The special measures resulting from the State of Emergency have had a strong impact on the lives of Portuguese companies. Many have had to close their doors, using support measures such as the simplified layoff. Estimates indicate that around 90 thousand companies have already resorted to this mechanism.
Many other companies have had to readjust their processes and reorganise their teams to guarantee the continuation of their activities. Also, telecommuting has become a reality for many companies. A survey conducted at the end of March by Fixando estimated that four out of 10 Portuguese people who were at home due to the quarantine period were telecommuting.
For the Portuguese technology company PHC Software, telecommuting was not the biggest challenge brought by the COVID-19 outbreak, since the company already had methodologies that allow for employees to work from home. “The biggest challenge was adapting the company to this unusual time of telecommuting, where we have family at home, friends and colleagues practically all in the same situation”, explains the CEO, Ricardo Parreira. In this company, based in Oeiras, 98% of employees are currently telecommuting. To speed up work in these exceptional circumstances, all teams have a mandatory daily alignment meeting at the beginning of the day and general meetings are held with the entire company via teleconference.
But not all companies can continue their activity on a telecommuting basis. At the ISQ, the largest consulting and engineering group in the Iberian Peninsula, the COVID-19 outbreak is having a significant impact on its activity, since an important part of its work is carried out in person at its clients’ facilities. “This pandemic, as it is affecting the entire economy, is also having a strong impact on the ISQ. The drop in turnover will be inevitable as much of the work we do is on the premises of the customers themselves, which is currently difficult to do. We have about 30% of our employees telecommuting”, explains Pedro Matias, the ISQ’s CEO, who also ensures: “Everything that can be done remotely is being done as such in order to protect employees and minimise presence at our facilities”.
Banco de Portugal’s economic projections confirm the negative consequences that the COVID-19 outbreak will have on the economy. In a baseline scenario, Banco de Portugal estimates a drop of 3.7% of GDP in 2020. However, in a more adverse scenario, in which the economic impact of the pandemic is “more significant due to the more prolonged paralysis of economic activity in several countries, leading to greater destruction of capital and job loss” and to “greater uncertainty and more significant levels turbulence in the financial markets”, the drop in GDP could reach 5.7% this year, according to Banco de Portugal.
COVID accelerates innovation processes in companies
For many companies, the solution to overcome the negative effects of the economic paralysis is innovation. “We are focusing on service innovation. The current situation has obliged companies to reinvent themselves”, assures Pedro Matias of the ISQ Group, giving as an example the ISQ Academy, which now offers online training, 100% remotely and in real time, in e-learning or in collaborative virtual environments. “[At the ISQ Academy] we talk about training and increasing skills (whether in electricity, energy, gas, maintenance, robotics, innovation, management systems…) and we talk about soft skills (customer services and people management), developing solutions in customised formats, tailored to the needs of each client”, says the CEO of the ISQ. Pedro Matias also highlights the new service that the ISQ has implemented to support the fight against COVID-19 and which allows to ensure that medical devices (MD) and personal protective equipment (PPE) meet the requirements of the European Union (EU) regulations.
The rapid response and readaptation of companies to the new context is also one of the positive factors pointed out by Ricardo Parreira, from PHC Software. “We did what must be done in a crisis: we responded and adapted quickly. We started very early when we adapted our biggest event for Parceiros PHC, PHC Open Minds, to a digital format, which forced us to redefine all the work of five months in two weeks”, explains the CEO of the technology company. Ricardo Parreira also highlights the fact that the company has launched an extension in its software that allows for the calculations that companies have to make in order to respond to the measures implemented by the Government to be simplified. “We have also launched a special programme to support our Parceiros PHC community, and we are very focused on sharing information with companies that helps them to better deal with this situation. We even have a page with useful information, free webinars and articles, which can be consulted on our website.”
The impact of the current context on the future of companies
Businessmen and economists agree on one thing: the COVID-19 outbreak has changed paradigms and introduced profound changes in the economy, which are here to stay. “It is difficult to make a very accurate prognosis, but one thing is certain: we will enter a new normal. The digitization of companies will accelerate, telecommuting will grow, new habits will be formed. And software will increasingly be the piece of the puzzle that allows all of this to be possible,” says Ricardo Parreira of PHC Software. And he adds: “The country will not stop and good management practices and responsible decisions will be increasingly decisive – not only to face the crisis, but also as a competitive advantage when we leave it. It is essential that companies do not dismiss their employees, because they preserve internal knowledge, because they preserve the economy and also because it is their social responsibility to secure jobs. Whoever makes the decision not to dismiss people will come out stronger post-crisis”.
Pedro Matias from the ISQ also has expectations regarding the future of the economy: “Some companies may close, but, at the same time, others may appear with a different type of business. The human capacity for innovation and adaptation is amazing”.