The job market is ever dynamic; continuously changing as a result of socio-economic and technological development. In recent months however, the changes experienced are neither as a result of economic nor technological advancement, but rather, the health crisis that has altered the daily lives of people around the world.
One of the major effects of COVID-19 on the labour market is the loss of jobs for hundreds of millions of people. In big economies, workers are benefiting from unemployment claims, but the same cannot be seen in developing countries in Africa where governments are grappling with means to mitigate the effects of the current pandemic.
Predictions from the UN’s International Labour Organization (ILO) show that up to “1.6 billion workers in the informal economy – that is nearly half of the global workforce – stand in immediate danger of having their livelihoods destroyed.”
According to the ILO Monitor third edition: COVID-19 and the world of work, with working hours continuing to drop in the current (second) quarter of 2020, the situation is not expected to make a turnaround any time soon.
Amid stay-at home orders executed across the globe, most workers are now working from their dining rooms, couches or beds in the ‘comfort’ of their homes. While some people are enjoying working from home in their pajamas, for others, what was once welcomed as a change from busy schedules at work is now wearing off. Holding meetings over a conference call, and dealing with the relative house arrest has pushed some workers to start yearning for and appreciating some relaxation of lockdowns being experienced in some countries. For many other workers, however, they are either dealing with joblessness or are forced to take less salary following the outbreak of the Coronavirus.
With factories, retail outlets and the service industries shutting down, ILO predicts that if the current situation drags on, the world could lose up to 25 million jobs.
Also Read: 4.4 million Ugandans could lose jobs –Report
Due to these challenges, many employees have found themselves taking a pay cut, if not losing their jobs. If neither has happened to you so far, may be it will or it will not happen; nevertheless, you should be prepared.
“This is the second month taking pay cuts from our employers”, says Anna Maria, who works in the health sector in Kenya, with a husband in the media industry.
“We have had to cut down on some unnecessary costs in the house,” she says adding that because the family is spending less on fuel and transport, the saved money is redirected to other expenses. Moreover, buying food stuff in bulk is also helping to manage the small budget.
“We are trying as much as possible not to dip into our savings at the moment,” she tells the Exchange.
First, it is important to appreciate that these are challenging times and businesses are being forced to make difficult decisions. Instead of laying-off employees, some are opting to temporarily reduce employees’ pay.
Following the shrinking revenues and growing costs, several private hospitals in Kenya are facing financial difficulties, an article in the Daily Nation observed. One such hospital is the Aga Khan University Hospital that announced in May 2020 its plans to review employees’ salaries downwards. The same is happening in the aviation sector where more than 7,000 employees are either receiving reduced pay or unpaid leave.
As of April 2020, more than 400,000 workers in Uganda had lost their jobs following the measures put in place by the local government to contain the spread of the virus, and the numbers are expected to keep rising in the coming months.
In sharing the burden brought about by the global health crisis, President Kenyatta announced a proposition to reduce salaries of senior ranking government executives in early March, 2020. The President and Deputy President would take 80 per cent cuts, 30 per cent cuts for cabinet and chief administrative secretaries and 20 per cent cuts for principal secretaries. Other key workers whose salaries have been reduced include: supreme court judges, and media house staff.
While employees should be mentally and economically prepared for any future eventualities, businesses should practice open communication with their workers. The earlier the employees are informed about a pay cut the better, so as to plan in advance and avoid mental uncertainty.
In an interview with the World Economic Forum, Sharan Burrow, General Secretary of the International Trade Union Confederation noted that the situation calls for people to remain active and connected to have a healthy state of mind.
“The mental health cost of this crisis will play out in the months to come – so I think just making sure people are connected and stay in touch is critical,” Ms. Burrow said adding that the past interactions at work that people took for granted such as a quick briefing, or coffee breaks were essential but “you don’t realize how efficient those interactions can be until you’re trying to manage that remotely.”
Also Read: Global job loss in the next 90 days-ILO
Prioritize short-term goals
Are you currently pursuing long-term goals such as an investment? There is no shame in putting this plan on hold as you try to sort the immediate goals which could range from paying bills, to purchasing food items and keeping some cash aside for an emergency.
The most important thing now is to get on with life with as much ease as possible. Whether you are facing a salary cut or job loss, it is not permanent.
Take time to draw a new budget that reflects your current financial status. With several unrestricted expenses curtailed due to the lockdown, you could salvage some money to keep you going in the next few months.
Finally, keep a positive attitude; remain active by engaging both your mind and body. When there is too much to deal with, seek support from family or professionals where necessary. The pandemic will pass and when it does, there will be lessons to share.