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The Polish Labour Market Beyond Covid-19

The Polish labour market as it was in January 2020 and the one that exists six months later are two different worlds.

This year began with an unemployment rate of 5.5%. The shortage of employees was one of the biggest challenges of the Polish labour market in 2020. The problem with the shrinking pool of skilled workers was associated with an outflow of specialists deciding to work abroad. An exodus of non-EU workers, increasingly choosing other European countries as offering more attractive wages, was also expected.

According to ZUS, the Polish social security office, in the fourth quarter of 2019 over 470,000 Ukrainians were legally employed in Poland. Employers, especially from the construction and manufacturing industries, were concerned that the opening of, for example, the German labour market to foreigners would cause serious problems due to the outflow of Ukrainian workers.

Admittedly, employment in 2020 was expected to grow less dynamically than in previous years, due to emerging concerns about the forthcoming economic slowdown and rising labour costs in Poland. Nevertheless, the Polish labour market was an employee’s market, where the pressure was on employers to compete for employees, who were demanding more and more extensive bonus schemes and other benefits, with HR specialists having to outdo one another to effectively recruit employees and encourage them to stay with the company.

Within a few short weeks, the coronavirus outbreak has completely changed all of this. As early as in April and May, numerous businesses decided to reduce employment. Medium-sized companies and family businesses were the quickest to act. In larger companies, especially those with foreign shareholdings, the decision-making processes concerning employment reduction have been slower. However, even here, changes and employment restructuring can be expected in the second half of the year. Many employers say that the financial support offered by the Polish state has proved insufficient, and not only regarding the amount of funding, but also due to the bureaucracy, late payment of funds, complicated legal regulations, and anxiety that a possible audit of the spending of aid could cause even more serious problems. Consequently, solutions designed to help maintain jobs are proving to be ineffective.

Naturally, there are industries that have not experienced the negative effects of the pandemic-related economic freeze. However, looking at the Polish labour market overall, the near future will see an increase in unemployment and the end of an employee’s market, and challenges completely different than those expected at the beginning of the year.

At the end of May and the beginning of June, the Polish government began lifting restrictions and unfreezing the economy. Many employers announced a ‘return to normality’. But what is this new normal? Is a return to ‘normality’ actually possible?

No matter how much we want to return to ways of working from before the outbreak, it seems impossible. And this has both advantages and disadvantages.

We will certainly have to adapt to new security procedures, work even more effectively and efficiently, so as not to lag behind our competitors fighting for survival, be even more agile, react faster and adapt to market requirements. It is going to get harder.
There is also a chance that something else will change: our approach to communication and confidence.

So far, many employers have resisted the idea of introducing remote working, fearing difficulties in managing remote employees, reduced productivity, data leakage, or loss of loyalty. Due to the fear of losing control over the employee, in many cases the possibility of working from home was seen as a kind of benefit, a reward for the most trusted team members.

The need to switch to remote working because of the Covid-19 outbreak has in many cases radically changed the perspective, both for employers and employees. Many employers have found that remote working performance is comparable to, or even better than, performance levels from before the change.

Certainly, we must consider that the high performance of staff in the first weeks of the pandemic may be due to their strong motivation associated with working in an emergency situation.  Nevertheless, with an appropriate support for employees, working from home can certainly be also as efficient as office-based work in the long term. Thus, there is a chance that employers will naturally change their approach and allow greater flexibility in their employees.

On the other hand, many employees have certainly found that home working has its good and bad sides. Most of us know someone longing to leave home and go to the office, have morning coffee with their colleagues in the canteen, and move away from family matters to business projects.

The challenge of the coming months may be to find a balance and work out solutions which will, on the one hand, ensure work safety in times of the pandemic and, on the other hand, ensure the best working and business development conditions.

A mature employer should recognise the different aspects of remote working. It is a chance to reduce fixed costs by releasing part or all of their office space. Remote working also involves challenges such as the development of new ways of communication with employees, ensuring data security, adequate team motivation and team integration, data exchange and training of new staff members.

Employers should be prepared for the legal risks that remote working may entail. So far, work from home – understood as occasional remote work – has not been regulated in detail in Polish legislation. Many lawyers are against detailed regulations in this respect, arguing that the employer should be free to establish specific rules depending on the unique nature of a given workplace.

Whether or not the legislature ultimately decides to regulate this issue, employers should be aware of certain legal risks. For example, many employees are already signalling they work longer hours when working from home. Obviously, there can be many reasons for this such as more distractions when working from home, technical problems, inability to schedule tasks properly, insufficient IT skills, etc. From the employer’s perspective, however, this means a need to adequately regulate issues such as working time, and reporting and delivery of work results, to avoid future claims for overtime pay.

Ensuring the right conditions for work is another important issue. In the first weeks of the pandemic Polish workers showed great ingenuity in setting their home offices. However, if remote working is to be a long-term solution, support from employers will be required for example to provide appropriate equipment to ensure safety and compliance with workplace ergonomics guidelines. After all, the switch to remote working does not relieve employers from their obligation to ensure a safe and healthy working environment and consequently, from their potential liability for accidents that their employees may have while working outside of the office.

It is difficult to draw an explicit conclusion on the prospects for the Polish labour market in the coming months. The next two quarters may be crucial for many companies, and this will have a direct impact on the situation of their personnel. There is no doubt that in many of the industries most affected by the pandemic, workers will face redundancies and unemployment. However, the less-affected sectors will also face challenges. Making the switch to remote work will require agility on the part of employers, including in their attitude to work supervision and trust. Employees, in turn, will face new challenges such as the need to maintain a healthy work-life balance in the new working environment.

 

By Anna Gwiazda, Attorney at law, partner and head of Labour Practice at Kochański & Partners

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