Digital Communication Network begins the series of publications on Digital Challenges in the Time of COVID-19 Crisis.

Research Paper by Natalie Gryvnyak

Background situation with virus outbreak in Ukraine and its influence on employment market

The worldwide Coronavirus epidemic that started in the Chinese city Wuhan at the end of December affected Ukraine substantially. As of 4th May in Ukraine, there are 12,331 people that officially have Covid-19 from 129,723 tested, with 500 people being infected daily (MOH statistics — link/ Center of Public Health). Ukraine was fast to respond to the threat, and was one of the countries that initiated lockdown rapidly. This affected businesses drastically. The Ukrainian Cabinet of Ministers launched a quarantine that started on 26th March, and as of 4th May the quarantine will be continued until at least 22nd May restricting the opening of schools, beauty parlours, cafes and restaurants, small businesses, shopping centers, public gatherings, entertainment events and many other industries will also be affected. As a result 29% of Ukrainian companies have stopped functioning and 6% have fully closed down their businesses[1].

In the inflation report done by the National Bank of Ukraine[2] social polls indicate that 35% of people continued with work in some form, 29% work from home or away from their place of work and 4% lost their jobs, which according to social polling firm InfoSapiens accounts for a -10%[3] decrease. Therefore, according to Ukrainian Prime-Minister, Denis Shmygal, this is 10 times more if it is compared with the employment numbers before the quarantine[4]. Some industries such as transport, food and entertainment have not generated any profits since the quarantine. Those who still work are experiencing a decrease in profits of up to 90–100%. According to OpenData Bot more than 277,000 private entrepreneurs/ small businesses have closed down due to the quarantine. Such an effect on Ukrainian businesses resulted in attempts to change the existing business models to establish new working formats. According to statistics found on Work.ua, the biggest Ukrainian employment portal, the number of new vacancies has decreased, but the number of new vacancies for distant work has increased. Basically speaking the market has divided between those companies who can still function and work within the existing working model and those who can switch to the new distance working structure. The management team of the Work.ua portal has even created a special section on the website for distance work[5]. Some companies were forced to change internal working processes, like cutting personnel or using new technologies. Elena Gapych, an HR expert[6] identifies the situation as having a negative effect on Ukrainian business due to high unemployment rates and a big effect on small businesses “Before, I have checked the situation every 3 months, now we try to analyze each two weeks, because there a lot of changes, and changes are coming fast, because it is all related to people, who should be paid. Our economy has been collapsing, and Coronavirus made the situation worse. Business thinks how to stay alive. Mostly small and medium businesses have been affected. Those who can bring products online, and they will survive. Customers also should have money to buy products and services”.

In all cases the daily working habits of people have changed, and more digital tools are being used. People were forced to either learn new modes of distance work, or after losing the possibility of work, to try learning new skills.

Natalie Grynyak