Lovewell’s logic: The economic impact of Covid-19 continues to bite

When looking for inspiration for topics for my weekly blog, I often look back over the news we have covered that week. Unsurprisingly, our headlines this week have been dominated by pay issues, be these about employers that have awarded pay increases or appreciation bonuses to front-line or key workers during the Covid-19 (Coronavirus) pandemic or organisations that have either implemented pay cuts or placed employees on furlough in response to the impact of the pandemic on their business.

These have included:

There can be no disputing that the Covid-19 pandemic is likely to have a long-term and far-reaching economic impact, with many economies expected to enter recession this year. Indeed, the International Monetary Fund (IMF) has described the decline as the worst since the Great Depression of the 1930s.

Many individuals are already experiencing financial hardship as a result. Among those that remain in employment, regardless of whether they have been furloughed, concerns about their future job security and financial situations will inevitably be commonplace. How employers communicate with their workforces now, therefore, may well be crucial when it comes to building and maintaining employee loyalty and engagement in the coming months. Even if the messages may not be what employees are hoping to hear, transparency and honesty will be appreciated.

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Based on current projections, the economic picture is likely to worsen before it starts to improve, meaning many more organisations will find themselves with difficult decisions to make.

Debbie Lovewell-Tuck
Editor
Tweet: @DebbieLovewell