Last year ended with the FDA approval of Pfizer’s COVID19 vaccine and the vaccination of the first US health care workers on Monday, Dec. 14. The US still has several months of rising COVID19 infections and deaths before 60 percent of its citizens can be vaccinated, significantly slowing the pandemic’s contagion.
On the week before Christmas, the Cleveland Indians Major League Baseball team announced dropping its 105-year-old moniker “Indians,” long criticized by Native Americans and many fans as racist. In a year of worldwide disease and death, unbridled racism and sexism, and dramatic changes in healthcare, shopping, and the world of work, this is another in a weekly litany of change.
As we move to 2021, our world of work will continue to change dramatically, and mostly for the better. Here are my five predictions. As you read them, ask yourself, “Is my company taking steps to address these issues?”
First, the remote and hybrid workforce is here to stay.
Research has consistently shown that the vast majority of managers and workers are as productive or more productive than working from home than they were in the office. Research in May from Global Workforce Analytics showed that 70 percent of remote workers and their bosses believed they were as productive or more productive than before March. In a September survey of 330 human resources leaders by the Conference Board, 47% of respondents reported an increase in productivity at their companies, while only 13% reported a drop.
Research reveals that innovation and product development are accelerated by a combination of in-office work and remote work. The in-office work is for dialogue, staff and project meetings, building relationships and aligning employees to the company’s culture and strategies. The remote work is for reflection, analysis, and writing up reports.
Research consistently shows that half of those working at home want to continue to do so for two to four days a week. The previously cited report by Global Workforce Analytics shows that half of those working remotely wish to continue working from home for two to three days a week. The Conference Board report found that one-third of respondents expect that 40 percent or more of their total employees (not just office workers) will continue to work remotely for at least three days per week during the 12 months post-pandemic.
These changes mean the office will switch from being an open bay cube farm to being part of an ecosystem that provides workers and teams with the time, space, and technology for where and how they work. In 2012, long before the pandemic, I was part of an executive team at Medtronic in Santa Rosa, CA, that implemented a hybrid office environment that allowed 45 percent of the employees to work from home three to four days a week, based on the technology, space, and time they needed to perform well on the job. If most of their work was done via the computer with good broadband and most of their communications were fine by telephone, videoconferencing, and chat, they could work from home. Employees whose work was tied to research and development labs and equipment, manufacturing, or data to proprietary to be on the internet had to come into the work.
Our offices transitioned to being the principal meeting place. The physical design focused on videoconference meeting rooms, team project rooms, huddle rooms, and individual office space for those who had to come in to the office or chose to go into the office five days a week. You can learn more about our design here.
Second, new operating norms are needed to optimize productivity, innovative and work-life balance.
With our transition to a hybrid office environment, we quickly learned that we had to redefine the operating norms for which meetings would be in the office or held by phone or attended by videoconferencing. We had to figure out how to connect with each other instantly, and declare our rules for sharing data and ideas and making decisions—when everyone was not in the office. The environment we created was extraordinarily successful and flourishes today. The productivity of our remote workers increased by 22 percent. We were able to save $2 million a year by closing no longer needed real estate. Our in-office workers’ productivity improved by nearly a half-hour per day because of our redesigned office environment that provided more meeting rooms and upgraded videoconferencing technology. The reduction of employee commuting to the office led to savings of 6,750 commuter miles and the reduction of 408 tons of carbon emissions per year.
Third, companies that invest in digital reinvention for internal operations will be the winners.
Our success with remote work and creating a new hybrid office ecosystem could not have happened without investments in digital technology. We invested heavily in improving broadband, videoconferencing technology, and chats. Despite these investments and upgrading the carpets, paint, and office equipment of our offices, and doubling the conference rooms, we still had a 100 percent return of investment in only one and one-half months.
Our experience is not alone. Research by McKinsey and Co. shows that during economic recessions (such as ours) the companies that lead with investment for digital reinvention on their operations emerge as the winners in transforming themselves and dominating their domains with first quartile financial performance.
The companies that now invest in digital technology to support remote workers productivity and experiences, the hybrid workforce, and their internal workflows in Supply Chain, HR, IT, manufacturing, will be the winners. This includes broadband, share sites, AI-driven big data analysis, videoconferencing, and chatbots.
Fourth, US labor shortages will worsen, and one of its solutions, diversity, is on the ropes.
Before the pandemic, headlines in business journals screamed about the US labor shortage. The US actually had 25 months of more job openings than unemployed workers. The pandemic cloaked our labor shortage, but it still exists. If it is not alleviated, it will negatively impact the growth of the US economy, our living standards, and our way of life.
Manpower reported that seven in 10 companies had talent shortages in 2019, the worst level ever and a jump of 17 percentage points from just a year ago. That is more than three times higher than a decade ago. The US Labor Department reported that at the end of 2019, there were more than 670,000 job vacancies than unemployed workers. Labor shortages exist in high tech, manufacturing, supply chain, retail, and services.
The continuing trend of retirement for baby boomers, reduction of women in childbearing ages, the drop-in pregnancy rates, limits on skilled and unskilled immigration, and anemic productivity improvement rates are all cited as causes. We also know that the US has had a prolonged economic trend of higher unemployment among blacks, Hispanics, and Asians than whites. As our COVID19 recession has turned to a “K” shaped recovery, employment of minorities has trailed employment of whites. This represents a US source of labor needing training and outreach.
Despite the outrage over the death of George Floyd and the Black Lives Matter movement, minority unemployment has not recovered as well as unemployment for whites. Furthermore, young women have been affected by the pandemic disproportionately from young men. Women are dropping out of the labor force to watch over the distance learning of their children and to attend to aging parents.
The benefits of employing women and minorities in corporations are clear. A series of McKinsey and Co. studies show that financial performance improves when companies reach parity with trained minorities and women in their workforces, management, and on their boards.
My prediction is that the US workforce shortage and progress on diversity will worsen. However, companies that have the will and values to be diverse and follow through on the long-term strategies to improve diversity will emerge as the leaders in their domains.
Our nation also needs to find the will to understand the value of skilled and unskilled immigrant labor that has powered American economic growth, invention, and innovation for each generation. The US can implement a sane immigration policy that lets US companies and health care providers recruit the workers they need while controlling our borders and not exacerbating unemployment for US citizens. For more on the empirical research that shows the benefits of immigration to the US workforce, see Chapter 14 of my book, Hack Recruiting.
Fifth, wellbeing at work has become worse and needs to be addressed.
Before the pandemic, a topic getting increasing attention was employee wellbeing. Wellbeing is more than the concerns of employees with mental health issues. It includes employee’s chronic health issues such as obesity, happiness at work, and employee engagement. Poor well-being manifests in higher absenteeism, presentism (which is being at work but not at the employee’s fullest capability) and poor health. Some experts have calculated the hidden costs of poor wellbeing can cost a business nearly $10,000 per year per impacted employee.
Since the pandemic, employers have reported that employee wellbeing is worse. Employees have spent more time working, more time in meetings, experienced more burnout and mental health issues. Employers have also reported a decrease in work-life balance, engagement, and morale.
These are the findings of the Conference Board report I mentioned earlier. All of this is a recipe for disaster. If employee wellbeing is not addressed, employees will begin to make their own choices to find new employers or cut back their hours at work.
The Wall Street Journal reports that a November survey by public relations firm Weber Shandwick finds that 66% of people polled were planning to make a shift like switching jobs, moving out of town or cutting their hours to part-time as the pandemic continues.
The first step companies can take to improve wellbeing is work on their operating norms. When we implemented a remote and hybrid workforce in Santa Rosa, CA, our requirement that all teams to set up their operating norms was critical to our success. (See above).
These operating norms included the provision that each worker would work out with their managers the time each day they would be available for work and when they would have time off from work during the day and evening. In our case, this prevented the excessive work and burn out identified in the Conference Board study.
The second step is to promote employee wellbeing. This would include offering valuable (not limited) mental health benefits and promoting good eating, exercise, and wellness. Another key step in employee wellbeing is to make sure the office environment has natural lighting and fresh air exchanges. It is also crucial to prevent the spread of disease in the office, such as by providing six feet of separation between office work stations and taking measures to avoid bathroom problems such as the dispersal of microscopic particles as a result of flushing a toilet.
Finally, continuing to offer employees the opportunity to have time to exercise, practice yoga, or meditate also promotes wellbeing.
We will all be happy to see an end to 2020 and the terrible disease and death caused by the pandemic. But returning to the “normal” we knew before is a pipedream. Companies that want to leapfrog their competition will take action to address these five predictions above.
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting, managing partner of InnovationOne, and Sales Advisor to MeBeBot. He works with companies to transform HR, implement remote work, recruit executives, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: the Best of Empirical Research, Method and Process, and Digitization. Subscribe to his weekly blogs at www.VictorHRConsultant.com.