Introduction
The COVID-19 pandemic presented huge concerns globally at the start of 2020. To limit the spread of the disease, the government had to enact several measures and lockdowns to curb the spread of the virus. The COVID-19 epidemic had a rejuvenating effect on small business sectors, putting the economies of the affected countries in jeopardy (Birinci, 2020). The enterprises are crucial in the United States as they account for about two-thirds of the new jobs. In 2017, the small organization made up 99% of all the businesses in Australia, accounting for 62% of total employment and around 56% of the total revenue (Birinci, 2020). Small enterprises are the economic backbone of several countries globally as they play a significant role in long-term development.
The COVID-19 pandemic has damaged medical institutions and had a significant impact on business formation. Large and small businesses have been hit hard by the pandemic, both financially and human resources. Business owners and their HR helpers couldn’t handle the influx of unemployment, sick pay, or severance pay. It fell, in general, on the shoulders of the IR and ER as a heavy burden. Specialists in these areas face a considerable responsibility to thousands of employees with different qualifications, experience, and education. Using the example of Australia and its small businesses, this study details exactly what challenges workers have faced during the COVID-19 pandemic. Some of the difficulties faced include job insecurity, wage regulations, and unemployment. Job security, both objective and perceived, negatively affects wage fluctuations. In addition, employees with job uncertainty are unlikely to settle in the organization, thus, increasing employment rates. These are serious issues that require careful consideration and affect the global formation of business.
Issue 1: Unemployment
In March 2020, the unemployment rate spiked, and the numbers were enormous by April. During this period, many individuals quit labour, ideally 62% of the population (Birinci, 2020). The decline in the labour market was influenced by the numerous mandatory or advisory stay-at-home orders issued in response to the COVID-19 pandemic (Article 28). The impact on small organizations was adverse, as a lower production rate led to some organizations closing or laying off employees to combat the crisis (Article 1). The COVID-19 pandemic influenced both men and women during different periods of the problem. According to research, the initial strategies to curb the virus from spreading targeted jobs dominated by women, such as personal services (Birinci, 2020). At the resumption of the virus, a higher prevalence of the virus correlates to high rates of women’s unemployment.
Unemployment has become a considerable problem for the whole HR system, which pandemic circumstances forced to work in a stalemate. Dramatically changed conditions in the labor market moved the HRM to treat candidates in a new way, considering the skills of remote work and the ability to organize one’s work independently of the team and managers. New skills have become essential for the HRM; the global system had to be reorganized entirely at the beginning of the pandemic not to work in offices but to work remotely, where employees would be in their homes, next to their families (Article 20). The researchers point, in particular, to the negative impact of the pandemic on working women (Article 29). It left an imprint on the work and internal processes since the HRM needed to show humanity and understanding to the employees (Fontinha et al., 2017). In an atmosphere of constant concessions, both the HRM, in general, and the IR and ER developed.
In the context of the pandemic, workers were in particular need to be treated fairly, and IR systems were helping to do just that across Australia. According to the Australian Bureau of labor, men account for more than 70% of manufacturing workers (Almeida & Santos, 2020). In addition to the standard risk, these men exposed themselves to a new chance of contracting a deadly virus. In addition, realizing this, the directors were forced to fire many of these men, realizing that they could not provide them with a healthy atmosphere. COVID-19 restrictions, primarily related to distance and wearing unique clothing (protective clothing, masks of various types, and sometimes gloves), prevented IR specialists from building a fair attitude towards employees (Article 18). Trade union organizations working in the vertical between the worker and the employer have shifted their focus from support at work to support in finding a new job or unemployment support.
Although men’s employment surpassed women’s in numerous countries, female labor force participation continued to fall rapidly, increasing the COVID-19 employment picture. Women hold a large ratio of tourism professions, which explains why their working hours were minimized considerably in 2020 (Article 16). According to the global tourism company, the sector lost around 2 trillion in export income globally, placing 120 million tourism jobs in danger (Birinci, 2020). The COVID-19 epidemic has triggered unemployment, and recovery efforts should be initiated to reintegrate more women into the workforce (Article 14). Moreover, aid in the rising of small organizations that came to a halt during the pandemic to increase the country’s backbones. The UNCTAD is collaborating with other international companies to evolve better policies and statistics that enable the development of recovery mechanisms to spike gender equality in labor markets and future economies (Article 6). Governments should allocate sufficient resources for the national statistics to provide more gender dissegrated data to examine the economic gender equality in labor markets.
With massive levels of unemployment, the HRM, IR, and ER systems were left face to face with the problem of assistance and fair treatment of workers. The entire HRM system suffered from the urgent restructuring of the hiring process, the need for new skills, and the extraordinary value of those specialists managers previously perceived as on par with others. Through unions and other organizations in Australia, IR has been trying to ensure that workers who are not at fault in the pandemic are treated fairly. Forced to leave their jobs, people felt a total injustice, and the IR systems had to smooth things over. They could provide workers with the opportunity to work elsewhere or part-time (Almeida & Santos, 2020). Some employees got a fair chance to retrain and gain new skills.
ER plays a critical psychological role for employees in this system since specialists in this field can record the mental state of their employees. The pandemic has hurt the physical health of people and their minds. The number of disorders associated with depression and anxiety has increased. It has become crucial for ERs in hospitals or other medical-related settings, as doctors and nurses have come under severe pressure (Article 12). As part of the ER assistance, workers are still strongly encouraged to contact psychological protection services or sign up for psychotherapy (Article 10). Part of the financial burden in this regard can be taken by the director or the HRM department.
Issue 2: Job Insecurity
The pandemic has made the problem of inequality very visible, as not all of the workers who spend years working and benefiting society have been able to receive equal support. Related to this support is that HRM could no longer offer its employees secure employment conditions where employees would be protected from sudden dismissal, for example (Fontinha et al., 2017). HRM, which is usually famous for its guarantees and ability to adapt to work with people as with machines, has become a precarious system.
Realizing that the economy does not play into the hands of the whole HRM system, IR and ER began to offer protection mechanisms within their capabilities. These protection mechanisms probably meant nothing to people who could lose their jobs while having families and children (Article 2). However, this consolation remained; the HRM system could not afford more during the pandemic (Article 5). Workers were particularly vulnerable during the lockdown period as their employers, essentially small companies, quickly shut down their businesses (Article 7). It showed how many small companies depend on significant ones, especially government support (Georgiou, 2021). Local companies can be very popular with a limited clientele. However, during the lockdown period, this clientele failed to protect their favorites, even if, in regular times, they spent a lot of their hard-earned money on them.
However, systems such as IR can guard labor laws and thus protect workers in any enterprise. Following this, IR systems use universal rules for workers in difficult situations (Islam & Al-Shams, 2021). Nevertheless, universal rules do not always help specific categories of workers. That is why it is beneficial to hire legally savvy employees or HR lawyers among the HRM systems. Labor legislation has changed, having survived several lockdowns, and now regulates working days in remote modes (Article 3). Concerned about workers’ rights, the IR proposes to limit the possibilities of communication with fellow workers outside of their working hours. So, for example, if the employee’s work time is 10:00-19:00, they do not have the right (purely legally) to disturb colleagues and superiors on work issues at 20:00 since this is his free time from work. It doesn’t matter where he is physical, in his room where he works remotely, or outside of it (or outside of his home). This fantastic accomplishment of IR was achieved during the lockdown period to protect employees.
Countries whose economies are based on the service sector have lost many jobs and have not been able to secure all their workers. It is the reason for the increase in insecurity at work, as, indeed, many people work in the entertainment or service industries (Maheshkar & Soni, 2021). These areas mainly involve communication with people and face-to-face meetings (Article 11). Subsequently, this became impossible, or at least very complicated. The HRM system did not immediately but was able to show flexibility and move the service sector into using computer technology (Article 9). Therefore, now different people can see a very advanced system of electronic assistants who can call or write to clients to instruct them on the proper matter (Islam & Al-Shams, 2021). Call center vacancies continue to be essential for recruitment and HRM.
Worries and concerns about employment status have been more salient. The pandemic has exacerbated the employment situation, resulting in a more widespread sense of uncertainty in Australia and a perception of job insecurity among workers (Article 13). Evidence has been gathered to show that, in reaction to the epidemic, household inclination to save has increased in proportion to both unemployment rate expectations and the rate in 2020. There are inevitable consequences on consumer behaviour, with a 30% decline in private consumption in 2020 compared to 2019 (Article 15). Furthermore, the patterns continue into 2021, as the European Commission reports that, despite significant savings, households choose to spend less on vital things in 2021 than they did in 2020. Concerning COVID-19, recent increases in job security views appear to correlate with smoothing increased savings and expenditure resulting from preventive consumer behaviours.
During the epidemic, some possible decreased consumer behaviour includes actual economic hardship caused by reduced working hours. This could be due to demoralizing and pessimistic media coverage of the pandemic’s effects on organizations and the economic crisis, such as an enlargement in the number of unemployed individuals as a result of the closure of economic activities such as restaurants, shops, and firms, and multiple company firings (Article, 17). Indeed, the COVID-19epidemic has created new inequities, magnifying the social distribution of economic vulnerability and aggravating previously existing social inequalities.
Job security is characterized as the possibility of losing one’s current job. Because it involved a person’s interpretation and impression of the work environment, it was a subjective experience. It pertains to the fact that people in similar situations may experience different stages of job insecurity (Article 19). Job insecurity is likely to be a significant factor for Australians who have lately experienced a crisis due to the COVID-19 outbreak (Raju Archana, 2021). The need for security can be combined with their desire to have progress and advanced experience in their career. Even pandemics will remain in employment in their organizations, and wages will be paid.
Thus, the role of HRM when it comes to job insecurity and crisis is to ensure that the individual perceives their jobs are secure. The HRM should effectively ensure that people have access to their organizations and that their rights are the government. They cannot be just laid off from work; specific procedures or protocols will be established. However, if they are abruptly laid off, the organization should pay off, determining the agreement terms with the employees as a measure of compensation. It is hypothesized that if workers perceive investment in career-oriented HRM activities, they will perceive greater job security. As a result, a robust set of career HRM practices is likely to affect job security positively.
Issue 3: Wages
The pandemic has changed the calculation of wages, negatively affecting the incomes of low-skilled workers. Civil servants and public sector workers have increased their earnings (Szulc-Oboza, 2020). However, the HRM in many companies adheres to the position of changing wages (Article 24). Some believe that salary stability is much more important than its size; they lower it, promising employees permanent payments (Article 26). Sometimes this corresponds to a fair distribution of resources among employees. In other situations, this is not enough to cover the expenses of employees, and such a decrease in wages may look like a mockery.
Wage assistance and limited salaries are likely to have played a vital role in minimizing the impact of the COVID-19 epidemic on rising income disparities. After more than a year, there is still a lot of uncertainty about the path to economic recovery (Article 23). Wage levels are crucial in aiding the country’s inclusive and quick recovery (Raju Archana, 2021). On the one hand, wage-setting policies should successfully respond to new legislation to lessen the effects of unemployment and job security (Article 8). At the same time, maintaining pay levels is critical to meeting demand and incomes (Article 4). Equaliting the two elements is a challenging task, as speculated through the problems social partners and government face when negotiating or deciding on minimum wage exhilaration and renewing the agreements.
Wage’s issue is very closely related to security, as it is related to standard payments and social packages. IR systems should advocate for the protection of workers in economic and legal terms (Wang et al., 2022). Special commissions and trade unions have the right to constantly demand benefits and monetary compensation from the government (Article 27). Locally, opportunities for workers to work and earn overtime should be considered, as they could have sick relatives (Article 25). Public-sector wages have risen, which is a testament to the state’s ability to provide compensation (Article 21). ER systems can study the internal needs of employees and whether their salaries are enough for them (Article 22). It is also necessary to find out what social packages or payments they specifically need (Article 30). If the organization has a poor financial background, fellow workers may be offered preferential health or development services (self-development or skills development).
Conclusion
The COVID-19 pandemic has caused havoc on small enterprises all around the globe, especially in Australia. This research aimed to demonstrate the impact of COVID-19 on small organizations in various areas, such as job instability, unemployment crises, and wage regulations. As a result, the critical challenge for the small organization has been identified as lockdown. It significantly affected all the three areas mentioned related to small enterprises encountered. Due to the rise of the pandemic, there was an increase in job instability and advancing unemployment, and poor economic regulations were set on wage distribution (Yo el & Anshori, 2018). In this context, good financial stability and government support are vital for overcoming issues in small business enterprises and continuing irreversible growth.
Moreover, the COVID-19 pandemic has provided an excellent opportunity to develop and use digital channels and innovative capabilities. HRM and IR have proven essential in organizations as they play significant roles. Their roles are inductive as they help stabilize the economy when a pandemic hits a country. Moreover, when it comes to unemployment and job security, they ensure that a person is not just laid off from work and they are compensated in terms of the contract agreements. Wage regulations are maintained where they ensure that worker rights are upheld. Thus, small organizations should use HRM and IR effectively to avoid the past occurrences experienced during the COVID-19 pandemic.
The HRM allows, in general, to have basic information about the labor market and workers and their needs. In addition, HRM covers the entire recruitment cycle and its details, the slightest changes in the labor market, and requirements for candidates. IR helps to explore the needs of already hired employees, which can be met with trade unions, labor commissions, legal organizations, and government involvement. The economic and legal issues associated with protecting co-workers from being fired and the excessive exploitation of their skills and health are the burdens of the IR. ER investigates the involvement of employees and their condition during work. ER addresses atmosphere, team, job satisfaction, and pay issues. In addition, ER and specialists in this field help employees grow and develop, even in such difficult conditions as the COVID-19 pandemic.
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