The second half of 2022 will force company leaders to adopt an austerity plan, in the context of the accelerated increase of energy or fuel prices, but also in the current conflict in Ukraine context. Thus, in some industries, marketing budgets or certain bonuses for employees may be waived and there will be cases where even restructuring processes will take place, according to an analysis by the HR and organizational transformation company Arthur Hunt Romania.
According to the latest JP Morgan forecasts, the European economy GDP is expected to grow by 3.2% in 2022, although the estimates before the conflict in Ukraine showed an increase of 4.1%. Russia’s economy, however, would suffer the most, under unprecedented sanctions and could see a 12.5% drop in Gross Domestic Product this year. At the same time, Western Europe is talking about inflation below 5%, but our country could have double-digit inflation, according to Arthur Hunt Romania’s analysis. This impact will be felt especially in industry, a major contributor to the country’s GDP. Therefore, before the transformation, which is a complex and long process, companies will go through a stage of adaptation, which in the first phase will involve freezing investments and costs. That is why the funds available through NRRP (National Recovery and Resilience Plan) must be exploited with maximum professionalism and without bureaucratic obstacles, according to Arthur Hunt specialists.
“The problem in Romania is the way these restructurings are done, usually quick & dirty, with more emphasis on costs and less on the socio-emotional impact. Some of the companies treat this process correctly – either with internal resources or with the help of specialized consultants, to further ensure their long-term reputation and integrity, so that they can attract qualified labor again after the situation stabilizes”, says Sorin Roibu, Managing Partner Arthur Hunt Romania.
At present, businesses with exposure in the conflict zone are involved in finding solutions for directly impacted employees or drastically reduce costs, to minimize losses in those markets. From this perspective, the type of management needed now is crisis management and managers and leaders with such skills must be secured or brought into companies if they do not exist, experts say.
“The opportunities that may arise from the relocation of businesses from Russia or Ukraine, will deliver results only in 2023, especially in the agricultural and automotive fields. Employer branding, leadership and new skills development programs should now be in focus for companies,” said the company representative.
At the same time, cyber vulnerability is extremely important, which affects business processes for a long time in some cases, so that more attention will be paid to securing information by implementing solutions, often expensive.