HRD Strategy Panel: preparing for the post-pandemic workplace
In February 2020, HRD hosted an expert panel at its UK Summit in Birmingham, exploring the implications of future trends in the world of work. However, in the months that followed, the world of work changed significantly. Mark Bouch, Managing Director, Leading Change, Cath Bailey, VP HR, Avon, Janine Chamberlin, Director – Talent Solutions, LinkedIn, Kate-Griffiths-Lambeth, Group HR Director, Charles Stanley, and Johanna Beresford, CEO, In Diverse formed the panel.
In light of changes to the way we work bought about by the pandemic, the panel reconvened in June to discuss what will change in the post-pandemic era, how businesses could plan for a better future, and how leadership could play a pivotal role. The panel members co-authored an article published by HRD Connect on 24th June 2020. It is published below in full.
Introduction
The has pandemic generated unique challenges, forcing people leaders to respond to unprecedented events at break-neck speed. Many businesses are currently focused on short-term survival. In some cases, the effort is concentrated on maintaining effective operations with staff working from home, and in others on the challenges of rapidly re-sizing workforces and managing dormancy and furloughed staff.
In all scenarios, there are on-going requirements to provide appropriate and swift support to those in need; individuals at all levels of the organization, who are struggling with unanticipated change and personal pressures.
Some businesses have adapted and are able to maintain levels of productivity by rapidly introducing contingency plans, pivoting to online operations and home delivery, reconfiguring workplaces and enabling large numbers of colleagues to work from home. However, many others remain unable to operate effectively (if at all) due to restrictions on non-essential activity, staff availability, disruption to supply chains, and, in many cases, a lack of demand.
And yet, mounting economic consequences bring even greater pressure to re-open. We expect an extended period of recovery in the coming weeks, months and even years, as economies recover and businesses make a hesitant but progressive return to ‘normal’.
Being optimists, we are confident that the UK economy will bounce back and may do well in relative terms, but at the macro level, our rate of recovery will also be affected by higher unemployment, more debt, and lower tax revenues.
What comes next?
We have reached the point where leaders now need to look ‘over the hill’ beyond the current challenges of near-term survival and start to plan for the new ‘normal’. We can’t predict exactly what the immediate future holds and, even if we did, consensus on the way ahead is unlikely. We believe the situation will never fully return to business as we knew it before the pandemic, and perhaps that is a good thing.
Today’s opportunity for forward-thinking people leaders is to reflect, think, and conceive plans to ensure that the future workplace is better than it was pre-pandemic. This article highlights five key trends we believe will define our new normal.
1. Flexible working as the new normal
Pre-pandemic many employers seem to have been unconvinced of the merits of flexible working. CIPD data[1] indicated the slow adoption of flexible working despite the legal infrastructure being in place. However, following the experience of working during the lockdown, several service industries learned that it is perfectly possible to remote office-based staff and still provide effective support to customers. And the deployment of flexible working happened quickly, heralding the arrival of longer-term cultural change.
There will be greater future demand to work from home. Going forward we anticipate greater emphasis on effective colleague engagement, well-being, and technology to enable and support staff working from home. Examples include moves away from desktop-bound systems; an uptake in online training and e-learning; increased reliance on video conferencing platforms such as Zoom, Webex and Microsoft Teams, and workers will become proficient using productivity tools to assist with staying on task such as Trello, Asana, and Centrallo.
Some hurdles need to be overcome in cultures where managers remain attached to direct oversight and visibility to supervise staff. However, those businesses that do not embrace flexible working may become less attractive employers and could struggle to attract and retain people. This is a potential problem for organizations that need staff onsite (such as manufacturing) until remote controls can be introduced. Technology is already making a significant impact: some surgeons can operate remotely, university lectures and classroom lessons are being provided via the internet, and agriculture can increasingly rely on the remote surveillance of livestock and crops by drones rather than people on the ground.
We do not think the flexible working genie is going back in the bottle, but employers seeking a more flexible workplace will need to ensure equal access to the tools and opportunities to work from home. Increased uptake and acceptance of flexible working may even sound the death knell for presenteeism, though there are cultural hurdles to overcome in some areas with a clear need to fully engage staff to understand their preference and issues before wider adoption of flexible working practices.
2. Transformation will accelerate
At the HRD Summit UK, we discussed the pace of change, much driven by digital technology, and the organizational pressures it was likely to cause. But the speed with which we were overtaken by COVID-19 took us all by surprise.
We know of companies postponing or halting transformation projects altogether and others who have accelerated them, especially digital transformation. This looks like a real opportunity in the post-pandemic era. We foresee a significant impact on retail, foodservice, and manufacturing as these sectors take steps to reduce reliance on people. It has already started in the food industry with fast-food kiosks, ‘dark’ kitchens, and robotic food preparation.
We should expect further growth in e-commerce, more automation of retail tills, and further and faster development of the opportunities presented by Industry 4.0: the adoption of highly automated and adaptive equipment and control systems integrating all elements of the manufacturing process.
At the same time, many service businesses, traditionally associated with office-based customer servicing teams and paper, have almost overnight gone digital and are working remotely. We recently spoke to the Head of a UK bank fraud team. In a few weeks, they equipped several thousand staff in UK and India with the technology to work from home, streamlined workflow, and maintained data security. This example suggests, when similar businesses think about a return to the workplace, there will many opportunities to improve on pre-COVID business practices.
Our predictions about these future changes are supported by lessons of the past: the pace of automation has increased after three recessions in the past 30 years[2] and is likely to do so again. As a result, we need to prepare for the associated workforce challenges in terms of preparing people for change, developing capability, and recruiting or developing the skill-sets necessary to build and operate our future workplace.
3. Enhanced brand equity for some…
COVID-19 has enhanced some brands’ reputation and irreparably damaged others. The financial crisis of 2008 had a similar effect. People have long memories. They may forgive, but they don’t forget easily.
Companies with impaired reputations include those whose actions towards customers or staff failed to reflect their values or the expectations of the general public. It was widely reported that Amazon workers walked out at a New York City facility over lack of protective gear after multiple employees were testing positive for COVID-19. The ‘activists’ were fired and, as a result, Tim Bray, a VP, resigned in disgust saying: “Remaining an Amazon VP would have meant, in effect, signing off actions I despised.”
A third of UK firms are reported to have rescinded offers made to graduates[3] for this autumn’s intake and, anecdotally, we hear similar reports about apprenticeships. The short-sighted approach to cancel rather than defer will impact corporate reputations, but also has significant consequences as future-focused companies need to make a longer-term investment in talent to support innovation, build new capabilities and the skills required to adapt to our new normal.
Coronavirus spawned some new ways to harm reputations. Some companies insisted on remaining open without respected social distancing requirements and a few companies chose to fire staff rather than furloughing them[4].
According to The Guardian[5], HMRC have received nearly 800 reports about firms claiming the job retention allowance, whilst directing furloughed staff to work. All these short-sighted decisions will face consequences in the court of popular opinion, even if they avoid sanction in employment tribunals and the criminal courts and even when considered justifiable to safeguard the future of some organizations.
Companies with enhanced brand equity generally have a clear sense of purpose and values, building strong connections with people and communities. Companies that set out their purpose and values around what is right for profit, people and the planet will be more likely to treat staff, customers and the nation fairly. They include companies that could have furloughed staff at the tax-payers expense, but chose not to, companies that went the extra mile to offer real value to customers in difficulty and those that diverted their output to help the nation, (including JCB, Formula 1 teams, and the wealth manager Charles Stanley).
Also, many colleagues and clients have remarked on the enhanced levels of kindness, empathy towards staff and colleagues, and a sense of connection with communities shown during the lockdown.
In the new world, companies able to provide a safe and engaging employee (and customer) experience will reinforce their employer brands. This will force consideration of new (perhaps ‘kinder’) people polices that address the financial and physical health of employees and accommodate their different needs for time off to look after family members, supervise home schooling and maintain connections with each other and the communities in which they live.
Beyond the corporate world, we expect changes in the recognition of the value of care-related services going forwards. Those corporates who can afford it will probably focus their charitable and Environmental, Social, and Governance (ESG) activities on communities who are suffering, deserve better support or conditions and on causes that lack a voice and resources, like domestic violence.
Unlike the last economic downturn, the banks cannot be held responsible; provided they are perceived to be empathetic and understanding when helping with loans, mortgage repayment breaks, relief on credit card debts, they have an opportunity to enhance their corporate reputations.
Being realistic, in an economic downturn, the finance sector is likely to be hampered by rising delinquencies and defaulting customers. These challenges will be common in a widespread economic downturn. There has been much coverage of airlines and their struggles in the media.
Reductions in schedules and withdrawal of operations from key airports (such as Virgin Atlantic axing jobs and shutting down operations from London Gatwick) will have a significant impact on businesses in that area. This type of adverse impact on local and regional economies will damage corporate reputations within impacted communities and through wider coverage in the media. Logistics could be affected for a protracted period because of demand shrinkage and reductions in export-import trade.
4. Working practices will evolve with the experience of lockdown
As of mid-April, 77% of UK businesses were continuing to trade, according to a recent ONS survey, but the accommodation and food services, the arts, entertainment, and recreation sectors report that around 80% have temporarily ceased trading. Of the 4,690 businesses surveyed, 58% reported that their turnover had declined and 67% of those that have not permanently ceased trading have applied for UK government support[6]. Over 6 million employees are now furloughed.
In the post-pandemic economic shockwave, businesses across the UK are going to be under severe pressure for a while. Many businesses will be vulnerable, and some sectors and regions will be hit harder than others. Plenty will struggle and some will founder as lockdown restrictions are eased and the economy starts to recover.
Inevitably there will be winners and losers: pub operators believe at least 10,000 pubs will not reopen and PwC’s research (referenced earlier) indicated significant regional differences in business resilience: workers in the North East of England are the most likely to have become unemployed or furloughed compared to other UK regions, followed by the South East and Wales.
We envisage many businesses able to re-start will want to return to familiar routines and rituals. It will be tempting to try to ‘normalise’ even with as many staff as possible WFH and social distancing governing interactions with each other and with customers for an extended period. We hope companies will take time to reflect on what they learned during the pandemic before the ‘old’ ways of working become, once again the default.
During isolation, many have learned the true value of human interaction with families, friends, and the communities with which we live and work. The novelty of lockdown has mostly worn off, and many of us will be eulogising the way we were before.
There is bound to be a period of ‘reunification’ as things return to a more normal footing. But this will be different. Some changes will result from pressure to reduce costs. Opportunities will now emerge to recruit a more diverse workforce, reduce physical office footprints, and the cost (financial and climate-related) of unrestricted business travel. We urge businesses to think, with experience of social isolation, and identify the activities best done together in one place, and those that should, in the future, be conducted remotely.
In the near-term, our businesses will be in recovery mode. Effective leaders will need to be adaptable and mindful of the challenges faced by employees outside the workplace. In the longer-term, we are truly optimistic that the next generation of leaders will embrace the values of empathy, kindness, and human connection.
5. More agile organizations will evolve
When the authors attended the HRD UK Summit in February, despite the Wuhan outbreak several weeks earlier, it is unlikely that a ‘black swan’[7] event of COVID-19 proportions was on every corporate risk register. It probably is now. Companies need to re-appraise.
There is little benefit in introspective post-event rationalization as the same situation may not happen again. We’re uncertain how government policy will play out; we may not fully understand changes to future customer demand, or how and when our supply chains will resume operations. We face difficult decisions about when and how we should re-open facilities and return to the workplace and we are likely to be concerned about the business, operational, and personal risks involved.
This level of uncertainty can and does, paralyze decision-making. Future-focused people leaders need to design the means to absorb unpredictable shocks and adapt to rapidly changing environments. There is a huge benefit in thinking more carefully, and more often, about our operating model and organizational design to give us the best opportunity to manage and thrive through uncertainty.
Despite multi-layered levels of uncertainty, we urge business to kick-start ‘forward planning’. Faced with uncertainty, people leaders need to make the best decisions they can, adapting them as the situation changes. This requires a systematic approach that is re-iterated as the situation develops.
It is a good idea to keep forward planning concise and focused on a high-level from the outset. People leaders should start with an up-to-date view of the current situation, develop scenarios describing a range of possible future outcomes, and set out their organization’s broad direction of travel based on current beliefs.
The latter provides a coherent unifying purpose for the organization based on post-COVID opportunities likely to be available and a realistic view of business capabilities. Forward planning also enables your organization to ‘screen’ existing initiatives against new scenarios, deciding whether they should stop, continue, or accelerate. Stopping activity is usually tough but makes resources available for new priorities. It enables executives to identify, in advance, potential decisions and responses, identifying plans and actions that should be initiated in any situation. These are essential disciplines for organizations seeking to be proactive and agile in a fast-changing world.
One thing we have all noted since mid-March is how responsive many organizations (and people) can be when there is a compelling reason to change. The uncertain future we now face demands greater a greater range of available options, faster decision-making, and the ability to flex resources to new strategic opportunities as new scenarios emerge. We anticipate success for organizations able to practice agility at scale.
In uncertain times, speed matters more than perfection. In this new world, traditional heavy-weight planning has limitations as plans will become rapidly outdated. Strategic agility implies an iterative approach, revisiting stages as the situation changes, checking assumptions remain relevant, constantly engaging people, and retaining the agility to learn and adapt as the situation changes. This agility will, no doubt, extend to the more flexible use of facilities and a preference for remote and mobile working.
Conclusion: a key role for people leaders
The COVID-19 era has taught us that change does not need to take a long time to happen when there is a compelling reason to change, an agile mindset, and the right leadership. We have learned how to stay better connected when we are apart, we have been highly successful at building virtual communities and we will place a higher value on our time together when we can reconvene.
Looking after people over property and profit has been the focus of this crisis. Companies that stay connected to their purpose and put their people at the heart of their decision-making will enhance their brand reputation and maintain better employer-employee relationships.
The influential role people professionals have played has built credibility for the function. The post-COVID business world and implementation of people-centered solutions to address new scenarios suggest the need for forward-thinking business leaders, organizational resilience, new skills, using digital technology to enable different ways of working, organizational ability to learn in the flow of work and quickly adapt, strong focus on mental health and wellbeing and building capabilities for rapid change. The future requires a big people agenda. It’s time to get started.
[1] CIPD’s January 2019 Megatrends report on flexible working suggests that while many people already benefit from flexible working, a significant proportion of the workforce are not being given the option to work flexibly and the incidence of some commonly accepted measures of flexible working seem to have remained broadly flat, or increasing slowly over the past 10-15 years.
[2] Several economists have outlined this cyclical nature of automation. Nir Jaimovich of the University of Zurich and Henry E. Siu of the University of British Columbia reported that over three recessions in the last 30 years, 88% of job loss took place in ‘routine’ automatable occupations.
[3] The Daily Telegraph 7 May 2020. Almost a third of graduate jobs have been cancelled or deferred due to coronavirus, poll finds.
[4] YouGov Report 24 March 2020. 1 in 20 British workers have lost their jobs thanks to COVID-19.
[5] The Guardian Wed 13 May 2020. Nearly 800 reports of people defrauding UK furlough scheme.
[6] Office for National Statistics Report: Coronavirus, the UK economy and society, faster indicators: 7 May 2020
[7] The Black Swan. The impact of the highly improbable. Nassim Nicholas Taleb 2007. Essential reading for those fascinated by the unpredictable random events that impact our lives!