Fighting Covid-19 and building the future Human Resource Capital

The unprecedented lockdown has resulted in a mad scamper to solve a range of employee-management issues. Few are urgent, few are critical, many are both, and the result is that most companies have been caught off guard.

Businesses have been affected differently. Many had to temporarily shut down operations, others had to try to fulfil the sudden spike in demand while ensuring safety of employees and thus had their hands full. Tough times, indeed!

However, this is not just a phase of panic and stress to be followed by prolonged gloom. In fact, this is indeed the right time to ride the wave and redesign the future-ready operating model that can give you a competitive advantage. Naturally, this should begin with weathering the storm, minimising the losses, steadying the ship and then, laying the foundation for the future model.

To emerge from this as a winner, it is critical to focus on high-priority challenges surrounding people management. In our view, there are four key themes that need focus:

a) Ensuring employee safety, wellness and engagement

b) Driving productivity for staff in work-from-home model

c) Managing rising employee costs and

d) Rethinking the future operating model

These also seem to be top-of-mind issues for most CEOs and CHROs across companies, as corroborated by a set of 15 CHROs with whom we interacted in a recently conducted webinar.

Over-communication is necessary

Irrespective of whether you are already running operations or expecting to restart soon, your employees need attention, and several companies have already made tangible progress. Social distancing norm adherence, minimising travel, restricting 20 people to occupy a 40-seater bus, inspecting tunnels at entry points, making PPE available to those coming to work, and sanitising frequently and stringently are examples of measures that are being taken.

It is critical to go well beyond what the government authorities have prescribed. Further, a slow and gradual ramp-up of operations is the recommended plan for coming out of the lockdown, including retaining work-from-home for as many employees as possible. As far as engagement is concerned, the entire circle of CHROs whom we conversed with endorse the view that it is important to over-communicate with employees (transparently and frequently), in this phase of anxiety, to maintain connect with and amongst employees.

Driving productivity for staff in work-from-home model

Work-from-home is the new concept for majority of Indian workforce, and this poses a twin challenge — some are not used to juggling household duties and work and a vast majority of households don’t have the infra to facilitate productive work.

We recommend a set of smart and cost-effective measures. For instance, make office infra available to select employees, plan long-term measures like child-care allowance for select permanent work-from-home roles, etc. This is an opportunity to not only reduce office rentals but also go for a long-term operating model choice that can benefit several employees.

Managing rising employee costs

With an expected fall in revenue across sectors, of 10 to 40 per cent, employee costs will become a burden for all. We suggest a three-part answer to keep this in check.

1) Freeze all discretionary spends (travel, conferences, hiring, etc.)

2) Postpone all committed expenses, where possible (deferment of bonuses and increments)

3) Undertake salary cuts, if necessary — drive this top-down and shield lower levels

The last dimension is the holy grail: Headcount.

The objective guidance is to assess two factors: Expected time for recovery and current employee expense compared to industry benchmark. If your recovery is far out and you are already carrying a sub-optimal headcount, then this force majeure event has only accelerated a decision you would have had to take. Below framework has a few recommended actions.

Rethinking the future operating model

The future operating model will need more thought. However, what we are certain of, in terms of the impact of this pandemic on future operating model, is that organisations will get leaner and leverage digital, work from home will become a permanent feature for select roles, teams will be agile squads that will be put together for projects and enhanced and dedicated capability for crisis management will be an imperative.

In summary, companies need to now use the pandemic as an opportunity to prepare their organisations for the post Covid-19 world. They must prepare for the inevitable changes and must swing into action at the earliest. And, timing is most crucial at this point if companies want to equip themselves with the much-needed competitive advantage.

(Pravin Devanathan is Principal, Kearney, a global management consultancy firm)