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Pandemic Rise of the New HR SoC1162 June 2020

Author: Rob Edmonds (Send us feedback.)

Plausibly, the coronavirus and the coronavirus-disease-19 (covid-19) pandemic will lead to long-lasting changes in human-resources (HR) practices. As P1503 — The Great Working-from-Home Experiment notes, the covid-19 pandemic has resulted in a sudden and dramatic scale-up in working from home. This development appears popular among employees: According to a survey of US workers that the Harris Poll (The Stagwell Group; Washington, DC) conducted on behalf of Glassdoor (Recruit Holdings Co.; Tokyo, Japan), 67% of respondents said that if their companies implemented policies requiring indefinite remote working, they would be in favor of working from home indefinitely. This view backs up a March 2019 International Workplace Group (IWG; Zug, Switzerland) survey of US workers, which revealed that 80% of respondents would choose a job that offered flexible working over one that did not.

HR could be permanently changed and its art of the possible reset.

Before the emergence of the coronavirus, flexible working (including the option to work from home at least occasionally) was already an important factor in attracting talent: The same IWG survey revealed that more than 80% of employers had used flexible working to improve talent retention. But until now, most flexible-working policies still required employees to spend a substantial amount of time in the workplace (for example, an office worker might work at home only one day per week), and flexible working was rarely available to all employees. Senior staff members have almost certainly benefited from flexible-working policies more than other groups have.

The covid-19 pandemic has forced employers to allow many more employees than ever before to work from home—and to do so on a full-time basis. In many cases, organizations have had to modernize their collaboration-software infrastructure rapidly. Many collaboration-tools vendors—including Microsoft (Redmond, Washington), Slack Technologies (San Francisco, California), and Zoom Video Communications (San Jose, California)—have seen the adoption of their products and services increase rapidly during the pandemic. For the most part, collaboration technology has delivered. This pandemic arrived at a time when consumer broadband connections and conferencing software have finally evolved to a point at which videoconferencing from home is perfectly workable.

Of course, problems have occurred. For example, hackers have been exploiting peoples' concerns by sending out phishing emails that purport to be about the coronavirus, and home-based IT-security employees sometimes lack access to all the cybersecurity tools they would have access to in the office. Working from home is also a significant challenge for security agencies and other companies that deal with highly sensitive materials.

Despite some challenges, the many working-from-home successes have led commentators to question whether the pandemic could lead to a long-lasting change in working-from-home practices. Planned working-from-home strategies have several advantages for employers. For example, such strategies can see use to attract and retain talent, reduce costs, and enable access to a larger and more diverse pool of recruits (because geography no longer limits potential employees and because working from home can allow people to balance work and other life priorities, such as childcare responsibilities).

Enabling and adjusting to large-scale working-from-home practices are not the only (or the most serious) HR challenges that the covid-19 pandemic has created. Around the world, many companies have seen demand for their products and services collapse overnight, forcing them to reduce payroll costs rapidly. For example, Marriott International (Bethesda, Maryland) furloughed tens of thousands of hotel employees, some two-thirds of its 4,000 corporate employees at its headquarters, and some two-thirds of its corporate employees abroad. Furloughing has enabled companies to scale down rapidly without committing immediately to permanent staff reductions. Even so, some companies have moved from furloughs to layoffs. For example, in the United Kingdom, airlines British Airways (International Consolidated Airlines Group; London, England, and Madrid, Spain) and Virgin Atlantic Airways (Crawley, England) initially made use of a government-backed furloughing scheme but then decided to lay off significant numbers of employees after they determined that travel will not return to normal for several years.

Companies in industries other than hospitality and travel have faced the opposite challenge, finding themselves understaffed as demand spiked. For example, Amazon.com (Seattle, Washington) opened 100,000 full-time and part-time positions to help fulfill a surge in online orders, and Walmart (Bentonville, Arkansas) moved to hire 150,000 additional employees. As the employment market changed, so did incentives. In the United States, Europe, and the United Kingdom, Amazon increased pay for its fulfillment workers. And Walmart announced a bonus pool of $365 million for employees who work through the covid-19 pandemic (resulting in payouts of $300 for full-time employees and payouts of $150 for part-time employees).

To an extent, companies have been looking for ways to develop more flexible workforces for some time. For example, the gig economy utilizes self-employed freelancers rather than employees, and tech firms frequently use large numbers of on-demand internet workers to complete tasks such as data labeling. However, the covid-19 pandemic has highlighted a more fundamental need for organizations to have the capability to scale up and scale down rapidly in times of crisis.

Rapid staffing scale-ups have also pushed some recruiters to amend vetting and other standard processes. During the covid-19 pandemic, PepsiCo (Purchase, New York) unveiled a plan to hire 6,000 frontline employees and have them start immediately, before the completion of their background checks and drug screenings. Somewhat similarly, the governors of almost a dozen US states—including California, Florida, New York, Texas, and Virginia—took steps to loosen regulations in an effort to encourage retired medical professionals and nursing students to begin working in hospitals. Plausibly, positive results from such efforts could lead to ongoing relaxations in recruitment regulations and practices.

Further HR changes are ahead in the coming year. Phased returns to work, continuing social distancing, ongoing working from home, and new obligations to provide protective gear all require new HR interventions. And when the covid-19 pandemic eventually ends, HR could be permanently changed and its art of the possible reset. Employment markets will likely shift. Many employees have experienced the freedom of working remotely and on their own terms. Top talent will likely be able to call the shots about where, when, and how they work. Some organizations may decide to move to permanent working-from-home arrangements, canceling leases even before employees return to offices. At the same time, furloughs and flexible-employment contracts could become far more common as companies try to smooth demand fluctuations both in normal times and in moments of crisis. And employers may seek to strip away policies and bureaucracy that have slowed recruitment and restricted available talent pools. With these and other changes, the pandemic could significantly shift the dial in standard HR practices.