What should businesses do to take advantage of the opportunity?

Some economists believe that domestic businesses, especially small and medium-sized enterprises and startups, should focus on training their staff and adopting technological solutions to turn business ideas into reality…

Part 1: “Adversity breeds ingenuity,” businesses must change to adapt

Is reducing staff a wise move?

To survive the pandemic, many businesses have chosen to reduce their workforce to ease the burden of payroll. However, Mr. Tran Quang Thang – Director of the Ho Chi Minh City Institute of Economics and Management – believes this is only a temporary solution when businesses can no longer bear the financial strain. And even when downsizing, businesses should still retain key employees, continue training, and prepare for long-term development, as this is the most crucial factor in building strength and laying the groundwork for the company’s next phase of growth.

A report on the “Labor Market during the 4th Wave of Covid-19: Current Situation and Future Direction” recently published by Navigos Group shows that approximately 49.9% of businesses did not reduce staff and maintained the same salaries and benefits as before the pandemic; 11.6% of businesses continued to increase recruitment during this period. Specifically, most businesses in the finance, banking, insurance, and information technology sectors did not reduce staff and maintained salaries and benefits, with information technology being the industry with the highest recruitment demand.

According to a survey on post-pandemic production recovery plans, 56.7% of surveyed businesses will recruit immediately after returning to normal operations, of which 50% of surveyed businesses will hire entirely new employees.

Dr. Vo Tri Thanh, Vice Chairman of the VEC Economists Club, stated that staff reduction is the last resort among cost-cutting measures for businesses. However, it seems that Vietnamese and FDI enterprises handle staff reductions very differently.

For FDI enterprises, they often communicate to their employees that the layoffs are the company’s fault, not the employees’.

“The lesson here is that the conduct of corporate culture is very important,” Dr. Thanh emphasized. In addition, he also expressed the view that businesses must restructure and change, in addition to just holding on.

Many economists also argue that among all input resources, human resources have a distinct nature compared to others. This is the commodity of labor – a special kind of commodity. Resources like finance, raw materials, and machinery are objectively invariable. Human resources can change positively or negatively depending on many subjective factors.

During a crisis, CEOs often tend to cut human resource costs – this is well-intentioned but not wise or appropriate, as these actions will significantly deplete human resources. Therefore, instead of cutting investment in human resources, companies need to continue investing wisely, as this is the factor that directly operates and helps the business overcome the crisis. Once the workforce becomes demoralized, there will be a lack of engagement, which will exacerbate the crisis.

This shows that CEOs need to invest in and be “sincere” with their staff so that both sides can work together to overcome difficulties.

Pivoting to Products Society Needs

The COVID-19 pandemic has created many challenges and difficulties for businesses. However, this is also a time that opens up many opportunities for startup ideas and projects to seize the moment and find new directions that align with market demand.

Some economists believe that domestic businesses, especially small and medium-sized enterprises and startups, should focus on training their staff and adopting technological solutions to turn business ideas into reality. To clear global supply chains, many businesses in Vietnam have focused on leveraging the advantages of digital transformation and have been relatively successful, creating breakthroughs in production and business. Through these efforts, many businesses have risen to establish their brands, signed major contracts to sell goods to domestic and foreign partners, and gradually participated in the global product supply chain.

Mr. Pham Duy Nghia – Director of Vietfoot Travel – said that after the impact of four waves of the pandemic, Vietfoot Travel is fortunate to be among the 10% of tourism businesses still in operation. The company has accumulated certain financial potential, owns a building that serves as its headquarters and is rented out, which is a source of income for the company’s staff at the present time…

This good fortune did not come by chance. During the pandemic outbreak, the company took the opportunity to systematize all its outbound products, redesign the entire website, design products and programs, and systematize partners in European, US, Australian, Russian, UK, Japanese, and South Korean markets to be ready for deployment as soon as the pandemic is under control. At the same time, the company has developed a plan to expand its inbound segment, creating products to be ready to serve tourists coming to Vietnam in the near future.

Mr. Pham Duy Nghia emphasized that the pandemic is currently causing the tourism industry to be “frozen,” but this is just a pause in a long journey. Businesses that “survive” and are well-prepared for the next phase will have a significant advantage to break through. Because after two years of the pandemic, the demand for vacations and exploration among tourists is immense. At this point, the businesses that seize the opportunity will be the ones that succeed.

Ms. Trinh Thi Ngan, Head of the Advisory Board of the Hanoi Small and Medium Enterprises (SME) Association, stated that the city currently has 70 operational industrial clusters with a total of 4,169 businesses and production facilities, employing approximately 62,000 people. There are 18 concentrated industrial clusters attracting about 1,500 medium and large-sized enterprises; the remainder are craft village industrial clusters with small-scale production, individual businesses, and household producers.

Through surveys, the SME Association found that most businesses face common difficulties with capital for maintaining business operations, paying salaries, and covering employee insurance. Logistics costs also significantly impact import and export activities. Additionally, costs related to COVID-19 testing, disinfection when delivering goods to other provinces and cities, and the early rollout of vaccinations for workers are also major concerns for businesses.

In addition to accelerating widespread vaccination for workers, Ms. Trinh Thi Ngan suggested that businesses need to develop creative solutions to ensure workplace safety is sustainably maintained, mobilizing specialized teams to shape, build, implement, and monitor the strategy. She also encouraged businesses to evaluate four key areas before bringing their workforce back: Health and safety, job types, finances (costs and revenue), and employee needs.

Sharing his perspective on this issue, Mr. Shawn W. Tan, a senior economist at the World Bank in Vietnam, noted that to overcome the current challenges, many businesses have significantly focused on accelerating digital transformation, creating a widespread trend in the market. Numerous companies in diverse sectors like retail and services have transitioned from traditional business channels to e-commerce. In reality, most businesses considered pioneers in digital transformation, who believe that innovation is the key to quickly overcoming challenges and seizing market opportunities, are the ones that have remained resilient and recovered faster than others from the crisis./..

Source: toquoc.vn