most represented in this category was Manufacturing, likely because once the demand returns, these businesses can return to near-full functionality quite quickly.

Seemingly overnight, almost the entire world became familiar with Zoom and various other video conferencing/interviewing tools that allowed for hiring processes to continue in some capacity. Whilst it has been a useful solution to maintain a level of hiring activity when face-to-face interviews are not possible, it seems most businesses (55%) are eager to get back to previous interview methods, responding either Strongly Agree or Agree to the statement of 'Video conferencing has been a necessary tactic, but we can't wait to get back to interviewing people in person at our offices.'

Despite the fact that over half of businesses are keen to move away from virtual interviews, they couldn’t deny that they will probably become more prevalent in the future. 78% either Strongly Agree or Agree that video interviewing will play a bigger role in recruitment processes from now on. Just because organisations may want to interview a candidate when sat in the same room, given the potentially long-term adjustments to how we all live and work, they may have to make use of the technology regardless.

Historically, being able to regularly work from home was considered a benefit. That changed in an instant as most businesses had to adjust processes so that employees could work fully remotely. With many employers realising that the majority of their teams can work effectively and efficiently, despite being away from the office - compounded by the attraction of potential cost-savings from reducing office space - it’s not surprising that over three quarters (81%) of businesses in Ireland Agree or Strongly Agree that companies won’t ever return to the same levels of office-based workers as before.

Because it was less widespread, many professionals previously saw working from home as ‘the golden egg’ allowing them to have a better work-life balance and save on commuting costs. With the situation forced, and with schools temporarily shut leaving children stranded at home, we wondered whether the view of home working may have changed for the worse. It seems businesses are pretty evenly divided: A significant portion (44%) are eager to return to the office environment, whilst 38% seem content with their new remote working arrangements. Will that latter percentage ever be persuaded to return to the office?

There has been a fair amount of coverage around how temporary workers or contractors became the chosen resource in the midst of the outbreak, enabling businesses to be agile and quickly adapt to changing conditions. There seems to be a belief that this will continue: 23% think ‘there will be more temporary hiring than permanent’ in the post crisis climate. With businesses hesitant to commit to costly permanent hires, it’s not surprising that only 9% expect there to be more permanent hiring. There will be a need to hire, but doing so in the most cost effective manner is clearly going to be a key consideration given the economic state of many organisations.

Conclusion…

The COVID-19 crisis has negatively impacted many areas of business across Ireland, but now as we look forward, a company’s ability to recover fast will set them apart from their competitors. While it has been tough, and will continue to be tough for the foreseeable future, the ability of entire organisations to adapt to new working patterns has been hugely impressive and the technological tools we have grown accustomed to using have truly proved their worth.

Businesses will come out the other side more agile and with employees who have developed skills that they otherwise wouldn’t possess. We will look back on the COVID-19 pandemic as a terrible global event, but one that will likely have changed the way we work and live forever.

If you would like assistance with your recovery hiring needs, or you would just like to discuss what you think the working world will look like once we safely return to work, do not hesitate to get in touch.

How does the picture differ for businesses in the UK?

Less reduction in permanent headcount in UK but slightly greater reduction in contract headcount
Workplace rotation has been less common in the UK and there have been more instances of hiring freezes
Smaller percentage of businesses in the UK reported reduction in revenue
UK businesses seem happier with video interviews and aren’t as eager to get back to face-to-face interviewing as Irish businesses
A greater proportion of UK businesses don’t think ‘office working’ will ever return to pre-crisis levels and are content with their new remote working arrangements
A higher percentage of businesses in the UK have paused or reduced their hiring until the crisis abates
UK businesses expect less temporary/contract hiring once the crisis subsides than Irish businesses anticipate - IR35 implementation to the private sector and its ramifications to contractors in the UK will undoubtedly be playing a role in this
There is less confidence from UK businesses that they will recover to pre-crisis levels by the end of 2020