COVID-19: Responding to people & work implications - A step by step guide by People Matters
COVID-19 has caught companies and industries off guard, with a shockwave of ripple effects tearing through their supply chains and business models. The challenges faced by workplaces have become a new front in the battle over the coronavirus.
Corporations around the world are grappling with how to best keep employees safe, while trying to ensure optimal utilization of their staff and business continuity— by asking employees to work-from-home, creating tag teams, etc.
According to a survey conducted by People Matters across India and South East Asia in March 2020, we found that only 38 percent of companies rated themselves as well or very well-prepared to support employees and their families and less than 50 percent of respondents have a cross-functional COVID-19 response team in place.
Here is a guidebook by People Matters that can help you stay updated on the policies by the government, employer relation best practices, and how you can escalate your efforts to take timely and right measures in this period of uncertainty.
Our perspective is based on our analysis of our recent survey, People Matters COVID-19 Impact & Measures Survey- March 2020, and interaction with industry experts. This perspective is current as of 22 March, 2020. We will update it regularly as the outbreak evolves.
People Matters COVID-19 Impact & Measures Survey- March 2020
People Matters, in an attempt to bring more clarity on how organizations are managing this pandemic, launched the People Matters COVID-19 Impact & Measures Survey – March 2020 survey across companies in India and Southeast Asia. The survey captured the responses from 276 organizations.
The key themes that emerge from the questions raised by the survey are:
- Work-from-home policy:
64 percent of organizations have already implemented a work-from-home policy for their employees. And 98 percent of companies who haven’t offered work-from-home will implement it if they see the situation deteriorating in the coming days.
While companies do see this practice as one of the effective measures to ensure safety, there still persists a long chain of questions being worked out as this shift occurs - motivation, alignment, connectivity, etc. This is especially going to be challenging for the manufacturing sector, as there are certain roles that could not be performed remotely.
- Pay policy for affected employees:
The survey asked participants if they have a pay policy for employees who cannot opt for work-from-home but have been asked to stay away from the work environment. Only 24 percent of companies said they have a pay policy in place. Among those 24 percent, most companies are offering salary under the current leave policy. However, few companies shared that they have extended a special pay leave of 14 and in some cases 28 days.
- Preparedness level:
The survey found that most organizations are still not ready to face the crisis that can arise. Only 44 percent of companies agreed that they are well or very well-prepared with policies that can support employees and their families and 47 percent of respondents so far have a cross-functional COVID-19 response team in place. Organizations’ efforts seem to be sporadic right now given the uncertainty, but they are acknowledging the situation and actively taking steps to protect employees and streamline business continuity.
Practices like a consistent communication plan in times of crisis (84 percent), suspending non-essential business travels (88 percent), and sanitizing workplaces on a more frequent basis (82 percent) have become a requisite.
Different practices that organizations are emphasizing on include reiterating and over-communicating policies around safety/precautions (58 percent), quarantining employees who recently visited highly affected areas (50 percent), restricting outside visitors/third parties (50 percent), quarantining employees exposed to confirmed cases (43 percent), and monitoring temperature of all employees at the entrance to the building (42 percent).
- Travel and meetings:
About 88 percent respondents have suspended non-essential business travel internationally and domestically, and another 50 percent have restricted outside visitors and third parties.
About 75 percent of organizations that participated in the survey have agreed that the outbreak of COVID-19 has halted critical business activities (traveling, meetings, etc.)
How to step-up your crisis management plan
The coronavirus outbreak that originated in Wuhan, China has spread to at least 144 countries and has sickened more than 204,000 people, with more than 8,000 deaths (click here for the latest data). Governments have shut borders and imposed quarantines, and companies have imposed travel bans. The human and economic impacts on businesses have been stark.
This epidemic is a wake-up call for companies to carefully review the strategies, policies, and procedures they have in place to protect employees, customers, and operations in this and future epidemics.
Here are four steps to rethink your talent strategy:
Things to watch out for:
- Employees’ Trust: Given the pandemic situation, there is a lot of anxiety and fear among employees around the layoffs, compensation, and employment. Organizations need to build a sense of safety, trust, and collective thinking in our people. Focus on your people in a competent and ethical way, and if you listen to their needs, you can drive up trust, teamwork, and resilience. The key is to balance short term and long term creatively.
Make decisions like work at home, social distancing, paid time off, financial assistance for testing, education on the virus that help individual people feel safe, protected and heard.
- Economic Slowdown: Economic slowdown is already affecting major industries like hospitality, travel, media, entertainment and many others will follow, and this will result in layoffs and reduced pay.
However, will layoffs and reduced pay really solve the situation?
Researcher Wayne F. Cascio from the University of Colorado's business school researched that cutting jobs isn't the answer. Companies need to change how the business is run as well. He notes that massive cuts lead to fewer sales people, less research and development, and a loss of high-producing individuals. The result is lower sales, reduced product innovation, and decreased productivity due to low morale. Cascio's research also points to increased costs for companies when they reduce the workforce. He mentioned IBM had to spend $700 million in 2008, just for employment restructuring. In Microsoft's case, the company is cutting both professional and factory jobs, many of which will be aimed at current Nokia workers, which were absorbed into Microsoft when it purchased Nokia's mobile division. The company says it will spend between $1.1 billion-1.6 billion to reduce its workforce.
Aside from losing talent and increasing some costs, there are implications for a company's stock price as well. According to a research by Cornell University it was found that the stock market may respond positively to companies that announce extensive restructuring, and may briefly lift the company's share price. But in the long term, the majority of companies that have instituted forced layoffs did not realize improved financial performance either on the balance sheet or on the stock exchange.
Organizations that can be innovative in adapting their product offerings, their business models and retain their best and most productive talent with creative ways to compensate them, will survive the test of times.
Things to ensure:
- All employers need to consider how best to decrease the spread of acute respiratory illness and lower the impact of COVID-19 in their workplace in the event of an outbreak.
- They should identify and communicate their objectives, which may include one or more of the following: (a) reducing transmission among staff, (b) protecting people who are at higher risk for adverse health complications, (c) maintaining business operations, and (d) minimizing adverse effects on other entities in their supply chains.
- Impact of disease on employees that are vulnerable and may be at higher risk for COVID-19 adverse health complications. Inform employees that some people may be at higher risk for severe illness, such as older adults and those with chronic medical conditions.
- Prepare for possible increased numbers of employee absences due to illness in employees and their family members, dismissals of early childhood programs and K-12 schools due to high levels of absenteeism or illness.
- Employers with more than one business location are encouraged to provide local managers with the authority to take appropriate actions outlined in their business infectious disease outbreak response plan based on the condition in each locality.
Coordination with state external icon and local external icon health officials is strongly encouraged for all businesses so that timely and accurate information can guide appropriate responses in each location where their operations reside. Since the intensity of an outbreak may differ according to geographic location, local health officials will be issuing guidance specific to their communities.
Business continuity plans
Work from home, limiting travel plans, and to an extent shutting production, organizations are in a dilemma: How to keep business operations normal without hampering the productivity and efficiency and maintaining the revenue.
A strongly developed crisis response capability is required to ensure the efficient management of incidents in order to minimise associated negative impacts, meet government priorities around maintenance and confidence, and to ensure the continued delivery of critical national infrastructure. Many organisations have these plans in place for the workplace and supply chain but COVID-19 has already unveiled flaws in some. Given the unknown variables surrounding the outbreak, it is important to review crisis and business continuity plans, develop different scenarios and put them to the test.
Some of the parameters you should focus on while working on the business continuity plan:
- Effective communication: Proactive communication for all stakeholder groups, based on factual information, is essential to manage public perception of the outbreak, minimise misinformation and associated panic, and reduce the detrimental impact on the economy and individuals.
- Workforce: Whilst the priority remains human welfare, we are hearing about other employee challenges. Examples include establishing the tax position of people who are moving between countries on an emergency basis, through to companies having to plan on putting production lines on pause due to supply chain issues, with the associated potential impact of asking employees to temporarily stop work.
- Supply chain: Where clients are reliant on supply chains in affected areas, rapidly depleting stock levels are becoming a significant risk and clients are working through strategies for alternative sourcing. In certain cases, clients are showing signs of distress and stakeholders (e.g. lenders) are concerned about the future viability of the business. We are discussing different potential scenarios and what these mean for their operations, for example, as cases of viral transmission emerge in different territories.
- Information: From our experience with working with various organisations during the Ebola and MERS outbreaks, the lack of complete and accurate information was preventing well-considered decisions being made regarding the resources needed to control the outbreak and treat infected individuals. Capturing the correct information and verifying its reliability is vital. Reliable information underpins both crisis planning and response and allows organisations to make informed decisions.
You can read the full guide by clicking on the following sections of the COVID-19: Responding to people & work implications - A step by step guide by People Matters:
- What should employers be doing in the current situation: Checklist to consider
- How are countries across the globe helping employers to respond to COVID-19?
- How are organizations around the world responding to COVID-19?
Disclaimer: This guidebook was published on 24th of March 2020 from data collected between March 8th to March 22nd 2020. The intent of this guidebook is to help build perspectives on what other organizations are doing and how you could help your organization in this critical time. Please take legal and compliance advisory before applying any of this information in your context.
- COVID-19: Implications for business : McKinsey
- COVID 19: information on how you can prepare your organisation and respond: pwc
- Coronavirus Response: People First, Economics Second: Josh Bersin