Companies distrust pandemic economic recovery 2021 - Companies don't trust recovery: more than a third believe it will close the year worse than at the beginning of 2021.

The economic recovery has begun timidly since the end of March in Spain and the Government insists on the message of economic recovery, however neither companies nor professionals are very optimistic with the evolution of the Spanish economy and employment in the coming months, which still leads them to have some pessimism and contemplate in half of the cases layoffs or wage cuts.

In fact, 37.6% of companies believe that 2021 will end worse than it started, while 36.5% believe that it is better and the other 25.9% think that it is the same, while 43.3% of professionals with work, and 44.4% of the unemployed do not expect a positive evolution of employment this year.

This pessimistic attitude widespread it is one of the general ideas which are extracted from the XXIV edition of the Report prepared by the work portal Infoempleo and the Adecco Group, made tas analyzing over 242,000 job offers published during the past year, and through a survey of companies and self-employed persons and to more than 10,800 persons with and without employment, between April 12 and may 13, 2021.

Companies distrust pandemic economic recovery 2021

The uncertainty about the health and consequently economic evolution continues between companies and workers, and this leads to only 39.4% of organizations considering new hires during 2021, while more than half contemplate layoffs or salary adjustments. In detail, 25.8% declare that they will continue to make layoffs, 23.5% will make wage cuts, and 11.1% will request to enter ERTE or expand it.

This is because companies are cautious when making forecasts for the coming months, mainly fearing that consumption will not be reactivated (47%), and that there will be new resurgences that motivate new periods of confinement (41.7%). They are also afraid that the increase in costs (31.7%), and changes in habits and/or tastes in the customer (29.4%), prevent them from recovering.

Among the self-employed there is even greater pessimism, and this leads to up to 93.2% do not plan to hire anyone this year, either because they do not need it, because their activity is in recession or because of an excess of costs. Only 3.4% plan to recruit more staff.

Companies distrust pandemic economic recovery 2021

Distrust is also present among workers, since 47% believe it possible to become unemployed during 2021 due to the effects of the coronavirus, while up to 50% of professionals looking for work think they have little or no chance of finding it, either for reasons of age (29.7%), the general state of the economy (23.2%), the health crisis (12.7%) or the paralysis of selection processes (9.2%), among other reasons.

The overall state of the economy (successfully defended 48.8%, +10 points), the economic impact of the health crisis (38,8%; -20,7 points), swap positions, and the shortage of qualified professionals (34,7%; +7,4 points) are the difficulties that you fear most companies in the current work context.

Regarding the impact that the pandemic months have had on business activity, 70% of companies say that their economic activity has been reduced in 2020, while 24.7% have been able to maintain their turnover stable and only 5.2% have grown. The economic situation that companies must face because of the pandemic is behind 4 out of 10 layoffs in 2020.

Asked if they have seen the need to make layoffs in these months, of the companies consulted for the study, 43% have carried out layoffs during 2020 and 8.8% have requested ERTE extinction for part of their workforce. More than half of these dismissals (53.3%) have affected between 1% and 15% of all employees. The most frequent type of dismissal has been the appropriate one (20.6%).

Companies distrust pandemic economic recovery 2021

The main reason given by companies to make layoffs is, in 42% of cases, the economic situation they must face due to the pandemic, together with the reduction in costs, and the lack of professionalism and/or results on the part of the worker, tied with 21.7%. They are followed by corporate restructuring (17.4 per cent), financial difficulties (14.1 per cent), failure to adapt to worker change (5.4 per cent) and absenteeism (1.1 per cent).

As possible solutions, the study shows that 55% of companies consider that offering flexible hours can be one of the most effective measures both to get out of the crisis and to improve their competitiveness. Likewise, 46.4% believe that offering the possibility of teleworking is also a good measure, as well as the modification in working conditions (29.4%) and variable remuneration (24.7%).

Despite interest in the four-day workweek, 61.7% of companies do not see this option as viable. Nor does 58.6% of the self-employed believe it possible. The reason is mainly the lack of benefit to maintain wages with a better working day (32.4%), although other reasons are mentioned, such as the lack of options to cover that fifth working day with other workers (25.7%).

Other reasons are the lack of productivity margin to amortize a day a week (21.9%), the absence of automatable processes that allow amortizing said day (16.2%). This opinion clashes head on with the aspirations of the employed and unemployed, who in 56.3% and 43.9%, respectively, see the implementation of the four-day working day with maintenance of wages possible.

Companies distrust pandemic economic recovery 2021

All these somewhat pessimistic forecasts come after the hangover of the virulence of the crisis in 2020, when the capacity of Spanish companies to generate job offers contracted by 41.9%, even registering falls of 70% on average in the hardest months of the State of alarm, after closing 2019 with an increase of 10.2%.

* By sector, commerce and retail distribution (9.5%, two points more) is the one that has generated more job offers, including supermarkets and department stores), followed by the industrial sector (8.2% of offers, +2.5 points.), and the health sector, which has grown by more than five points, standing at 7.8%.

The sectors of education (5.3%), and transport of goods and logistics (5,2%) have also experienced significant increases, while hospitality and tourism has gone from leading the ranking sector with a 12.4% of the total supply, and 4.8% in 2020, marking the biggest decline of 7.6 percentage points, according to the report of Infoempleo and Adecco Group.

The Community of Madrid, Catalonia and the Basque Country continue to be the communities that generate the highest percentage of jobs in Spain, despite the fact that all three have seen their supply reduced in 2020. During the last year they have concentrated 55.9% of the national supply, more than four points below the 60.3% they represented in 2019.

# Companies distrust pandemic economic recovery 2021 #