Prepared by the World Bank and the Polish Agency for Enterprise Development, the "COVID-19 Business Pulse Survey – Poland" study provided us with important information on the condition of the Polish labor market during the coronavirus pandemic. Is it really as bad as it might seem?
The COVID-19 epidemic is an unprecedented shock to the global and Polish economy, which is why monitoring sentiment among entrepreneurs is so important. Our study shows that despite a strong blow, Polish companies are not giving up and are actively looking for solutions that would allow them to survive this difficult time. At the same time, for many companies, laying off employees is a last resort. – says Łukasz Marć, head of the team responsible for conducting the study in Poland, an economist working at the World Bank.

The coronavirus harvest

The outbreak of the coronavirus pandemic resulted in a significant reduction in demand and a series of restrictions imposed on various sectors of the economy. The study, whose sample consisted of micro, small, and medium-sized companies from the industry, trade, and services sectors, shows that:

  • 69% of them recorded declines in sales;

  • for about one quarter of companies, the sales result remained unchanged;

  • statistically, one in ten surveyed enterprises achieved a positive result.

Solutions

How did the pandemic hit companies?

The financial situation forced entrepreneurs to take action. It turns out that only 4% of companies decided to lay off employees. Instead of mass cuts, the following solutions were more readily chosen:

  • reducing the number of working hours (12%);

  • using employees' paid leave (12%);

  • lowering salaries (7%).

Predictions

Forecasts for the coming months

During the study, respondents were also asked about their forecasts for the coming months, which show that:

  • in a neutral scenario, they may expect a 2% decline;

  • a negative one assumes a decline assessed at 30%;

  • a positive variant means expectations of growth;

  • 69% of companies say they will be able to operate longer than until the end of the current year;

  • 22% of enterprises assess their chances of survival at at most the next three months.

The "COVID-19 Business Pulse Survey" study showed us what problems companies from the SME sector are facing. Trade and the services industry adapted to the crisis very quickly, while industrial companies did so less so, as they were less willing to reach for digital solutions. Enterprises also do not expect their situation to change dramatically in the coming months, which is why they continue to seek outside help. This is a valuable indication useful when modeling new support instruments.

– comments Paulina Zadura, director of the Analysis and Strategy Department at the Polish Agency for Enterprise Development.

Coronavirus as a catalyst for digitalization

Nearly one third of respondents increased their use of the Internet, social media, applications, and digital platforms for business purposes. As much as 12% of total sales came from activities carried out with their help. Companies that chose this path wanted to improve primarily 3 functions:

  • sales (45%);
  • marketing (38%);
  • management (24%).

In addition, nearly 20% of companies wanted to adapt their offer to the modern customer. Slightly fewer focused on technological development in order to adapt to new conditions.

State aid

State support for business

In addition to changing business models, enterprises could also take advantage of aid from the state. The data show that most readily reached for it:

  • 2 out of 3 respondents already indicated during the study that they had received funds from public support;
  • 10% were waiting for their application to be considered;
  • 15% did not qualify for support.

The most popular was the reduction or exemption from ZUS contributions, used by as many as 61% of respondents. 56%, in turn, received a cash transfer – understood, for example, as a Polish Development Fund subsidy or a forgivable loan. One in ten companies was granted funds for wage subsidies for employees.

 

You can find the full results of the study here.

Summary

The "COVID-19 Business Pulse Survey – Poland" study shows that Polish SMEs survived the first pandemic shock without mass layoffs. Only 4% of companies resorted to job cuts, preferring instead to reduce working hours or use leave. Although 69% of enterprises recorded sales declines, the same share declares that they will be able to operate longer than until the end of the year.

The crisis also proved to be an impulse for digitalization – nearly one third of companies increased their use of online tools, which already accounted for 12% of sales. Companies readily used state aid, with the most popular being the reduction of ZUS contributions, used by 61% of respondents.