Recently, colleague Vinnie Mirchandani and I have been identifying the changes HR has undergone recently and what the short and long-term strategies HR will need to help re-right their firms as they emerge from the pandemic-induced recession. It’s been a sobering effort and one that more executives should understand, appreciate and assist with. Here’s how HR has responded lately and what (significant) work remains as HR migrates from Firefighting to Recovery to Growth.
Lots of short-term firefighting left
While the early days of corporate pandemic responses may seem like a tortured quest of days long ago, the immediate pandemic-related work of HR is still a long way from over. Here’s just some of the work to be completed:
Doing right by governments
HR departments are currently front and center in documenting how PPP, CARES and other government monies were spent. HR must determine whether some or all of those loans can be forgiven and whether the firm is in compliance with the rules around these payments. These are not immaterial sums and this work is often a top priority for employers as capital/cash balances can be precarious in some firms. Done right and the employer has a fighting chance of reopening well. Done poorly and it is game over for the firm.
HR departments are navigating a complicated and diverse set of unemployment requirements. Since these requirements vary by state, union agreement, employment contract, etc. a quick, one-size-fits-all approach to furloughs, layoffs, etc. has been impossible. Complicating matters are:
- The myriad of questions from confused employees that are looking to HR for help.
- A short-term extra $600/week in additional unemployment benefits coming to employees from the U.S. Federal Government. This makes laid-off workers seriously question the economics of returning to a low-wage paying employer.
- State unemployment departments overwhelmed with record filing levels.
- Underfunded state unemployment benefits that could run out any day now.
- Obsolete state unemployment department systems (Some desperately need COBOL programmers to update their systems).
Another governmental entity HR must contend with in the U.S. is the Occupational Health and Safety Administration (OSHA). It, as well as state, county and city health governmental entities have their new, and sometimes conflicting, workplace safety guidelines that must be followed. How can a firm/HR serve so many masters? One great piece of guidance I heard from a restaurant owner was simply this: find out what practices everyone dictates and pick the ones that are the safest. Err on the side of caution.
Doing right vis-à-vis safety
For aeons, the most dangerous thing some of you encountered at work was that mystery food container that was in the back of the break room refrigerator. Rumor had it that it had been there, unopened, since the Reagan-era.
Today’s workers expect a different level of workplace safety. They want frequent physical plant cleaning, shields wherever person-to-person interactions will occur, touch-free access to facilities and time clocks, etc. HR has to figure out these requirements, acquire supplies/contractors and ensure compliance.
HR must decide if break rooms and cafeterias are now closed or, if open, how is personal safety maintained. Ditto for washrooms, vending machines, etc. Spacing is another challenge with some firms re-purposing conference rooms as work areas to provide enough spacing between workers.
In addition, HR must create a safe workspace and only allow a healthy workforce within it. HR decisions around requiring a COVID test prior to returning to work are common but not universal. So, too, are policies requiring employees using PPE and having their temperatures taken every work day.
But where will HR get the medical guidance it may need? Medical experts may be needed on-site, within HR or on call.
And, of course, everyone will need to be trained on the new ways of work.
Doing right by people
When the full effect of the pandemic was becoming apparent, companies implemented a number of new work protocols (e.g., WFH – Work From Home), travel policies, office policies, etc. even if the company lacked great advice/guidance.
In their haste to re-align their firm with the new reality, HR was and still is front and center in furloughs, layoffs, permanent workforce reductions, reduced hours, etc. In its quest to do these quickly, the company may have damaged its employment and recruiting brands. HR will have to somehow fix this (see below).
HR is dealing with some Solomonic challenges today. For example, HR must determine
- How to handle requests from parents who are being told by governmental entities to isolate at home and home school their children? Can these employees also work full-time while home-schooling children? If childless employees are being asked to handle the workload of others, is this discriminatory and should these workers get paid more for it?
- What should an employer do if an employee refuses to return to the office as he/she has a compromised immune system that COVID could exploit for a deadly outcome.
- What if an employee feels the employer isn’t doing enough to provide a safe work environment for them?
- Should the firm reactivate all workers, albeit at a reduced schedule and pay, or phase in full-time workers as the recovery manifests itself?
- Does the company have any obligation to the people whose job offers the company rescinded?
- Is it fair/ethical to reactivate someone when the wage you offer is less than what they’ll pull in via unemployment benefits?
- Are you paying people a living wage?
- Will the firm re-activate employees in a non-discriminatory manner? Will it re-hire young, cheap workers first? What happens to older workers and people of color?
- When the recovery begins, do we catch people’s salaries up to what they would have been without a pandemic-driven recession?
- How will we do performance reviews this year? Will we even have a salary administration effort this year?
- How do we get contractors, delivery people, suppliers, etc. to also respect and follow our new safety protocols?
- Do we have any flexibility in helping people maintain their health insurance benefits?
This list goes on and on. If you can’t get through to your HR department today, it’s likely they’re swamped with troubles like these.
Intermediate Term: begin the recovery
Before HR and the rest of the company gets signals that its business is recovering, it needs to get HR back in a great place and position HR to be a major contributor to (not a drag on) future growth. Several items will likely need attention during this timeframe:
Fix the brand damage - In the rush to cut costs, halt the spread of the disease and to conserve cash/capital, employers made many decisions involving hiring, employment levels, office closures, salary/wage cuts, etc. Those decisions, while understandable, will create problems down the road.
Specifically, employers can expect a drop in their Glassdoor and other employment/career site reviews. Individuals who had their job offers rescinded or their career cut short are not going to like what happened to them and will likely vent about it on employment and social media sites. Expect this. Now, decide what you’re going to do about it.
Each tactic your firm employed to cut costs and headcount has its own unique challenges. When employees are let-go/laid off, did your firm consider how it would deliver the message and how that message would be received? Did your firm consider how long-lived the event would exist in media, web pages and more? Would any of the 3500 people that Uber sacked people via a Zoom call consider rejoining them? According to Forbes:
This week, Uber announced that it will layoff 3,500 employees, representing 14% of its workforce. In a sign of the times, with employees working from home, Uber informed the job-loss casualties via an online Zoom call.”
This wasn’t the first Zoom firing amidst the pandemic. The Verge previously detailed the circumstances surrounding the layoffs of employees at scooter-sharing startup Bird, which fired 406 employees in a harsh “Black Mirror” style. The unsuspecting workers were asked to log into a one-way Zoom call, after being informed that all other appointments were cancelled. A disembodied voice read a script informing the person that they’ve been laid off. Their Slack and other accounts were shut off and given end dates.
The method matters in something as personal as one’s career and livelihood.
Or, what happens to employers who have crammed down a pay cut on their workforce? Will this erode or help employee loyalty and retention?
According to MarketPlace:
In past downturns, job cuts have been favored over pay cuts by many businesses, because pay cuts can lower productivity and push the highest-achieving workers to leave the company.
How good can a company be post-COVID if its best and brightest bolt at the first chance?
Or, what happens if the return to work request is not economically acceptable? If a former employee sees that their post-pandemic wages are less than unemployment benefits and the extra $600/week in Pandemic Unemployment Compensation? Why would an employee come back for a substandard pay situation? And how would your employment brand fare in states that require employees to accept these substandard deals?
Or, what happens when employers will welcome back employees only if they accept a pay cut? You don’t need access to a psychic hotline to know this won’t go down well once the economy starts to heal. A WBTV report stated:
As businesses start opening up and employees are going back to work, some are being asked to take a significant pay cut in order to keep their job.
I think it’s offensive to just, out of the blue, for the company to say, ‘sorry, your pay just got cut by 25 percent,’ but that is literally what’s happening,” employment attorney Josh Van Kampen said.
Or, what happens if you can’t rehire but a fraction of the prior workforce? One report states:
Typically, fewer than half of laid-off workers expect to return to their previous job, but there's hope this time could be different, since many business shutdowns are likely to be temporary, said economist Till von Wachter of the University of California at Los Angeles.
The majority of laid-off or furloughed workers - 77% - expect to be rehired by their previous employer once the stay-at-home orders in their area are lifted, according to a nationwide Washington Post-Ipsos poll. Nearly 6 in 10 say it is “very likely” they will get their old job back, according to the poll, which was conducted April 27-May 4 among 928 workers who were laid off or furloughed since the outbreak began.
While I like this optimism, I fear some of this may be misplaced. Employers may not be able to get those workers back at all. I spent time on a con call this week with an HR tech vendor whose software was used by many health care organizations to hire managers and other hospitality workers. I know one major grocer that did the same thing. And I know one of the largest pharmacy chains has taken on tens of thousands of former hospitality and other laid off workers. When the old employer comes a knocking, who would willingly leave a newer employer that was their economic salvation during a tough time? Let’s face it, the employment brand of some firms improved a lot during this crisis and other employers saw their brand disintegrate. Is your HR group rebuilding its employment and recruitment brands?
In this intermediate term, HR organizations must re-imagine their value proposition to existing employees, laid off workers and potential new hires. If your firm stopped matching 401K contributions, funding continuing education, etc., these acts likely had an adverse impact on your employees and job seekers will learn of this, too. Are you really planning to reopen your hiring without reinstating prior wages and benefits? Do you really want employees that accept a slave’s wages, no benefits, no guaranteed hours, etc.? Why would you expect any kind of performance or loyalty from them?
There can be no recovery if HR doesn’t rebuild its recruiting pipeline. Talk about tough, this will be really hard for firms that took draconian steps to reduce their labor costs this year. If ever there was a time to acquire a candidate relationship management solution (e.g., Symphony Talent nee SmashFly), this is it.
Businesses need to get laser-focused on identifying the kinds of workers they will need and where they will find them (see below). Get the tech, acquire big data and organize the team to radically reengineer how talent will be discovered, cultivated and brought into your firm, now, so that oversized growth will be a straightforward effort and not an arduous challenge.
Growth – the stage HR must build to
The third stage of the rapidly evolving and newly relevant HR involves the growth in workforce (and the challenges associated with this growth). But first a caution: Winning the war for talent may have been a challenge pre-COVID and it will be harder now especially if your firm:
- Is trying to operate with the processes, business practices and technology it used in the past. This is a different time and it demands new thinking and solutions.
- Acted aggressively in culling its workforce, reducing benefits, etc. Returning, existing AND new employees will need to see proof of a changed firm or workforce challenges will only get magnified.
The first growth step involves planning. HR must assume that:
- The workforce needs of the firm will be different. New skills, a more flexible kind of worker, etc. will be the order of the day.
- The speed of needed workforce additions may be very aggressive. There is a real chance that businesses will want to return to old staffing levels overnight; however, getting all those workers back and trained could be a challenge.
- The business may have changed (e.g., business model has shifted) and these changes will affect the skills and headcount needed. If you’re not already thinking about having more of your workforce to include people that are more easily re-trained and upskilled, you should. Having specialists that are a mile deep and a pencil thin in skills may have been a luxury in the past but not so much in the future.
Once a new workforce plan is in place, other plans must be developed. Specifically,
- You may need a media/PR plan to repair the damage to your firm’s employment and recruiting brand.
- You will absolutely need unique communication plans for existing employees, recalled employees, job seekers, contingent workers, etc. Each constituency will have its own set of issues, concerns and questions.
- You will need a plan to reimagine work processes as some processes will change as a result of new personal safety needs, some because of a need to improve HR process productivity, and some because HR needs to improve its (and by extension the organization’s) competitive standing. These reimagined processes will likely require new enabling technologies like AI, ML, bots, predictive analytics, AI-powered workflow and exception handling. You should also plan time for your HR team to become aware of the universe of new solutions and process possibilities out there. You need context to create these plans and the vision to design the new way of work.
- You will also need a plan to avoid making (re-)hiring mistakes including plans to avoid discriminatory rehiring decisions (e.g., hiring cheap, young workers and not older workers).
- You’ll need a plan to restore and reimagine your benefits, bonuses, raises, time-off, WFH and other programs. Will you match 401K contributions again? The pandemic let people work from home – will you take that entirely away from them? How will they react?
One of the more difficult decisions may come in the form of deciding which workers won’t be invited back to the firm. These decisions must be made based on the skills the reborn firm needs and cannot simply be an excuse to cull some of the problematic workers of old. The performance of those troublesome workers should have been documented in performance appraisals/plans long before the pandemic and acted on in a timely manner then. You may inviting a lawsuit if you use this pandemic as an excuse for overdue housecleaning. Keep the rehire decision-making plans on a business needs level.
Creating these plans will require a vision of what the company and HR need to be. A key planning step for all HR groups involves an honest assessment of what mistakes were made and how these will not be repeated.
Put all the planning together, assign people (or get help) to these efforts and get moving as rapid growth waits for no one. Chances are, refilling the recruiting candidate pipeline will end up near the top of the critical path activities.
Now, get to executing against these plans!
HR professionals may want to revisit that old college Psychology 301 item: Maslow’s Hierarchy of Needs. In a nutshell, Maslow opined that people care about physiological needs (e.g., food, clothing, shelter) most of all and will only consider higher ordered needs (e.g., self-actualization) once the needs at the bottom of the hierarchy are being met.
So, today, we have a lot of workers who lost perks, took a pay cut, etc. but are still working. Your firm may be helping them meet their basic lowest level needs but that’s about it. Your former employees may be in real trouble with these most basic of all needs.
Don’t peek behind the curtain to see what HR’s been up to unless you’re strong of heart. The enormity of HR’s workload and change requirements via COVID are insane immense and it’s not just a one-time thing. Here’s the textual workplan….