Ajay Banerjee, an employee of a very well reputed company of Bangladesh became a victim of company downsizing during this pandemic. He made an appointment with the Chief Executive Officer of the company and made an emotional appeal in the appointment request mail, saying, "I am at my mid-50s now. My children are yet to complete their education. My wife is a homemaker. I am the only bread winner of the family. I have bought an apartment and a car with a bank loan and having to count installments every month, which will roughly need another three years to be repaid. My elder son will complete his master's degree in 2022. At this stage, survival will be at stake without a job. Kindly reconsider my case."
In fact, this is the voice of so many more who have become the victims of the Covid-19 pandemic and business instability.
Raushan Ara is a woman entrepreneur. She applied for a loan in one of the public sector banks. The banker, seeing her background, gave her very high hopes and promised to disburse the loan within the shortest possible time. Raushan, however, very stressed out and petrified by the pandemic-induced business shocks, felt somewhat relieved by the assurance. Unfortunately, as promised, the bank didn't disburse the loan amount in the last six months. To make things worse, she had to spend quite a significant amount of speed-money in different stages of loan processing to different people in order to expedite the loan sanctioning.
Rashed Farhad, an employee of a private company, did not get his salary since last six months or so. He knows that the company owners are honest and trying their best. But somehow, they couldn't manage foot the employee salaries. Like him, few other staff of the company are also trying to stick with the company during this hard time. But the question is for how long can they survive without monthly salaries? Now, Farhad has a crisis and he is in dire need of money. His loyalty to the company during the tough time cannot bring peace to his family. As a result, he has to become sandwiched between loyalty towards work and family.
The above scenarios are quite common in today's pandemic-plagued world. Frequent mutation of Covid-19 is constantly threatening humans. Every time it is coming back with greater vengeance and destructive power. Life, economy, business-all have taken the backseat.
Businesses are bruised, social systems have started to break, economy is melting down and as a result survival has become uncertain for thousands of people. Due to depletion of income, people are struggling with livelihood issues. Amid such monumental crises, fixed income people are facing the merciless pressure in the hands-on house landlords, utility service providers etc. Banks are threatening to send legal notice if/whenever someone is failing to pay installments despite government instructions to the contrary.
Experience being compromised:
In the New Normal times, few changes have taken place in the world of business. In the corporate world, nowadays, "experience" doesn't add much value. Big enterprises are worried to keep up the business flow. As a result, they are thinking of company downsizing. When management talks about downsizing, they target the seniors with experience and high salaries. Unfortunately, they are not foreseeing the future of the company. Young, dynamic but inexperienced and less paid employees are replacing the experienced ones almost everywhere. They, however, can run the present, but do they have capabilities to contribute towards a secured and competitive future for the companies? Probably, the will be 'no'.
Multi-tasking or multi-failure?
In the new normal business world many new theories are changing the mindset of the people. Most companies, these days are planning to do more with fewer employees and they are being asked to work harder and for longer hours. Multitasking seems like a great way to get a lot done at once. A majority of people in the office spend their time bouncing back and forth between tasks, believing that multitasking is making them more efficient. However, it is also coming back as a boomerang.
New studies have found that multitasking is no longer a skill to brag about, but it is fast becoming a thing to worry about. These studies suggest that multitasking causes us to actually make more mistakes, retain less information, and change the way our brain works, leaving everyone wondering "to multitask or not to multitask." They say our brains are not nearly as good at handling multiple tasks as we would like to think they are. In fact, some researchers suggest that multitasking can actually reduce productivity by as much as 40 per cent.
SMEs battered and bruised:
Small and medium enterprises are suffering the most during this time. This sector contributes 20.25 per cent in our GDP growth and accounts for 35-40 per cent of our employment. A recent study suggested that almost 96 per cent of micro, small and medium enterprises (MSMEs) in Bangladesh lost income during the Covid-19 pandemic. MSMEs in the country reported a median loss in business of 82 per cent during the lockdown and customer tread reduced by an average of 67 per cent.
To understand the evolving state of small enterprises during pre, par, and post-lockdown periods, BRAC Institute of Governance and Development (BIGD) in collaboration with Monash University, Australia conducted a survey on small enterprises, mostly light-engineering firms, and young workers across 18 districts in Bangladesh. The study finds that during pandemic, lockdown caused majority of small enterprises to shut down, and during the early period of relaxing the lockdown, one-third of the enterprises were operating with a limited capacity. Demand drop and the burden of fixed costs to run the businesses were the prominent reasons behind the drastic fall in profit. As a result, workers were losing jobs and the gender gap was widening, because female labour-intensive work (i.e. beauty salons, tailoring) were affected harder. Other findings of concern include the emerging vulnerabilities for the enterprises with lower endowment and poor access to government stimulus packages and other financial support.
Business confidence down:
Business confidence has also suffered a jolt during the pandemic. The number of confident entities in business dropped to 41.39 per cent from April to June 2021 from 57.90 per cent in January-March, 2021 (as per Business Confidence Index BCI).About 39.02 per cent of the micro and small enterprises, are now confident about their business in upcoming months. Nearly 57 per cent of them were found to be confident in the previous quarter. In the medium businesses, the confidence level is positive for 40.83 per cent. It was 56.79 per cent during the January-March period of this year. On the other hand, 46.61 per cent of large firms are still confident enough about their business though it was 60.88 per cent in the immediate past quarter.
Interestingly, there has been a rise of women entrepreneurs in the world of business during pandemic. Many women started online-based business by using social media as their marketing platform. The female online entrepreneurs are playing a critical role in the digital economy through creating employment and promoting entrepreneurship among young Bangladesh women. Research shows many of these women may have lost their jobs during pandemic or they started a side business as they had virtual work option during lockdown.
If the present situation continues, Bangladesh's GDP which has an exponential growth of 8.15 per cent would be slowing down significantly. According to the Economist Intelligence unit (EIU), the decline of GDP could lower down to 4 percent. Of course, the hardest hit would be the small business sector. This sector contributes 20.25 per cent in our GDP growth and accounts for 35-40 per cent of our employment. However, per capita income in the fiscal year 2020-21 (FY21) has risen to US$2,227, which is higher than that of many neighbouring countries including India. This success of the government to maintain the macroeconomic stability has been praised by the international community.
According to experts, not everyone has benefited equally from the nation's impressive growth and development because of rising income and wealth inequality. Government focus remains stronger on maintaining mostly macroeconomic development rather than ensuring micro stability.
Rezina Sultana is Managing Director of SkyPower and FlyDhaka Cargo Freighter Services, Bangladesh.