In this blog series, we are going to interview all our Partners and learn how the Pandemic is affecting different countries around the globe. Today we are in Portugal where last week, we had a chance to talk with Leonor Pereira (Recruiter), and we asked him a few questions:
First of all, how are you? We hope that you and your family have stayed healthy during this Pandemic.
Thanks for asking. I am fine! From the beginning of this Pandemic, I have always tried to face each day with optimism and passed this message on to others, including my family, friends, and my work team.
In general, I went through three significant changes in my daily life, covid prevention measures (wearing a mask, using alcohol gel, and social distance), decreasing all social contacts (dinners and events), and I started working at home. After eight months, I am alive, and I remain energetic and positive.
How’s Portugal at the moment, or how has it been the last 6 –7 months?
The Portuguese economy was recovering when it was hit by the new coronavirus pandemic in March. Portugal recorded the first confirmed case of COVID-19 on March 2, 2020, and the first death occurred on March 16. The first cases were related to people who had recently traveled to Italy and Spain. The late appearance of the virus in Portugal, largely due to the country’s location, allowed the authorities to buy time to react.
Containment measures were quickly adopted, both by public authorities and the general population. On March 12, the Government announced extraordinary containment and mitigation measures covering a wide range of areas: non-essential travel and all public gatherings were prohibited; non-essential schools and stores have been closed; border movements and heavily restricted flights. All of these measures were taken before the first coronavirus-related death in the country, unlike most Western European countries.
The state of emergency was declared on March 19 and renewed twice, ending on May 2. At that time, it was replaced by the state of calamity (less severe), associated with a gradual reopening of economic and social activities. Even before the restrictions were imposed, the majority of the population voluntarily began to adopt measures of physical distance.
As in most advanced economies, the health system was not sufficiently prepared to face this emergency. During the first few weeks of the Pandemic, some health professionals complained about the lack of protective equipment. The Government sought to diversify the sources of supply of medical equipment, supporting national production through public tenders at the European Union level and importing equipment for shorter-term needs.
Meanwhile, several Portuguese companies (especially companies in the textile and beverage sectors), to respond to public and private demand, converted their production lines to the production of protective, sanitary, and medical equipment. Several R&D consortia have started to develop their internal capacity for the production of ventilators and diagnostic tests, with public funding, through partnerships with research centers and the mobilization of European funds from the Portugal 2020 program.
Today, Monday, November 23, 2020, as expected, the state of emergency has been renewed in Portugal for 15 days (until December 8) because of the Pandemic, which is worsening day by day.
From November 24, all Portuguese municipalities (except islands) will be divided into four risk levels (moderate, high, very high, extremely high).
The risk levels are decided according to the number of cases of covid-19 during the last 14 days per 100,000 inhabitants(Moderate risk = –240 cases / 100,000 inhabitants, High risk = between 240 and 479 cases / 100,000 inhabitants, Very high risk = between 480 and 959 cases / 100,000 inhabitantsand Extremely high risk = more than 960 cases / 100,000 inhabitants)
For you have the idea, very high-risk zones have measures like curfew from 11 p.m. to 5 a.m. on weekdays, and from 1 p.m. to 5 a.m. on weekends and holidays, Shops close at 3 p.m. on November 30 and December 7 (eve of public holidays), Mandatory telework, Shops close at 10 p.m. on weekdays (except November 30, December 1, 7, 8)and restaurants and cultural venues close at 10:30 p.m. (except November 30, December 1, 7, 8 and weekends)
Between 16 of Novevember and November 22 (7 days), there was an average of 5,583 new covid-19 cases per day (5,425 the previous week) and the average number of deaths per day is 74 (69 the previous week).
Currently (23/11), there are 2,260 people hospitalized, including 491 in intensive care. There are 83,942 active covid-19 cases, 172,919 people who have recovered and 3,897 people who have died since the start of the Pandemic.
The current macroeconomic forecasts by the European Commission, the IMF, and the Bank of Portugal point to a deep crisis in 2020, followed by a moderate recovery in 2021. Gross domestic product is forecast to fall between 3.7 and 8 percent in 2020, 0 percent, and that the unemployment rate reaches between 9.7 percent and 13.9 percent. In the best scenario, Gross domestic product will only reach pre-COVID-19 levels after 2022, while total employment may take longer to recover.
And what about business and the general atmosphere? How the companies are holding up, have there been a lot of layoffs?
Between the end of February and the end of April, registered unemployment increased from around 316,000 to 392000 (+24 percent). At the end of April, registered unemployment had increased by approximately 22.1 percent, year on year, and only half of the affected workers were covered by unemployment protection.
Collective redundancies more than doubled in April (141, covering 1,328 workers) compared to the previous month, half of which involved micro-enterprises (403 workers). More than 100,000 companies employing 1.3 million people (close to a third of the total workers), applied for the simplified temporary layoff regime, which allows companies to temporarily suspend employment contracts. For workers, the regime implies a one-third cut in wages.
Most of the workers had their contract suspended (4303 in May, 3475 in June, and 4104 in July) and the rest with reduced hours and the number of companies in traditional layoffs was:
The traditional layoff has already represented an expense of 6.5 million euros. The number of workers covered by layoff was:
The simplified regime is foreseen under the measures to support the economy as a result of the covid-19 Pandemic, which ended in July and covered about 105 thousand companies and 850 thousand workers.
Many workers were also forced to stop working to support their families after the closure of schools, kindergartens, and other services. We had the result of a strong reduction in consumption. Hotels, restaurants, and support services explain the largest proportion of job losses. The biggest concern is the risk of the collapse of tourism and transport activities. Physical distance measures had an immediate impact on demand from the tourism sector. Uncertainty, fear, and lack of confidence can lead to a prolonged crisis in the sector, which is a major concern for a country where tourism-related activities account for 8 percent of Gross Value Added and 9 percent of employment ( figures respectively for 2018 and 2017).
In tourist accommodation establishments, almost four-fifths of reservations between March and August had been canceled. Both national and international transport services were also severely affected. Airlines are a particular focus of concern due to the combination of an immediate deep shock and bleak prospects for the near future. In addition to canceled flights, few reservations are being made, and probably restrictive health measures will be imposed on air travel (reducing revenues and increasing costs), with demand expected to take some time to recover like in the same situation, we have travel agencies, car rental companies, tour operators, and cruise lines that are not predicted a foresee a consistent recovery in the near future.
Cultural, entertainment, sports, and recreational activities were the first to close or suspend their activities and may face health restrictions in the coming months.
With the end of the simplified layoff in July, the Government approved support for the gradual resumption of economic activity and, meanwhile, extended the access conditions to allow companies with billing losses above 75% to reduce workers’ hours by 100%.
In the State Budget proposal for 2021 (OE2021), the Government admits to prolonging support for the recovery, with € 309 million foreseen for this purpose.
How do you see the end of 2020? And what about 2021?
There are companies that have a treasury for two months and that are highly indebted. In the tourism sector, many companies had just made investments and were caught by the obligation to stop for reasons of the covid19. If companies that are in debt are not given an alternative to pay wages and other costs, when they resume business, they will hardly be able to pay the debt they have on their shoulders.
The big companies will have to give their hand to the smaller ones, creating new dynamics in the supply chains that will help to help those that are in greatest difficulties. Even so, there are many that will close. There is no other option. Despite the recovery plans that are in place, we will end 2020 with many companies closing their doors. My greatest hope is that 2021 will bring us the vaccine because, as far as our economy’s concerned, everything is very uncertain right now.
What do you think about the future? What is going to be the biggest difference in Portugal if you compare the situation before the Pandemic and the possible situation after?
COVID-19 affected people and not just companies. We saw real changes in the processes and in the way of working and managing customers, radically changing the way we work. Companies had to adapt to a ‘new normal’ and teleworking gained new strength. This was the main change in Portugal from Covid19 in which we see that the most qualified people with the highest salary levels had a greater capacity to protect themselves from the virus, moving, for example, with greater ease to teleworking, and, at the same time, felt a smaller reduction in their income.
I believe that after the Pandemic and as a result, one of the consequences of this crisis may be a greater social and economic difference in the Portuguese labor market, between the most and the least qualified and/or between the most and the least protected, which in the long term may correspond to an increase in social inequalities.
What kind of roles do you think companies are going to need the most after the Pandemic? Do you think there’s some big difference before and after COVID regarding recruitment and Headhunting?
With Pandemic, technology plays an essential role in teleworking environments, making it necessary to segment access to information, protect mobile devices, train employees to distinguish and prevent cyberattacks, use secure communication systems and optimize cybersecurity tools that companies have. Remote work is here to stay.
That is why I think that the functions that companies will need most after the Pandemic are directly or indirectly linked to technology: software and data development, artificial intelligence, cybersecurity, social networks, design and digital marketing and linked to health and well-being: health professionals, psychologists, psychiatrists, specialists in infectious diseases and virology, among others, as specialists in the environment and sustainability.
Regarding Headhunting, human resources professionals and recruiters will always follow market trends, a select, train, and develop people, manage the organizational climate, and contribute to a conciliatory role between employees and companies.
The Pandemic has also changed what companies look for in workers. The skills most in demand in 2019 may no longer be those seen as essential for the future of work. The crisis has further accelerated the search for technical and human skills (tech skills and soft skills ), past achievements and experiences described in the curricula have not been achieved in the current environment, and therefore, the successes demonstrated during the period of remote leadership forced into a pandemic will become increasingly essential. Organizations will look for a different and diverse set of skills that fit the new organizational landscape and their plans for the future.
Thus, the profiles to be looked for by recruiters will certainly be quite different. The skills and experience that organizations look for in executives have also changed with current conditions, and executive-level candidates may be cautious when considering a career change in the current climate, which increases recruitment challenges.
On the other hand, if it is important to maintain a job capable of guaranteeing sustenance during the Pandemic, some changes are seen as positive, since the Covid crisis19 means for professionals the reality of facing the need to look for a new job. Here, executive demand will still continue to rely heavily on extensive personal networks, industry expertise, and face-to-face relationship building.
Although some companies continue to lay off employees, the demand for management potential is high, and companies are looking at what will come next -after the crisis.
We have already seen, over the past few months, changes that will be permanent in work practices and that, hopefully, will be positive. Especially about the way you recruit – with new technological developments, the recruiter can lessen the impact of this Pandemic by using online communication in the recruitment process whenever possible. Being well informed about the client’s situations and reality and encouraging business CEOs and their administrations to embrace the benefits of flexible work.
Only recruiters who live through and overcome Hurricane COVID-19 will be the only ones able to adapt to this changing and unforeseen future, thus eliminating competition from those who may not be able to get through these unprecedented and difficult times.
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