Leading in the Unknown: Work in a Post-COVID World

In January 2020, when a new mysterious virus began emerging, Marianne Flores, director of real estate strategy and operations at IBM, began holding regular calls with colleagues in the company's security and health and safety departments. As the threat grew, so did the crisis management team, eventually including human resources, legal and geographic leaders. By March, most of the company's more than 350,000 employees in 175 countries began working from home.

“We've learned a lot going through this,” said Flores. “It's been like the world's largest work-from-home pilot.”

A similar process, to varying degrees, was carried out by corporations around the globe as they scrambled in real-time to keep employees safe and operations steady as the novel coronavirus spread last spring. By June 2020, 42% of the U.S. labor force was working from home full-time, according to Stanford University,¹ while another 26% – the nation's essential workers – were still showing up for work on-site. (One-third were not working at all, due to lay-offs, furloughs and economic shutdowns). Noted Stanford economist Nicholas Bloom said he expects 20% of the workforce to be remote post-pandemic, a four-fold increase in the work pre-pandemic from home rate.

A little over a year since the first lockdowns began, the world is still battling the virus and adapting to the changes it has forced. There have been more than 100 million known cases of the virus globally and a tragic 2.5 million deaths. The once-in-a-century pandemic has upended lives and livelihoods in ways that will be felt for years. Small businesses shuttered, students and educators grappled with online learning and the forced isolation took a toll on mental health.

The COVID-19 crisis has tested businesses like few other events in modern history, disrupting supply chains while hindering work flows and workplaces. It forced us to rethink the very nature of work.

It's also underscored the need to be ready for the next crisis, be it a cybersecurity breach, an extreme weather event, a new pandemic – or some combination of events. COVID-19 has prompted many organizations to shake up their approach to preparedness to anticipate unlikely, high-impact events and consider multiple possible scenarios, a recent Deloitte survey found.²

Business as usual? There's no such thing in the post-COVID world.

The challenge for businesses now is to plan for the new workforce reality. Prepare for some mix of remote and on-site work, taking the lessons learned over the past year to create more resilient organizations that are able to not just survive, but thrive in an increasingly uncertain world.

“None of us thought that a year later, we'd still be in the situation we're in,” Flores said. “But it also creates an opportunity to really transform as we come back to work and rethink what that will look like.”

 

The tumultuous changes of the past year are likely just a warm-up for what's to come. COVID-19 accelerated trends already underway that promise to reshape the business landscape in profound ways. Consumers and companies alike were pushed to adopt digital tools such as telemedicine, virtual collaboration and e-learning – all resources that are likely to stay. “We've seen two years' worth of digital transformation in two months,” Microsoft's Satya Nadella explained to analysts last spring.³

Two-thirds of executives surveyed last year by McKinsey said they were stepping up investment in automation, robotics and artificial intelligence in the wake of COVID. In addition to technology adoption, the survey of 800 global executives also pointed to greater reliance on independent contractors and an embrace of remote work.⁴ These trends “have the potential to deliver better productivity, lower costs and enhance resilience,” the consulting firm noted in the report. They also have the potential to leave many workers behind.

Other pandemic-induced behaviors are likely to stick. When business travel came to a near standstill, for example, companies realized that flying halfway across the world for a meeting was not always necessary. That's good news for the planet, but not for airlines or hospitality workers.

As these shifts ripple through the economy, they are remaking the mix of jobs and skills that will be in future demand and exacerbating inequalities that were growing even before the pandemic.

Occupations on the decline include customer service, food service, office support, production and warehousing, according to McKinsey. It’s estimated that one in 16 global workers will need to find a different occupation by 2030.⁵ That includes more than 17 million U.S. workers, 28% more than the firm's pre-pandemic forecasts.

Many of the workers that will need to find new skills and occupations are women and people of color, who tend to be heavily represented in hospitality, retail, health care and caregiving roles.

The pandemic has created a new class of haves and have-nots. Half of all workers have jobs that require them to be on site, putting them at risk of infection or job loss. And not all of those who can work remotely are able to do so effectively. More than a third of Americans have poor – or no – internet at home, affecting their families' ability to work and learn remotely, according to Stanford economist Nicholas Bloom. “Those unable to work from home – either because of the nature of their jobs or because they lack suitable space or internet connections – are being left behind," he explained, adding that the situation presents “a time bomb for inequality."

The effects of this will be long-lasting. The have-nots, explained Bloom, “face bleak prospects if their skills and work experience erode during an extended shutdown and beyond."

The pandemic is also impacting one half of the labor market particularly hard: women, who have dropped out of the workforce in droves. As of February 2021, some 2.5 million women had exited the workforce, compared to 1.8 million men. Unemployment rates for Black and Hispanic women have surged.

The numbers spiked in September 2020, the start of the school year, suggesting caring for kids and remote-learning from home was a factor. In January 2021, women accounted for almost 80% percent of the 346,000 adults who left the labor market, according to the National Women's Law Center.⁶ Women who opt for a “pandemic gap year" may find it difficult to re-enter the workforce, just as taking time off to have children has long penalized them. Vice president Kamala Harris has called the situation “a national emergency" that threatens to turn back women's gains in the workplace in ways that can persist long after COVID is vanquished.

Even for professional women sticking it out in the workplace, juggling careers and kids is taking a toll. Helen Leis, managing partner of Oliver Wyman's Health & Life Sciences group, which has been tracking the pandemic and its effects, shares their insights. “We are seeing a pretty big burden falling on whoever the primary caregiver of the children is in a home, which is typically women." According to Leis, women may end up working later hours to compensate for the demands of family and end up feeling stressed. That has implications for career advancement.

“If you aren't able to contribute in the same way you were pre-COVID, are you at risk as a woman of falling behind on some of these things?" asked Leis, who juggles her own career with two pre-teens in remote schooling situations.

“There are levers you can pull," Leis said, such as prioritizing mental health and cultivating sponsors within the organization that will go to bat for women. “But it takes purposeful deliberation from busy executives who are wrestling with their own uncertainty."

 

Companies were already facing challenges to attract and retain talent and reskill their workforces before the pandemic. That has only intensified.

Kaleana Quibell is the well-being director at Sequoia Consulting, working with tech companies to develop human resource strategies. She explains how most companies think. “What are ways that we can reskill people? What are new products that came out of COVID that we can put them on and what kind of mentorship programs can help guide them?" She thinks we'll start to see more and more of that.

One key solution is to improve broadband access across the country, said Bloom. "There are people that could work right now if they had good enough broadband at home that enables video calls,” she said.

But the private sector has a key role to play as well. As unemployment shot up last year, Verizon pledged not to lay off any of its 135,000 workers during the pandemic. It retrained 8,000 workers affected by Verizon store closings for remote work (such as telemarketing) and expanded childcare benefits. The company also launched a broader plan dubbed “Citizen Verizon" to train low-wage workers for higher-paying occupations of the future. The goal is to train 500,000 workers at risk of being displaced by 2030. Target is also covering unlimited day care for its employees through May.

Companies including Goldman Sachs, IBM and HubSpot are expanding “returnship" programs for women and others who want to freshen up their skills and transition back into the workforce.

Apprenticeships are making a comeback, too. IBM, Bosch and Barclays are among the companies that have created apprentice programs to train workers for in-demand jobs and build a pool of talent. Amazon has partnered with community colleges to offer free training for employees and prospective workers to prepare them for highly skilled, in-demand jobs, such as robotics and cloud computing. One of the partner schools, Lehigh Carbon Community College, expects to have 320 students go through the 12-week training program this year, after which they are eligible for one-year, paid apprenticeships with Amazon.

The returns on investment in apprenticeship training tend to be high to employers, government and workers, noted Adam Seth Litwin, associate professor of Industrial and Labor Relations at Cornell University. And frontline service workers at risk of being permanently displaced can benefit from upskilling. Still, he worries about the costs of technological change falling on those "least equipped to shoulder them." Managers, he said, should be asking, “What are my people really good at? And, what sorts of technologies might better help them – and me – exploit these strengths?"

The efforts are part of a broader retooling of policies and benefits that reflect the new COVID and WFH realities. Gone are lavish catered lunches and on-site yoga. In their place now are benefits that support employees trying to balance work and family, such as childcare and tutoring support, paid time off, financial counseling and mental health programs. Leave, in particular, has bubbled to the top of employer priorities.

The Hartford’s 2021 Future of Benefits study found that 75% of employers said they expanded or added benefits that support paid time away from work beyond state or federal requirements. The most common types of leave added were sick time and medical leave:

Voluntary benefits such as such as critical illness, hospital indemnity and accident insurance, and foundational benefits such as life and disability insurance, are now being viewed with greater context and the broader lens of the pandemic. For U.S. workers, the pandemic made the idea of becoming hospitalized or seriously ill, or the heartbreaking loss of a loved one, more of a reality for many people. Of the benefits U.S. workers elected during their most recent open enrollment, the following were new selections for them according to the Future of Benefits study:
 

As employers and employees double down on bedrock benefits, a big question looms over it all: When will it be safe to go back to work? There is still no easy answer. As the virus has shape-shifted, companies have pushed back RTW expectations numerous times.

“There's a race to get as many people vaccinated as possible before the variants that we've seen emerge in the UK, South Africa and Brazil take a foothold here," said Oliver Wyman's Leis.

She helped create a Pandemic Navigator that generates scenarios and actionable insights based on variables and the latest heath and economic data. With a fast rollout of vaccines that stay a step ahead of more contagious variants, the U.S. could begin getting back to normal in July. If not? “You're looking at October, or perhaps even later," warned Leis.

For organizations operating in multiple markets and geographies, the picture is even more complex. “We won't all cross the finish line of herd immunity at the same time," noted Leis. Herd immunity is when the rate of transmission falls below one – in other words, an infected person is likely to infect less than one other person. Some countries may lag in vaccine rollouts by a year or more, she added. And even within the U.S., for example, states have different COVID trajectories and regulations.

Not surprisingly, companies are taking different approaches.

Tech companies have led the embrace of WFH arrangements. In a public statement, Facebook's Mark Zuckerberg shared that half of the social media company's 45,000 employees could be working remotely on a full-time basis in the next five to 10 years.⁷ Google plans to try out a flexible work week, where employees work at least three days a week in the office for “collaboration days.” Yelp is keeping its San Francisco headquarters, but expects “a significant portion” of its team to work remotely on a full-time basis. “The greater flexibility,” Yelp Chief People Officer Carolyn Patterson explained in a blog post, “will help the company attract talent from a more diverse pool and reduce its real estate costs.”⁸

Goldman Sachs CEO David Solomon is one of those pushing back on WFH and hybrid arrangements. Rather than “the new normal,” remote work is “an aberration that we are going to correct as quickly as possible,” he told attendees at a recent conference.⁹ Among his chief concerns are the waves of new hires every summer that are not getting immersed in the company culture.

Still, hybrid work environments appear to be here to stay. Multiple public surveys show that employees are eager to return to the office, but only for two or three days a week.

On an immediate level, that means reconfiguring physical facilities for social distancing and implementing health safeguards to protect employees who venture back into the office (see “clean tech” sidebar), and beefing up facilities and health staff. In addition to health screenings, companies are now grappling with whether to require vaccinations or even offer them on-site. It is also leading to a reimagining of the workplace itself.

“We’re not going back to the old normal, that’s gone,” said IBM's Flores.

One trend that seems to be popular is envisioning the physical office as a place for collaboration among colleagues, teams and clients. Or, as Flores put it, “not so much of a ‘me’ space, but more of a ‘we’ space.”

Even software maker Salesforce, which completed a billion-dollar skyscraper for its new San Francisco headquarters just two years ago, said it would redesign its offices to serve as community hubs.

Design firms such as Perkins and Will, an architecture and design firm with a global client base, are at the forefront of a sweeping transformation of physical workspaces that is likely to persist well beyond COVID. Clients have shifted their focus from immediate concerns about reconfiguring facilities to long-term strategies, noted Meena Krenek, principal and interior design director in the company’s Los Angeles office.

“They're looking for hybrid solutions that allow for a mixture of in-person congregating and immersive, virtual interaction with colleagues as well as clients,” she said.

That means creating flexible spaces that can accommodate technologies like cameras, lighting, big screens, microphones and speakers – so called “Zoom rooms” – while also accounting for social distancing.

The collaborative spirit extends beyond a company's own organization. “As we go through this, everybody's learning from each other,” said Flores. “I've never seen such collaboration on all levels – within our company, within other companies, across industries … everybody is sharing, collaborating, exchanging, because nobody has all the answers.”

 

Reconfiguring physical space may be the easy part. Hybrid work environments create a new set of management challenges.

“When everyone's remote it's easier,” said Beth Rivera, head of human resources at Uncommon Goods, an e-commerce company based in Brooklyn, NY. “When we're hybrid, that's when the challenges will happen.”

In March 2020, when non-essential businesses were ordered to close, Uncommon Goods shut down its operations to be safe, even though warehouses were considered essential. It re-opened the warehouse in May 2020 with safety masks, gloves and all the requisite safety precautions. It also created two cohorts of warehouse workers who alternated three-day shifts to minimize the spread of potential virus transmission. (The groups were named the Yankees and the Mets, encouraging a friendly rivalry).

Now, with the prospect of some office workers returning, the company is grappling with how to manage the new hybrid environment and keep its culture intact.

“Our culture is based on us being together,” said Rivera, noting that all of the company's 200 full-time and up to 2,000 seasonal workers are based in the same Brooklyn location.

With employees wanting to work from home at least part-time, “How do you continue to foster the collaborative culture when people are scattered all over?” Rivera asked. “That is going to be the biggest change.”

Indeed, long before COVID, some companies, including Yahoo! and Reddit, experimented with flexible work policies and hybrid teams. They ended up abandoning the idea, though, citing the need for communication and collaboration.

Managing hybrid workforces requires new leadership behaviors and new approaches to creating the kinds of informal interactions that drive company cohesion and innovation.

The new environment requires adaptive and empathetic leadership. “In a world with this kind of tumult, you need to acknowledge people's anxieties and fears and craft a way forward with them,” Leis said. “But if you’re doing it in kind of a hybrid model where not everyone is physically present with you all the time, you're going to need different ways to build trust and influence people and build followership."

 

What does leadership look like in the COVID era? It’s agile, it’s proactive and, perhaps, most of all, it’s empathetic.

 

“Sometimes we don't have all the answers,” said Rivera of Uncommon Goods. “But, if you are including people in decisions that affect their health, you gain their respect and trust and they are supportive of the decisions you make.”

 

 

⁹ Goldman CEO Warns Remote Work Is Aberration, Not the New Normal, Bloomberg, February 24, 2021