How does Belarusian business react to crisis?

During the crisis, Belarusian enterprises are mostly trying to reduce costs and lower prices.

During the crisis 82.4% of entrepreneurs are trying to reduce costs, including those related to human resources. 33.3% of Belarusian businessmen are reducing prices. At the same time, 22.3% of businessmen leave the prices unchanged. 19.6% of their colleagues are reducing production, while 6.1% of traders are taking other measures. This data was obtained from a survey conducted by NOVAK Axiometrical Research Laboratory of IPM Research Center in April and May 2016. All in all, 400 representatives of small and medium-sized private enterprises – their directors, owners, and key personnel– were interviewed.

Businessmen also spoke about the specifics of reduced costs in great detail. In particular, 51.2% of respondents reduce costs, not related to the use of labor. However, 50.5% of respondents admitted about the reduction of salary components – bonuses, awards, benefits, etc. 33.1% of businesses reported the adjustments in working time of their staff. At the same time 25.8% of respondents told about the reduction of temporary employees, and 23.9 – about a decrease in employee salaries. 20.4% of respondents reported the reduction of permanent employees. Thus, for now the dismissal of staff is the most unpopular measure among Belarusian entrepreneurs.

However, the data about the dismissal has also been studied by sociologists. It turned out that the vast majority of layoffs in 2016 (52.3%) is made by workers, that is, the people who are directly involved in the process of creating production, as well as those engaged in repair, shipping, transportation of passengers, and others. Workers are followed by employees engaged in paper work, accounting, and business services (25.2%). 13.6% of respondents admitted that the executives were made redundant – top, middle and lower-level managers. The smallest number of the layoffs (8.9%) made specialists – workers engaged in engineering, technical, economic, and other works.

At the same time 55.4% of representatives of small and medium-sized Belarusian enterprises reported that they didn’t hire new employees in 2016.

However, the crisis continues, and therefore we can forecast that the situation at the enterprises, including private ones, will only deteriorate. According to the macroeconomic forecast of IPM Research Center, real GDP will decline by 2% in 2016. According to analysts, in 2017 the decline will stop (real GDP will grow by 0.6%). However, experts believe that it’s too early to speak about the recovery of growth in 2017. They describe the situation in the near future as "a return to stagnation after a fairly prolonged recession."