The impact of the COVID 19 pandemic has flowed into many parts of REACH’s operations. REACH was aware of the emergency of the crisis at a very early stage and consequently adopted a range of measures to respond to the situation.
Vietnam was one of a few countries that successfully handle the COVID-19 crisis. This helped Vietnam avoid our national medical system being overwhelmed.
That said, the pandemic has impacted heavily on Vietnam’s economy and pushed the country in a serious employment crisis.
The long lockdown in important trading partner countries of Vietnam, as well as the downturn of the global economy, has led to a significant decline in the number of orders from Vietnam.
According to Vietnam’s MOLISA, nearly 8 million Vietnamese laborers lost their jobs in the past months plus 17 million others were forced to reduce their working time and income.
The number of businesses closed was about 30,000 in the period from January to June, one third higher than that of the same period, last year.
A government report showed that the average income of laborers in the 2nd quarter of 2020 reduced by 5.1% compared to that of the same period, last year. Of which, those working in the service sector (-7,3%), industrial sector (-5,1%) have suffered a greater impact than those working in the agricultural sector (-2,9%).
Impact of COVID-19 on REACH
The impact of the COVID 19 pandemic has flowed into many parts of REACH’s operations:
1- Vocational Training and Job Placement
Opportunities for job placements for our graduating students have presented as a major concern for REACH.
Historically we have prided ourselves on achieving an average of an 89% employment rate for graduates (2019).
The current employment rate among REACH’s graduates has dropped to an unprecedented low.
Only 40% of students gained employment. The crisis and its negative impact on our business partners have forced them to curtail their recruitment strategies.
Hospitality and beauty service students were the most affected groups. Even though we have recently seen an improvement in their employment rate, incomes for graduates have been significantly decreased.
To date, graduates from our IT classes have been less affected. However, we are already witnessing a contraction in this sector as a consequence of the shrinking global economy.
The pandemic led to the closure of our training centers for some months.
Fortunately, our innovative training staff was able to quickly mobilize a range of on-line training modules that saw most courses delivering significant levels of training during this period.
Notwithstanding this online training, the completion of our training was unfortunately not on the schedule.
A number of important events including a graduation ceremony were also canceled due to the lockdown and travel restrictions.
- The virus raised widespread panic in communities which prevented many students from enrolling in courses.
- Additionally, the recent training batch has seen a higher dropout rate of students compared to previous ones.
- We are currently facing many challenges in recruiting students for the upcoming batch. The number of students undertaking training is forecast to fall by 40% this year.
- In 2019, REACH signed an MOU with Chisholm Institute in Australia to obtain international certification for students across a number of REACH’s skill training programs.
- The implementation of this program has been postponed indefinitely at this stage due to travel restrictions. It is not anticipated that these restrictions will be lifted in Australia until at least mid-2021.
- We lost a number of full-time and part-time staff during the crisis, both at REACH and its social enterprises (Tre restaurant and Em Salon). This was partly due to forced reductions in working-time and salary reductions. Fortunately, all senior staff was retained and workflow levels were maintained.
- International Volunteers
- Volunteers have always made a significant contribution to REACH’s a success.
- Due to COVID-19 international volunteers were repatriated in early March.
- This has been a considerable loss to our team although we have continued to be innovative and are working remotely with a number of them since they left Vietnam.
The emergence of the COVID-19 virus around the world damaged not only the local economy but those of many of our international sponsors.
This year has already seen challenging situations in obtaining new donors for the future. A number of on-going grants will terminate by the end of the year and some donors are not yet confident about their economic future to commit to renewing these partnerships.
How REACH responds to the situation
REACH was aware of the crisis at a very early stage and consequently adopted a range of measures to respond to the situation.
1- Vocational Training and Job Placement
We utilized our broad network of REACH alumni to find placements and employment opportunities for new graduates.
We also recognized that the long-term economic situation could well result in the employment of many of the new graduates being terminated during the next twelve months.
In anticipation, we extended the post-graduation support period for an additional six months for all recent batches of graduates. These graduates will all receive twelve months of post-placement counseling and support.
REACH moved quickly to establish an online training presence.
- We produced pre-recorded online videos as well as resources for live-stream training sessions.
- Through these channels, we were able to provide students with the necessary preliminary training to adequately prepare them for our centers’ reopening.
- These ‘virtual’ classes kept students on track with the training agenda and also prevented them from dropping out of the programs.
We discussed with some international volunteers ways to continue to get their support including designing detailed tasks and establishing systems and protocol for online support.
- • To prepare for the impact of COVID-19 on our financial position a number of cost-saving measures were introduced. These included reviewing our processes, reductions in non-essential expenditure, prioritizing core activities, and minimizing the recruitment of new staff.
- To prepare for the impact of COVID-19 on our financial position a number of cost-saving measures were introduced. These included reviewing our processes, reductions in non-essential expenditure, prioritizing core activities, and minimizing the recruitment of new staff.
- We are currently adjusting our fundraising strategies and developing a new fundraising campaign for implementation in 2021-2022. We are fortunate that a number of very experienced international volunteers have agreed to provide pro bono consultation on this task.
- We have re-focussed the investment in our promising social enterprise Viewzz. The business is generating a surplus while presenting many new job opportunities for our IT graduates. This business is expected to be an important contributor to meeting our funding shortfall over the next 2 years.
2- The Operations of Social Enterprises
The impact of COVID-19 on the operations of REACH’s social enterprises has been especially significant.
- Tre Restaurant, Koi Bento, and Em Salon all saw rapidly declining revenue.
- ‘Lockdown’ in April resulted in a total closure of these operations.
- Tre and Em salon reopened in mid-May but their business operations are still facing many difficulties.
- Foreigner tourists and expatriates were major parts of their customer base. Income from these sources is now almost non-existent.
Fortunately, REACH’s IT social enterprise Viewzz (previously Revina) didn’t face the same challenges in the crisis. They actually managed to grow revenue by 15% during the first two quarters of 2020. This was primarily due to the increased demand from international Real Estate agents for a larger online marketing presence.
2- The Operations of Social Enterprises
- To mitigate the impact of the revenue losses to businesses all employees were requested to take up their annual leave accruals. Some employees agreed to stand down on unpaid leave until the businesses can overcome the crisis.
- We negotiated with landlords for a reduction of 50% of lease fees during this period in order to minimize fixed costs.
- We applied a number of business initiatives such as food catering services, offering promotion packages, and customizing services to stimulate and target local customers.