Respond — Return — Reinvent: Business as Abnormal
Business leaders are now dealing with relaxation of many COVID-19 restrictions, including a return to work — and possibly reimagining their business models.
By Neil Lloyd, Head of US Defined Contribution and Financial Wellness Research, Mercer
A month ago, Mercer’s Asia CEOs hosted a webcast where they discussed being at the leading edge of the epidemic, and how they were dealing with the recent relaxation of many of the COVID-19 restrictions, including return to work. This is a topic that has been gaining a lot of attention in the U.S. lately, and I thought several observations were particularly relevant to employers who are just now beginning to contend with these issues:
- Returning to work is not that simple, and senior managers have admitted it was taking more time to figure out than they had initially expected or appreciated.
- For example, Singapore had seemingly managed its epidemic instance early on, yet in early April had to go on lockdown again as a result of a second wave of infections.
The contours of this pandemic were predicted in Tomas Pueyo’s March 19, 2020, Medium article, “Coronavirus: The Hammer and the Dance,” in which the national lockdown, which he called the hammer, would eventually morph into the dance, in which certain sectors of the economy could reopen, including schools and some factories — but at some risk of secondary but less severe outbreaks. Both sides of the equation, Pueyo thought, would take weeks, not months.
Within Mercer, we have been sharing a similar view of the current- and future-state pandemic response lifecycle, as represented by the following illustration:
Like the hammer phase, the current state is concerned with the peak of the outbreak and the response of employers to execute business disruption plans and support for workers. The future state — the dance, if you will — is largely concerned with companies reopening and attempting to reduce the potential for resurgence. The illustration reveals the complex reality of the environment that both employees and employers are now experiencing, an environment none of us has fully experienced before.
Balancing employee needs and organizational objectives — with empathy
Viewed through this lens, a key component of how we advise clients on retirement and financial wellness issues, at any time but clearly during a crisis, is that first we both need to understand the diversity of a company’s employee demographic and their varying needs and, second, we need to reasonably balance those needs against organizational objectives.
I had the opportunity to talk with Will Ferguson, a Senior Partner in Mercer’s Career business, about some of the discussions the firm has been having with clients in this regard.
Neil Lloyd: Will, could you briefly outline what this respond-return-reinvent continuum means for organizations and employees?
Will Ferguson: As we think about how companies and employees will experience the pandemic, we are envisioning a progression from “respond” to “return” to “reinvent.” However, these phases are not necessarily sequential, as you can see from the looping arrows in the illustration. We believe that we will likely see cycles between “respond” to “return” and then back to “respond.” However, as we think more about “return” questions, we need to realize that the “return” is not necessarily the end state. In fact, as companies go through these cycles, there are opportunities emerging to reinvent the business model or people programs. In some cases, these opportunities will be imperatives for the future success of the business. Indeed, they may separate the companies that thrive in the future from those that don’t.
NL: What can employees expect as companies go through these various stages of response, return and reinvention?
WF: The current situation is clearly testing our personal resolve, readiness and resilience. Our experience as employees will be a mix of progress, lack of progress/regression, refinement of approaches, and then moving forward again. So, we have to be prepared for a variety of work environments that we can’t predict, while at the same time find new ways to be adaptive and supportive of each other. If organizational leaders do this well, we should see a clear initial focus on employee safety, naturally evolving into ensuring well-being. This transition generally will help employee engagement and productivity.
NL: From an employer’s perspective, what do you see as being the critical factors that will distinguish the most successful companies?
WF: If companies are able to navigate the respond-return-reinvent cycle well, and provide the type of employee experience described above, they will emerge with a happier, more engaged, productive and resilient workforce. In other words, while most companies clearly will need to manage costs amid revenue uncertainties, the eventual winners will also focus on employee engagement along the way. I think it will be through active employee engagement that companies will be able to find the opportunities to reinvent their employee experience while also finding the ways to reinvent their business models.
NL: Any final words of advice?
WF: Empathy toward employees is important and retirement benefit communications need to carefully consider the assumptions and realities that all employees are confronting. With all the uncertainty and the disruption in work and personal routines, this is a time to emphasize some basics in human interaction. Take the time to connect with people, beyond a perfunctory, How are you doing? As social distancing has changed all our typical methods of interaction, it’s critical to take the care and extra steps to personalize our day-to-day relationships.
NL: Thanks, Will.
Further thoughts on wellness and retirement security
In thinking through Will’s comments from a financial wellness and retirement-plan perspective, the “reinvent” stage seems especially intriguing. In the current environment, retirement security may not be the greatest priority for either employees or employers. But retirement security remains somewhat central to addressing the problem, since retirement savings are an essential underpinning for COVID-19 hardship distribution and loan provisions authorized under the CARES Act. Without available retirement savings, those provisions would have no impact.
To illustrate the need for empathy, a plan sponsor mentioned this week that they had been planning a “maximize the company match” campaign. But they soon realized that the outreach to participants would need to be postponed. Given the company’s large number of furloughs and layoffs, it would have seemed insensitive to the difficult circumstances many people are dealing with.
Everyone recognizes that the post-COVID-19 world likely will be different. But how different? Where different? The drivers of what it takes to build and sustain a successful organization may change by a little, or by a lot. And they will affect people programs that employers offer, including retirement plans. There is little doubt that employees could have benefited from, and in the future may really need, broader financial wellness initiatives such as emergency savings, financial coaching, short-term loan facilities or simply helping people repair their credit scores.
In the meantime, I’m back to WFH (working from home) and yet another Zoom call.
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