February 10, 2021 – While executives have long recognized that well-being is important, the COVID-19 pandemic brought home how significant it really is. Work and life, health, safety and well-being became inseparable in 2020. Amid unprecedented workforce disruption from the COVID-19 pandemic, organizations are enacting radically new ways of working and operating – and the C-suite is taking action to reimagine the future of work with human capital issues at the top of its agenda.
Executives are shifting preparedness strategies from planning for the familiar and are instead synchronizing across the C-suite to develop human-centric strategies that allow organizations to better adapt to ongoing disruption. Deloitte’s 2021 Global Human Capital Trends report, “The Social Enterprise in a World Disrupted,” examines how organizations and leaders can leverage the lessons of this pandemic to fundamentally reimagine work, shifting from a focus on surviving to the pursuit of thriving. Completed by more than 3,600 executives in 96 countries, Deloitte’s Global Human Capital Trends report included responses from more than 1,200 C-suite executives and board members.
Reimagining Preparedness and Workforce Potential
The report shows that human capital issues are at the center of leaders’ thinking as they shift organizational views on preparedness. In the 2021 report, 17 percent of executives said that their organizations would focus on planning for unlikely, high-impact events moving forward, as opposed to just six percent before the pandemic. Interestingly, the percentage of company leaders who leveraged the lessons of pandemic to plan preparedness for such events in the future, has remained almost invariably low (six percent). Nearly half (47 percent) said that their organizations planned to focus on multiple scenarios, notably up from 23 percent before the pandemic. To effectively deal with multiple possible futures and unlikely events, the importance of real-time workforce insights and data as they set new directions has become even more critical.
However, Deloitte found that the most important factor in making that preparedness shift is unleashing worker potential through a new focus on capabilities. Almost three-quarters (72 percent) of executives said that “the ability of their people to adapt, reskill and assume new roles” as a priority for navigating future disruptions. However, only 17 percent of these same executives said that their organization was “very ready” to adapt and reskill workers to assume new roles, pointing to a substantial disconnect between leaders’ priorities and the reality of how their organizations support workforce development.
“The COVID-19 pandemic revealed the resilience of the workforce. When workers were asked to expand their roles to accomplish whatever was needed, they rose to the challenge,” said Erica Volini, principal and global human capital leader, Deloitte Consulting. “No longer are human capital issues relegated to HR. Amid disruptions, organizations either sink or swim based on their workforce’s capabilities like collaboration, creativity, judgment and flexibility. It’s clear that workforce and human-centric matters are top priorities for C-suite and board leaders.”
“Moreover, only a small proportion of executives – 16 percent globally – noted that during COVID-19 HR makes a positive impact on building workforce skills and capabilities,” said Olena Boichenko, director of human capital advisory services at Deloitte Ukraine. “On the one hand, this can be explained by the fact that HR had a number of other priorities on their agenda, including protection of the workers’ health and safety. However, by ignoring the need to focus on employees’ learning and development today, the companies are reducing their chances of achieving success in the future.”
C-Suite Collaboration is Critical to Set New Workforce Direction
HR is beginning to embrace the new critical role of re-architecting work and setting a new direction for the workforce itself. Due to HR’s adept handling of COVID-19’s challenges, the percentage of HR executives who are very confident in the department’s ability to navigate future changes in the next three to five years has doubled from one in eight in 2019 to nearly one in four in 2020. Among business executives, the proportion that were “not confident” in HR dropped dramatically from 26 percent in 2019 to 12 percent in 2020.
With the CHRO at the helm, propelling this level of organizational change requires collaboration and leadership across the entire C-suite. In fact, survey respondents identified leadership as the top factor that drives change. As executives of large organizations begin to re-architect work, however, they have identified some barriers that they will need to overcome, such as too many competing priorities (57 percent), lack of readiness (43 percent), lack of future visioning (27 percent) and limited financial resources (20 percent).
“The global pandemic has brought the best out of many leaders and organizations, as much of the C-suite has demonstrated a level of transparency and empathy almost never seen before,” said Ms. Volini. “Continuing to build on this new level of leadership collaboration, capitalizing on uniquely human capabilities, and using real-time data to re-architect work will enable organizations to develop and sustain long-term growth.”
Integrating Humans and Technology to Re-Architect Work
The report shows that executives are increasingly shifting away from the optimization of automation and moving toward re-thinking how to best integrate humans and technology to complement each other and drive organizations forward. Sixty-one percent of executives said they plan to focus on reimagining work in the next one to three years, compared to only 29 percent before the pandemic. COVID-19 has heightened leaders’ awareness of the potential benefits of this approach, including higher productivity, increased agility and greater innovation.
During the pandemic, Deloitte found that organizations used team structures to enable greater adaptability, which allowed them to better survive an unpredictable year. Leaders are increasingly recognizing the value of “superteams,” combinations of people and technologies designed to leverage complementary capabilities and pursue outcomes at a speed and scale that would not otherwise be possible. Executives in this year’s survey recognized that the use of technology and people is not an “either-or” choice, but a “both-and” partnership. The top three factors for transforming work were organizational culture (45 percent), workforce capability (41 percent) and technology (35 percent) – factors that must all work together for an organization to assemble effective superteams.
Integrating Well-Being into Work
As the lines between work and life blurred even further during COVID-19, leaders moved from prioritizing work-life balance to designing well-being into work – and life – itself. In fact, 69 percent of executives reported they implemented policies during COVID-19 designed to empower workers to better integrate their personal and professional lives. Among executives, seven in 10 said shifts to remote work had a positive impact on well-being.
“Although the top priority of executives for the next three years in the context of transforming work is slightly different, other priority goals are the same, including reducing costs and increasing innovation,” Ms. Volini said. “However, executives ranked improving well-being as their second-to-last ranked priority. These results are counter to the expectations of workers themselves, as they ranked improving well-being within their top three priorities. This points to an ongoing debate about how the focus on well-being will be sustained in a post-pandemic world.”
“Organizations that integrate well-being into the design of work at the individual, team and organizational level will build a sustainable future where workers can feel and perform at their best,” said Ms. Volini. “The pandemic has shown us that human-centric work strategies are not just a nice-to-have, but a need-to-have. Moving forward, those leaders who address human capital holistically and build business decision-making around human potential will thrive.”
Winners and Losers
Jeff Rives, chairman and CEO of Chapel Hill Solutions, said that his firm has adjusted by “introducing a new pay-for-performance solution” that has been well received by clients. “It greatly helps their cash flow because many are being affected financially by this pandemic economy. We knew we had to take a modern and proactive approach to help our clients during a challenging time. We are excited at the productivity and positive feedback of our unique search solution. The firm has introduced new technology to aid our clients’ vetting process and help our internal team serve our customers better.”
Mr. Rives said his firm has seen the balance of working from home versus collaborating with team members to be a challenge with clients. “And we have seen CHROs being challenged with keeping employees motivated while they are either quarantined at home or working on the front lines.”
The Deloitte article notes that overall well-being of employees might have improved at some organizations, Mr. Rives said. “We are surprised by these findings as we are finding many executives and workers being laid off due to financial consequences from the COVID-19 pandemic. We have seen this effect has caused extreme challenges for some organizations and employees alike. We clearly see there are winners and losers in this economy. We think it is encouraging that executives are noticing this and taking action to focus on their employees to improve their well-being and productivity. We think there is more work still to be accomplished at this point.”
“I have been a proponent of working from home, or at least working flexibly, for 21 years,” said Patricia Lenkov, founder of Agility Executive Search. “In fact, I have done this myself for the past two decades and have seen the benefits that it provides and the productivity that can ensue. As such, the physical effect of COVID-19 has been minimal. On the other hand, interactions with clients and candidates are best done in person (at least some of the time). This has been difficult but because everyone is experiencing the same limitations, we all seem to accept the situation as it is. However, most of my clients have met finalist candidates in person in a safe and socially distant manner before making final hiring decisions.”
COVID-19 has expedited a trend that was already happening with Millennials and Gen-Z who view work and workplaces in fundamentally different ways than their boomer predecessors, Ms. Lenkov said. “They tend not to separate work and home and want to move seamlessly between the two and as digital native’s technology is all pervasive and allow them to be productive from almost anywhere.”
CHROs and senior leaders were tested in 2020 in previously unimaginable ways. “At the outset of the pandemic, it was crisis management and triage,” said Ms. Lenkov. “However, once the immediate impact of COVID-19 was dealt with, CHROs and senior leadership had to go back to their focus on their businesses and the tasks at hand all the while maintaining attention to the ever-evolving challenges of the pandemic. In many cases this meant that although physically apart, teams became closer. The vulnerability felt by everyone regardless of position and seniority meant an appreciation of human capital in new and profound ways. It is encouraging to see that human capital is finally receiving the attention it so deserves. While our public markets require constant attention to financials, the pandemic has caused a mass awakening to the reality that no human capital means no financial capital.”
One Solution: Interim Hires
“We developed several consulting offerings that are relevant to dealing with the impact of COVID-19,” said Mike Harris, co-founder and CEO of Patina Solutions. “Examples include supply chain optimization, operational plant management, crisis management, and IT security to deal with many more remote workers. We needed solutions that would keep us relevant and most helpful to clients. At the same time, we ensured the solutions mirror and complement the skills of the Patina professionals who support our clients. Our professionals consistently share with us their strengths and interests digitally and also through conversation. It’s an important part of the balance between their engagement and our opportunity to serve clients exceedingly well.”
“No matter the industry or role, we see leaders are finding it difficult to budget and plan since nobody knows when the COVID-19 impact will be a thing of the past,” Mr. Harris said. “At the same time, keeping our employees motivated, productive and connected is difficult in these times – but very important. Zoom meetings and cocktail events, regular calls to keep everyone up to speed – believe it or not more newsletters, we even did a company cookbook. In these times, HR leaders often need to innovate, as well. To help a company thrive, many bring in interim leaders to solve a problem quickly and cost-effectively, without adding full-time headcount. Others are filling roles with interim-to-hire professionals, giving both parties the opportunity to find the best cultural and talent match before making a full-time offer.”
An Agile Mindset
“Digital transformation is a huge focus on the work we are doing now, but that transformation goes well beyond technology,” said Anna McCormick Kelch, co-CEO of LPA Search Partners. “It depends on leaders who can adapt and drive an agile mindset into their organizations. These are fundamental changes within corporate cultures, and let’s face it, change is scary for most people.”
There is an urgent need for improved communication married with learning and development, Ms. McCormick Kelch said. “I believe that employees will begin viewing upskilling as a company benefit,” she said. “They are going to be attracted to companies that invest in them and provide new opportunities. Yes, companies need to continually develop talent for their own growth, but employees are going to demand it. It’s a different kind of parachute in an uncertain world.”
“Prior to COVID-19, cold calling prospective candidates involved a lot of electronic back and forth,” said Steve Kohn, president of Affinity Executive Search. “People didn’t really want to talk, and even when they did, they were a little stingy when it came to referrals. Since COVID-19, people really want to connect with another human being and seem to desire the phone conversations. Once in the conversation, they are eager to help others via a referral. Recognizing that people are feeling more concerned about their fellow humans, we also started donating 10 percent of our profits to charity (usually food related), and reward successful referrals by making donations to charity in the name of the referring party. People like this attitude and vibe very much, and it’s help keep business reasonably stable even during these trying times.”
The biggest obstacles are related to candidate/employee psychology. “People want to be home, and don’t want to relocate unless it’s absolutely necessary, mainly because people are clinging to family/friends/community and value these connections more than ever,” said Mr. Kohn. “Also, in some cases, there is relocation hesitancy because of the fear of family separation due to sudden quarantine situations that have arisen.”
In many cases, people would rather be unemployed than work on site or relocate. “Having seen that many jobs can be successfully executed remotely and via zoom meetings, many senior leaders are now offering remote options for their employees into the future, well beyond after COVID ends,” said Mr. Kohn. “Obviously this can’t be done for manufacturing or healthcare roles, but where it can be done, it looks like it’s here to stay. It’ll be interesting to see how companies address the compensation issue moving forward.”
Collaboration is Key
“Being a boutique of seasoned executive search professionals spread across the country, our operations have not drastically changed,” said Dave Westberry, managing director at BridgeStreet Partners. “We have always been very hands-on and highly collaborative. But, like most people, instead of conference calls and in-person interviews, we moved to video conferencing. And, we recently have moved to a new, much more dynamic database to ensure that our clients continue to receive the best service possible. “
As the Deloitte study points out, the HR function and the C-suite are collaborating much more than in the past. “Organizations are moving quickly to recruit seasoned HR executives that are experienced in working at the C-suite and board level and know how to provide the leadership necessary to integrate ‘well-being’ into the workplace,” said Mr. Westberry.
“This crisis has made it crystal clear the importance of the ability to adapt for everyone throughout an organization,” he added. “Capabilities such as collaboration, judgment, and flexibility are top priorities for the C-suite and board alike. We agree that it will take the CHRO in collaboration with the entire C-suite to drive the changes necessary to be successful in implementing the new human-centric work strategies required for the future.”
New Ways to Assess Talent
Mike Myatt, founder and chairman of N2Growth, said his firm’s business expanded last year. “In addition to continuing our work on board and C-level search assignments, we have also been leveraging our research group to provide better, deeper and more insightful talent analytics and market trends to our clients,” he said. “We have always had an emphasis on the professional services side of the business. We offer services similar to a Forrester, Gartner or GLG, but focused on talent mapping (by industry, sector, vertical, micro vertical, company, competitor set, geography, role, and function). The search industry’s traditional process of using a long-list, short-list approach is an antiquated and woefully insufficient way to assess talent in a complex and rapidly shifting market. Providing our clients with a data / information advantage allow them to create a talent advantage even in times of rapid market movement.”
COVID-19 has caused global shifts in the mindset of employees that have substantially impacted workforce dynamics and corporate culture, Mr. Myatt said. “Some companies have made the over-due and necessary adjustments quickly and effectively, while others have struggled or worse yet, have tried to maintain a business as usual approach,” he said. “Switched-on executives have realized they can shift business models and operational constructs to take advantage of the new normal.”
“The best companies operate with a people first mentality which have given them a strategic advantage in navigating rapidly changing markets,” said Mr. Myatt. “The war for talent changed almost overnight. The smart companies have shifted from a localized approach to talent acquisition to a truly global approach. The best executives have realized they can work for anyone from anywhere, and this has created significant opportunities for both employees and employers.”
Rotating Buddy System
“As a people business, our response focused on care and engagement, keeping us all well-connected, professionally and socially,” said Chloe Watts, partner, people and culture practice (interim) at Wilton & Bain. “We have a rotating buddy system amongst teams to keep people connected with colleagues they don’t regularly work with – replacing the ‘side of the desk’ conversations and monthly town hall sessions switched pretty naturally to digital form. We have also adopted a social networking tool called Hi Right Now which is like speed dating with your own colleagues. It’s a great way to catch-up with each other and has a degree of spontaneity as you don’t know who is going to be in your sessions.”
“For those living on their own or with challenging working space, we re-opened our London office with COVID-19-secure adjustments for the latter half of 2020,” Ms. Watts said. “However, the most recent U.K. lockdown in January has prevented this in 2021. One of the biggest challenges is ensuring people get enough time away from screens. The whole firm was awarded holiday from 18 December until the new year to enable an extended break away from the beck and call of email and virtual calls. We can also take an extra day off each month that we are in lockdown. For working parents, we are funding childcare support during this most recent lockdown.”
Ms. Watts praised Deloitte’s annual human capital report as a venerable source of insight and forward thinking. “In many respects, much of what it covers was already on the agenda for proactive people leaders, however the last nine months has seen a marked acceleration,” Ms. Watts said. “As an example, the well-being agenda has sometimes lacked the commercial rationale to warrant investment: this has irrevocably changed. Reskilling and unleashing potential has been the holy grail of talent management and with better data on people, organizations are becoming better at understanding, developing and deploying capability.”
“Agile methodologies first used in tech businesses and now beyond also support deploying the right resource to the right work at the right time, linking with the concept of ‘superteams’ that Deloitte mentions,” said Ms. Watts. “Harnessing technology to make teams more efficient has happened overnight all over the globe. Where Microsoft teams used to be an icon on the periphery, it is now a baseline tool. Zoom’s enviable share price hike and Salesforce’s acquisition of Slack demonstrates that tech-enabled collaboration is here to stay.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media