The global economy is experiencing what is probably its deepest slump since WW2. Unemployment is rising dramatically in many countries, above all in the USA and Great Britain. Dismissals
are the order of the day, new hires are scarce.
The crisis is not sparing logistics companies either, as the slump in intercontinental transport volumes shows. Nor recruitment agencies, as this personal report by Markus Bock, the owner of the Hamburg-based specialist for HR Consulting & Recruiting, Facts & Skills, illustrates. Yet, besides the suffering being caused by Covid-19, he also sees the virus as an accelerator of innovation.
On 25JAN20, my wife returned to Hamburg after a 3-week stay in Beijing and Shanghai, where we have branches, and at the same time as she came back, I became ill. It was not simply a slight cold,
as would be usual at this time of year, but fever, coughing, and extreme fatigue - first contact with the corona virus?
I still do not know. The general practitioner did not want to receive me in his practice, the local university hospital did not feel responsible and the helpful lady from the nationwide corona hotline referred me as a Hamburg resident to the Bernhard Nocht Institute, a world-leading specialist facility for tropical medicine. After two telephone calls with members of the Institute and answering several questions, I knew that I did not belong to the risk group and that I probably only had a simple but severe flu, like a great many others.
Phase of contract cancellations began in early February
At the same time as "my" flu, we received the first contract cancellations in Hamburg. Logistics service providers who were looking for specialists for the sea freight import business or their fairs & events department, lamented the drop in orders and suspended any new hiring for the time being. This was also the case with some airfreight logistics providers.
At the Hamburg headquarters of a large Asian shipping company, applicants called and asked to be allowed to attend job interviews outside the company building because they were concerned about being infected with the coronavirus within the office. This was all in February, before contact restrictions were imposed in Germany and other countries.
Video-based interviews have been used in the recruiting selection process in China already since the beginning of February. However, the final interview still takes place face to face, both in Germany and China, thus for China all final interviews have been "postponed" until April. In Germany, some logistics companies will start face to face interviews again in the last week of April.
Hardly any new hires at logistics companies
During the course of February and March, an increasing number of logistics service providers in Germany, whether they were SMEs, established medium-sized companies or even large freight forwarding groups, began to stop hiring new staff. Already scheduled job interviews were cancelled at short notice and postponed indefinitely.
We have seen a decline in contracts of around 30% in China since the beginning of the coronavirus pandemic. We are currently no longer processing any search assignments at all in the Retail and Air&Sea Logistics segment, and in the eCommerce and Internet Plus (online-based services) segment the number of search assignments has fallen by around 20%.
Trend: wait and see
Companies are currently even more cautious in their hiring decisions in Germany than in other countries. The predominant trend among many logistics companies is to wait and see how the pandemic has affected their company and then decide whether and in which positions to hire or replace staff.
Several of the logistics service providers based in Germany have now introduced short-time work. We did the same in Hamburg at the beginning of April. In my opinion, short-time work is indeed a very practical and sensible method for companies to be able to deal with such exceptional situations.
In China, in order to cushion the impact of the pandemic on companies and employees, the government has implemented tax deferrals and a waiver of social security contributions over several months, differentiated according to company size.
Corona acts as an innovation accelerator
Despite all the negatives, there are also positive aspects:
Society has realized that logistics is essential to keeping the system running, and thus, in many places, people working in logistics are now held in different regard than prior to corona.
The workforce in many companies has also "moved closer together," despite the lockdown. Times of crisis obviously lead to greater solidarity.
In no time at all, IT system administrators have made companies home office capable...purchased VPN licenses...and discovered that, when necessary, things can happen very quickly...
As one system administrator recently said to me: "What we are seeing these days is digital transformation at speed."
From a human resources perspective, the last weeks and months have been very valuable in terms of the experience and knowledge gained and still to be gained regarding working from home. For years, the possibility of using a home office has been one of the most important pro criteria for applicants. Many shipping companies and logistics service providers have until now have struggled with this employee wish. Yet, now that important practical experience has been gained, some HR managers are already working on models for sensible home office contingents to increase their attractiveness as a company.
Forecast for the future
In our estimation, the situation will remain challenging for Air&Sea Logistics in 2020. The development in the second half of the year remains to be seen.
While Internet Plus companies (online-based services such as food delivery) are experiencing a boom during the corona pandemic, demand is expected to decline after contact and movement restrictions are lifted.
For the eCommerce industry, the speed of growth will depend on the purchasing power remaining or regained after the corona pandemic and the associated consumer behaviour.
Time to complete unfinished homework
We, as recruiting specialists and external HR agency, are generally optimistic about the future and are using the current time to optimize internal processes, expand our candidate network and prepare for future search assignments.
To conclude, here is a brief overview of our company:
Facts & Skills is an internationally active personnel consultancy. It was founded in 2007 and is represented at three locations: Hamburg, Shanghai, and Beijing. A total of around 30 recruiters and consultants work on finding the right candidates (m/f/x) for companies in the fields of logistics/supply chain, e-commerce, and retail. The experts use a wide range of recruiting methods, from advertising in selected media, active sourcing in social business networks, through to the classic direct approach if the digital search does not yield any results.
Geographic core markets are currently Germany and China.
Guest article provided by Markus Bock, owner of Facts & Skills
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