Our Taplow partners have been active throughout the pandemic. This is the Eighth in our Business Updates series from our partners around the world. The situation is showing clear signs of recovery although nuances exist in every country and region.

Key Findings

Working from Home: Surveys show that employees are enjoying working from home. But is your business monitoring productivity, employee wellbeing and effects on teams within business?

Employee welfare: How does WFM impact employees? Many of whom maybe feeling isolated, working, and living within small spaces with little face to face interaction with colleagues.

Digital Transformation: Many firms/offices have an enhanced and cohesive digital strategy; but how does that get impacted when the workforce is WFH? Does your business have new strategies to enable employees to be effective in their new workspaces?

AFRICA

South Africa

The WHO's Africa regional director Matshidiso Moeti said it was spreading beyond capital cities and that a lack of tests and other supplies was hampering responses.
South Africa is seeing business reopening, with many planning how to develop their services post pandemic.

ASIA

Australia

Business and economic conditions continue to slowly improve in Australia. The major sporting clubs of football, racing, netball and rugby are all in full competition with spectator attendance, although with revised guidelines for social distancing and behaviour.
The Australian Federal Parliament convened this week in the Australian Capital Canberra with Politian’s attending for both the Senate and the House of Representatives. Six of the eight Australian states and territories are progressively moving towards the new normal of business and one state, Victoria, continues in a hard lockdown for another 3 weeks because of a major second surge of COVID-19.
The Australian Stock Exchange is experiencing an increasing recovery and the major ASX listed companied are now in the reporting season for their results. The Australian dollar has been increasing in value against the American dollar, particularly over the past two weeks.
The Australian Federal government has extended financial support for companies, employees that have been stood down and unemployed.
The Australian Federal Government has made an agreement for the production of COVID-19 vaccine in Australia and there have been very positive announcements of vaccines under development in Australia for COVID-19 and the likely availability in 2021.
The national border remains closed to international travel and majority of internal state borders are also closed.

India

Minister for Road Transport, Highways and MSMEs, Mr Nitin Gadkari to lay foundation Stone and inaugurate 35 highway projects worth over Rs 9400 crore in Madhya Pradesh(State in Central India) on August 25, 2020.
Italy's Snam eyes investments in Indian gas pipelines: Italy’s Snam, the operator of Europe’s largest natural gas transmission network, is planning to invest in the Indian gas pipeline business and has roped in GAIL’s former chairman B C Tripathi as its advisor.
Amazon India launches online pharmacy service: Amazon’s pharmacy plans include rapid expansion into the trillion-dollar healthcare care and insurance sector, creating a buffet of healthcare-related acquisitions, rolling out expedited drug shipping, and drug discounting–and perhaps shaping the pharmacy of the future.
Reliance Industries retail unit has acquired a majority equity stake in online pharma company Netmeds for around Rs 620 crore, directly taking on Amazon which has forayed into the e-pharmacy business.
Hyderabad to host Medtronic's largest global R&D centre outside US: Global leader in medical technology, Medtronic plans to invest Rs 1,200 crore (US$ 170.24 million) in scaling up and expanding its current research and development centre into a modern engineering and innovation hub in Hyderabad.
Ultratech to invest Rs1500 crore in capex in FY21: Ultratech Cement Ltd, India’s largest cement company, plans to invest Rs 1,500 crore (US$ 212.80 million) in capital expenditure this fiscal despite the constraints of an ongoing pandemic, said Mr Kumar Mangalam Birla, Chairman, at the annual shareholder meeting.
Logistics firm Delhivery plans to invest up to Rs 300 crore over two years for expansion: Delhivery, a logistics firm, plans to invest up to Rs 300 crore (US$ 42.56 million) in 18-24 months on expansion, including increasing fleet size and setting up of trucking hubs.
Nifty, Sensex end near six-month highs on coronavirus treatment hopes: Indian shares closed just shy of their six-month highs on Monday, powered by a rally in private-sector banks as more businesses resumed operations after lockdowns and hopes of a treatment for COVID-19 brightened.
India crosses a milestone, conducts more than 2 crore COVID tests

Singapore

Singapore's Ministry of Manpower (MOM) on Thursday (Aug 27) announced a slew of changes to its foreign workforce policy, including raising the minimum qualifying salary for Employment Passes and S Passes for the second time this year and introducing a higher salary requirement for Employment Pass holders in the financial services sector. These new salary criteria will be effective from May 1, 2021. The ministry said that the changes were made to continue to encourage fair hiring, particularly in the current economic climate.
Noting that 90 employers had their work pass privileges suspended this year because of Fair Consideration Framework infringements, MOM said: "Employers are expected to take fair hiring seriously and give due consideration to local job applicants regardless of their age, gender and ethnicity.
"Discrimination against local job applications in favour of foreign applicants is especially unacceptable. Employers who practise discriminatory hiring in any form will have their work pass privileges cut back and may also face prosecution."

New Zealand

New Zealand’s largest city, Auckland will join the rest of New Zealand at Alert Level 2 on 31 August following a period of time where Auckland was at Level 3 given the community outbreaks that recently occurred following 100+ days of zero cases reported. The rest of the country has been at Level 2 for the same period and will remain so for at least another week. This has had a major impact on domestic travel with one of the larger airlines (Jetstar) suspending all flights until a return to Level 1 and New Zealand’s main domestic carrier Air New Zealand substantially reducing their flight schedule due to the unavailability of almost all travel to and from Auckland.
NZIER analysts predict that businesses are typically more cautious heading into a general election (October 17), as uncertainty over the outcome leads businesses to hold off on planning. This time around, the outbreak of COVID-19 has added much more uncertainty for businesses, with hiring and investment intentions falling sharply. They are expect that businesses and households will remain cautious about spending and investment over the coming year.
The Wage subsidy is due to end 1st September 2020 and the New Zealand Government has signalled that there will be no more assistance at this stage. The New Zealand Government reported that the $11 billion wage subsidy helped nine in 10 New Zealand businesses which received it, survive the COVID-19 lockdown.
Retail sales experienced their biggest quarterly drop on record, while median incomes fell for the first time. Most retail industries experienced a decline in sales volumes, with the biggest falls recorded in food and beverage services (down 38%), motor vehicles and parts (down 15%) and fuel (down 24%). The only industry not to experience a fall in volumes was non-store and commission-based retailing (online sales).

EUROPE

The EU has agreed a 1€ Trillion recovery fund for its 26 member states. A mixture of loans and grants will be offered to European Countries. Many EU countries are seeing an upturn in positive test results and Governments are grappling with stemming these numbers to avoid second national lockdowns that would have major economic ramifications.

France

After exploding in March and April, the number of jobseekers with no activity fell sharply in July in France for the third consecutive month, according to statistics published by the Research Department of the Ministry of Labor (Dares). Specifically, the decline reached 174,300, compared to -204,700 in June and -149,900 in May, bringing the total in this category to just over 4 million people, a level 560,000 higher than at the end of February. As in May and June, this decrease was mainly due to the shift of these jobseekers into reduced activity. The figures therefore remain at historically high levels, but the trends - to be confirmed - show that the recovery in activity is supporting the recovery in employment, even if it is precarious. Thus, the combined workforce of all jobseekers’ categories fell by nearly 45,000 in July to 6.11 million. This is the first decline since March. As employees have returned to work on a massive scale, the number of employees in partial activity in July is being estimated at 2.4 million after 4.5 million in June? Wii this upturn be sustainable? The answer lies on the effect of the recovery plan and its component for youth employment in particular.

France's GDP fell by 13.8% in the 2nd quarter of 2020. After a 5.9% drop in GDP in the first quarter, France officially entered recession at the end of the first half of the year. While the gradual lifting of restrictions led to "a gradual recovery of economic activity in May and then June, after the low point reached in April", the quarter bears the stigma of the obligation imposed on the French to stay at home: consumer spending fell by 11.5%, "which strongly increases the savings rate" (27.4% against 14.9% on average in 2019). The pandemic that has affected most countries in the world has also affected foreign demand, with exports falling by 25%. As imports did not fall in the same proportion (-16.4%), "foreign trade made a negative contribution to GDP growth" of 2.5 points over the quarter. National Institute of Statistics and Economic Studies (INSEE) forecasts a 19% rebound in GDP in the 3rd quarter, but for 2020, the Government is forecasting a historical decline of 11%. GDP is not expected to return to its pre-crisis level until 2022, when growth of 1.4% is expected.

Germany

New assignments have been coming in since the end of June from different areas, namely, Construction, IT, Medical and Public sector. The positive trend has been confirmed by additional client requests and meetings related to a.) a Chinese company that’s interested to start business in Europe and b.) The owner of a German tech-company looking for a successor and guidance during the succession management process.
This change in our business started at least three months earlier and more positive than expected. At this stage we hope for a steady improvement during last quarter of the year and first quarter of 2021, that’s globally supported by positive economic and political news.

Russia

Russia has now nearly one million confirmed corona cases. Nevertheless, the daily infection rates in Russia are decreasing. Due to this some of the staff is going back to office work and we can see an increase in business activities throughout industries.
Surveys suggest that many people like to work from home but at the same time some companies are facing decreasing effectiveness because of this. Therefore, companies are keen to have employees back in office. Big companies are trying to schedule in such a way that just 25% of white collars are in office in order to maintain social distancing. Then they change every week. Those companies that have confirmed corona cases must go back to home office working mode.
A main challenge for international companies with foreign managers and specialists is the travel restrictions. Only expatriates with working visas and included on a Governmental list are approved for entry. However, it is estimated that by October Russia should have a daily infection rate low enough to be considered a non-risk country for the EU, making it possible to travel freely again.
Many companies are reducing staff or at least continuing a hiring freeze. Even the Russian oil industry is holding back hiring and some facilities are closed in Siberia.

Norway

Norway had its covid-19 peak in March but has managed to keep the outbreak under reasonable control.
256 people have died (population 5.4 million)
12.5% tested (673,000). 10,504 tested positive
Focus on 1-meter distance, but not mandatory to use facemasks.
Employees encouraged to work from home
At a cost: Estimated GPA for 2020 will be down 6,5% from 2019
Taplow Norway had a very week Q2. Turnover down 35% from 2019, with a negative EBIT
Fall 2020 seems to be more positive. Businesses are more eager to look forward. We have more assignment-offers out so far in August, than in April, May and June combined.
Taplow Norway is in dialogue with a potential new consultant in the Life Science sector.

UK

Air corridors are constantly being reviewed and this is currently impacting vacations and will impact businesses in Q3 and Q4 of 2020.
Retail sector has seen the turnover return in Q2 2020 to pre lockdown levels.
Separately, a closely watched survey showed that activity in the UK's services and manufacturing sectors has returned to growth last month.
The UK experienced a 20%+ contraction in the economy in Q2 2020, but signs are indicating that this is now being reversed in Q3 2020 and Q4 of 2020.

AMERICAS

The Americas have seen a surge of Covid cases. The worry is that this is occurring in the summer months and will exacerbate healthcare’s ability to deal with cases as the flu season approaches. Canada is the only country seeing a reduction in cases and lockdown rules being eased.

Brazil

According to CEPAL, the UN Economic Commission for Latin America and the Caribbean, pre-pandemic 2020 Latin America economy forecast had shown a modest 1.3% growth for the region, versus current -9.1% estimate. 18 million jobs will have disappeared in the area because of the pandemic. Prior to Covid-19, Argentina’s economy had been severely affected and saw significant decrease in its exports to China and to other countries.
Although Covid-19 still remains active in higher levels than predicted, the Northern and Northeastern areas of the country seem to be well under control now. States of São Paulo and Rio seem to have reached a still high plateau, but the disease seems to be under control. The worst areas now are the south and central states and the interior of the state of São Paulo. The recovery plans for the Greater São Paulo and Greater Rio de Janeiro areas are being gradually executed. Essentially all states in Brazil are enforcing the use of face masks and other pertinent precaution measures, now determined by law.

USA and Canada

North American markets have been very measured during the last almost 90 days, i.e. since the covid19 disruptions and lockdowns have been in place. Several phenomena are noticeable.
Current executive search and consulting assignments are moving slower as our clients are being very measured about adding to staff and our team’s availability to participate in consulting efforts has been limited. New roles are being actively considered but timing for hiring is still reasonably uncertain. Action oriented consulting on new markets and new approaches to market are moving at a sub-optimal pace.
Some of our clients appear to be using the current environment to release their less successful employees and are being incredibly careful to avoid legal risk with re-alignment of functions.
Opportunities to revise organizational design and realign functions are being hampered by the lack of certainty.
The recent and continuing racial discord is distracting as corporations and faith communities are taking center stage rather than leadership from national or in some cases, state officials.
Cautious optimism is just beneath the surface, but the unnecessary distractions must be mitigated.

We hope that you, your family, and work colleagues continue to stay healthy and safe. We at The Taplow Group are here to support you and your company through this crisis and beyond. We will be back with another update soon.