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25 marca 2020

Polish Entrepreneurs Seeking Support: For 83% of them the Business is the Sole Measure of Support for their Family

Press Release, Poznań/Warsaw, March 18th 2020 

Family Businesses Foundation (FFR) asked the entrepreneurs about the status in which their businesses find themselves, facing the coronavirus crisis. The results of the survey are terrifying, to say the least. For 83% of the entrepreneurs their business organisation remains the sole source of income for their family. More than 50% of these organizations cannot last longer than a month, without employment cuts. The most important results of the research conducted have been provided by us to the Polish Ministry of Development that is working on a package of protective measures for the entrepreneurs.

Responding to the call for action issued by the Family Businesses Foundation, in a little over six hours after the survey concerning the economic block, 911 entrepreneurs submitted their responses, hailing from all regions of Poland. The respondents include, micro, small, medium and large enterprise owners. There are hundreds of thousands as such in Poland, as the ones included in the survey.

We have asked the entrepreneurs about the degree of readiness that they exhibit when facing the limited ability to conduct business activities, emerging on the grounds of the current threat posed by the epidemic. We do hope that the officials working at the Ministry of Development will treat the results of the survey with utmost seriousness, and that they will prepare a plan which would make it possible to save as many businesses as possible which would also translate into rescuing of well-being of the owners and of the families of the employees, said Katarzyna Gierczak-Grupińska, President at the Family Businesses Foundation, who initiated the research conducted jointly with Robert Kowalski, Polish researcher working together with the Stanford University.

Business – Basic Support Measure for Families of 83% of the Entrepreneurs

Vast majority of the entrepreneurs responding to the survey did admit that their business also remains their sole measure that they use to support their family. This sentence was used by more than 8 out of 10 business owners.

The businesses have no sufficient cash reserves at hand, to withstand a crisis of greater duration.

As the responses suggest, more than half of the entrepreneurs would not be able to maintain their business for more than a month, without a necessity to introduce HR cuts.

Extension of the economic blockade would force the entrepreneurs to introduce measures that would be more extreme, group layoffs included.

If the limitations imposed on businesses would extend beyond the end of March then many businesses, facing lack of orders, will not be able to survive another month. Comparing the necessity to introduce layoffs in late March to the very same need in late April, it is clearly visible that prolonged limitation would double the number of businesses that would be forced to terminate their contracts with all of their employees. Also, the number of businesses that claim that they would not fire anybody by the end of March would go down by 50%.

Remote Work – Not for Everybody

For more than 40% of the businesses that our survey reached, remote work is by no means an alternative solution. Furthermore, we shall note that 60% of the respondents would be unable to deliver their goods, and services they render, without contacting the client directly. These businesses face the most serious threat, when it comes to the current crisis.

What can be done to help the entrepreneurs? Waiving the fees

Waiving the social insurance contribution obligation has been indicated as the most effective means of assistance in our survey. More than 80% of the respondents would like it to happen. 60% of the respondents indicated tax relief as a preferable measure. Sick pay subsidy has been listed third. In normal conditions sick pay covering the first 33 days of employee absence may be disputable, but it is not really a burden the entrepreneurs cannot handle – in circumstances when most of the employees need a sick leave, this may even lead to insolvency.

– Our first recommendation for the government is to order the Polish Social Insurance Institution to take over the sick pay burden from the entrepreneurs, from the day one. As for now, the entrepreneur needs to cover the cost of such absence twice; first he/she needs to pay his social insurance contribution, second, he/she also needs to pay the employee, even though no work is done. The payment could even be needed three times if, should contractual obligations exist, the entrepreneur would need to employ somebody to replace the missing employee or to pay overtime pay to some other employee, handling the additional burden, said Katarzyna Gierczak Grupińska. Currently, this may be one of the main reasons for which many businesses may go into bankruptcy, especially in the manufacturing sector, she adds. 

Download the report

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Do you want to know more? Contact us:

Katarzyna Gierczak Grupińska

President at the Family Businesses Foundation

kasia@ffr.pl

+48 500 297 097

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