As the difficult and heartbreaking situation in Ukraine continues to unfold, we set out below how employers have been reacting to provide various supports for their employees in the region, as well as some considerations for longer-term implications.
The Ukraine invasion has triggered a fast-moving humanitarian crisis in Ukraine and the largest displacement of people in Europe since World War II. Amid the tragedy, it is reassuring to see that the immediate focus of many multinational organizations has been to try to ensure that individuals are safe and able to meet their basic needs in terms of shelter, healthcare and education.
A number of employers have used the cross-function crisis management teams and frameworks developed in response to the COVID pandemic, and tasked these teams with providing support to employees and their families who have been impacted by this crisis. Some of the initial steps taken included pay/bonus advances, per diems and other extraordinary financial support, as well as logistical help for those on the move.
Those actions have now expanded as a growing number of Ukrainians leave the country and it has become more difficult to provide direct support to people in Kyiv and other cities. Companies are facilitating onward transportation to other parts of Europe, and trying to ensure that employees and their families are able to connect with the programs established by governments and other organizations to address access to public services, including healthcare and education needs.
It is clear that due to the sheer scale of the task required to meet the human need of millions of people, the overall response will have to be largely government-led (along with vital assistance from NGOs), and that enormous financial resources will be required. So far, the majority of Ukrainian refugees are now in Poland, and the response from Poland and the Polish people has been inspiring. Like other countries in Europe that have implemented the EU Temporary Support Directive, they are providing access to public healthcare, social services and education (a crucial consideration, given the high proportion of children that have fled).
There is a strong hope (as expressed by the Polish education minister) that this displacement will be temporary, and that Ukrainians will be keen to go home to an “independent, free and sovereign Ukraine.” However, the ability to return and the timing of that return are unclear, and this may be a prolonged crisis. There will be considerable strain on those public services in Poland; when providing logistical help to employees or dependents, organizations should consider longer-term planning and whether other locations in Europe may make sense.
Across employee populations, both in the region and further afield, there seems to be an immense pent-up demand to help, and organizations have been quick to recognize that, providing or expanding volunteer days and opportunities to donate through corporate match programs etc. We hear so much about wellbeing initiatives these days, and given that helping others is a recognized way of improving wellbeing and reducing stress, this seems like a worthwhile way of combining multiple objectives.
While the reaction from the corporate world on the immediate issues has been immense and compassionate, the reality is that organizations are also figuring out whether business operations can continue to function and if/when their emergency responses will need to transition into longer-term solutions.
For organizations with Ukrainian operations, the global supply chain and/or interdependent business operations are being actively managed under business continuity frameworks and plans. The availability of internet connections and access to secure working locations is in flux, a large and growing portion of the workforce is displaced elsewhere in Ukraine or Europe, and many others have volunteered or been called up to join the defense forces.
Some of these issues may be addressed through contingent workforces or the capacity to upscale in other locations, in some cases using displaced Ukrainian workers. Decisions will need to be made around business processes and may rely on guidance from internal or external parties around how to continue to deliver on promises to customers most effectively and efficiently.
As a result of both the economic sanctions impacting Russia and the steps taken by many multinationals in regard to Russian operations, companies will have to understand and plan for any dependencies on vendors or business partners currently operating in Russia. A key focus has been on legal compliance; however, as organizations re-evaluate their operations in Russia from an ESG perspective, this will continue to be an area where organizations will need to evolve.
There have been a large number of announcements from organizations that are departing Russia, and many others have voiced an expectation that it may be some time before they are able to restart physical operations in Ukraine.
We’re seeing employers face dual challenges and considerations: first, the question of where displaced employees will be settled longer-term, and secondly, that of where displaced operations may ultimately settle. In some cases those answers may be the same; however, the situation does warrant separate evaluations of the issues, at least at first.
A number of employers are looking at expanding current facilities in Eastern Europe, which may be the most expedient approach but may also present some residual underlying concerns given the threat of continued geopolitical instability. In other cases, employment arrangements may follow a Professional Employer Organization approach, a contracting setup, or direct employment through another country. Each of these approaches has both opportunities and challenges, and the best approach will depend on the specific employer situation and footprint.
Finally, the large number of displaced working individuals raises the question of where these groups will settle and how they will engage with employers in the short and medium term. Supporting and engaging this workforce can be both a humanitarian and a business opportunity for employers who are prepared to react quickly, but businesses need to adjust their approaches as the crisis evolves.
Mercer conducted an employer pulse survey from March 21 to March 28, to capture employers’ current thinking and planning in this important space – results are available here: Russia-Ukraine Crisis Global Survey Real-time Results
Alan Buckley, Global Consulting Leader - US & Canada, Mercer
Derek Cushman, Global Consulting Leader - West Market, Mercer
Sarah Demet, Global Consulting Leader - Central Market, Mercer
Emily Eaton, Global Consulting Leader - US East Market, Mercer
Sarah Fee, Global Consulting Leader - Canada, Mercer