As the world lives in various stages of lockdown meant to slow the spread of Covid-19 and the virus that causes it, the novel coronavirus, staffing firms across Europe and the UK are doing what it takes to ensure the health and safety of all their workers as well as deal with the business situation.
The impact of lockdowns on the labor market and the economy has seen staffing firms transition to flexible work models to avoid disrupting their services to clients and candidates while protecting their workers.
At the same time, demand for services has varied greatly by sector. Many staffing markets have seen drops in demand, while others have seen increases.
In Italy, one of the hardest-hit countries, staffing firm Gi Group has seen negative peaks from industries severely hit by the crisis, like automotive and retail, however it has also seen positive peaks with higher demand from industries where the crisis is producing opportunities of growth, like logistics, medical and pharma.
Meanwhile, Italian staffing firm Lavoropiù said it is responding to activity peaks and emergency situations of companies that have not been suspended by the nation’s lockdown decree because they offer essential services.
Both firms have also taken steps to protect their workers.
Worker Protection
“All of our internal staff are now working in a [flexible working] mode across all the countries, with the exception of the resources that are business critical for the continuity of service in the local branches. For these people, we have issued strict safety procedures to make sure they are all safe in their workplace,” Barbara Bruno, global temporary and permanent staffing senior director at Gi Group, told SIA.
Lavoropiù has also extended flexible working to their employees as much as possible and is using technology to do so.
“We are convinced that human contribution and the value of people remain central to our work and cannot be replaced by any other system,” Barbara Martelli, Lavoropiù’s marketing manager, said.
Over in the UK, staffing firm SThree said it moved 98% of its group headcount to remote working, ceased all hiring, and in an effort to manage its costs, it has temporarily reduced the salaries of its executive team.
UK staffing firm Robert Walters also implemented home-working across its international footprint, except for Mainland China and Taiwan where, the company says, there has been a return to office-based working as infection rates have declined.
Meanwhile, PageGroup said the majority of its employees are working from home.
Danish job board Jobindex says many of its employees are working from home and it has implemented other measures, such as repatriation to home countries for some of its employees, with two months of pay. The firm has also asked all employees to use some of their annual paid leave allotment in May. “Our employees have six weeks of paid vacation every year, and we are asking our employees to use some of this vacation now, when we have very little to do,” Jobindex CEO Kaare Danielsen says.
The crisis and resulting economic uncertainty has also led many staffing firms to suspend announcing their future guidance and halt their dividend payments.
Mobility
Furthermore, travel restrictions have been implemented across the globe which has also impacted staffing firms.
Gi Group says it has seen the biggest impact in the Eastern Europe countries, where it has a high amount of business managed through international mobility or national mobility.
“Even though the demand from clients hasn’t seen a decrease in some of these countries yet, the availability of workers has become scarce, since they cannot move from other countries or other regions within the same country anymore,” Bruno said.
Lavoropiù’s Martelli, said travel restrictions have also impacted the firm.
“Externally, it has affected interactions with client companies as well as workers, Martelli says. Internally, it has affected training. Lavoropiù provides internal employees with numerous training courses to keep their skills and knowledge high and up to date. Travel restrictions have forced the company to rework them. “Fortunately, technology is helping us with that too,” Martelli.
Elsewhere in Europe, the French Association of Employment Agencies Prism’Emploi reports that the French temporary employment market recorded drops in activity for the last two weeks of March ranging from 60% to 90% for different sectors.
In Switzerland, Swiss Staffing, the Swiss Federation for Staffing Companies, says the temporary worker industry is at risk with large drops in demand expected in the spring for personnel service providers.
Meanwhile, the UK recruitment industry has also seen a steep drop due to the coronavirus crisis, according to data from the Recruitment and Employment Confederation.
Legal Options
Staffing firms across Europe and the UK are taking legal steps to protect their workers from cutbacks and avoid redundancies.
For example, in Switzerland, the government opened up the short-time work program to temporary workers. Temporary workers in Switzerland typically are not eligible for the program, but due to the crisis, they may be compensated for 80% of their wages.
Short-Work Programs
This is a concept in which companies can reduce or cut employees hours without laying them off. Typically not applicable to temporary workers, that is changing due to Covid-19. How workers are compensated while the cuts are in effect varies by country, sometimes with the company paying a portion of their wages and the national program paying another portion.
Similar steps have been taken in the UK, with staffing firms having access to the Coronavirus Job Retention Scheme, which allows employers to continue paying part of their employees’ salary for those employees who would otherwise have been laid off during this crisis. “Although typically, contingent workers would be the first to be let go, we are aware that some clients are requesting their vendors to maintain critical workers for a time during the lockdown so that they can get their projects back up and running quickly once it is lifted, says Fiona Coombe, SIA’s Director of Legal and Regulatory Research.
In Germany, parliament passed a law to improve the regulations for short-time work benefits for a limited period due to the coronavirus crisis. The short-time work scheme (‘kurzarbeit), is an existing program where the government partly replaces an employee’s lost income from reduced working hours—in the most extreme cases all the way down to zero hours—if the business does not lay off the employee. This helps and encourages businesses to retain their employees instead of laying them off, countering rising unemployment levels.
Similarly, in the Netherlands, an emergency measure, “Temporary emergency bridging measure to maintain employment (NOW),” provides a government subsidy of up to 90% of the employer’s wage bill, including workers with flexible contracts.
However, in Spain, Andreu Cruañas, president of Asempleo, the Association of Employment Agencies and Temporary Employment, has warned of the negative effects of temporary employment regulations that allow companies to suspend job contracts.
Now, as governments begin to evaluate ways to loosen their stay-home mandates responsibly, the path forward for staffing firms will differ depending on market and segment. What remains the same is the overall dedication to keep their workers safe and to help their companies, workers and clients weather the storm.
