HRM in the COVID-19 context: How to deal with it from a HRM perspective?

Blog > HRM in the COVID-19 context: How to deal with it from a HRM perspective?
We took some time to interview our lecturer Aco Momcilovic, the owner of FutureHR about dealing with COVID-19 from a HRM perspective.
First of all, we would like to ask you in general how does COVID-19 affect the overall organization and its employees?

The first reactions were not that surprising. At first, shock, then denial and finally anger. I think that some employees are already in the depression phase and some are rather in denial. On the organizational level we will see how resilient some organizations are and how their management is prepared and willing to make swift changes. What some surveys discovered is that a significant proportion of companies is not able to survive the crisis that will last for more than 3 months. Similar answers are on the individual level. Employees are having reserves for only a few months. Collected data from the US and the UK show that these negative consequences are particularly harsher for younger workers, those with unstable employment relationships and lower labor income.

How to maintain regular communication with the employees and ensure productivity/performance?

There is a clear division of companies and professions that can work from home and those who cannot. Therefore, some of them made the transition more easily, and then there are those who are forced to digitally transform in a short period of time. Thus, there was a joke that COVID-19 is the best Digital Transformation manager. However, a lot of companies are unable to respond in the short-term and therefore result in blockage. If we talk about those who are still working, the rise in the use of virtual meeting tools is significant. In some cases, we can even witness more productivity due to the higher focus and performance of the employees.  While in some occupations a high share of tasks can be done from home (e.g. business and financial operations), this is not the case in other occupations (e.g. food preparation and serving). Also, individuals with a higher annual earnings report are able to do a much higher proportion of their tasks from home. They are also more likely to report that they have already switched to working from home over the past few weeks.

From an HRM perspective, how do you recommend companies manage employee absence?

If employees are unable to work because of the lockdown or other pandemic measures, the first priority of the management is to reduce the fixed costs. Hence, to negotiate with their stakeholders to postpone everything that could influence cash flows dramatically. As we witnessed in the USA, a large number of people got fired – they are now at more than 20 million unemployed people.  However, the real challenge will be to hire those people again when and if this crisis will be over. This is the time when we will differentiate ethical and moral companies that really consider their employees as the most important asset of their company, and those who do not. For example, medical insurance will be an important topic –  the decision not to show up at work when feeling ill is particularly difficult for a person without paid sick leave and little savings to fall back on. For instance, in the UK more than half of the workers in ‘Personal Care and Services’ have no paid sick leave despite working in close proximity to others. Maybe this is the time to rethink some of the benefits for the employees.

What are some ways to ensure employee support during the COVID-19 crisis?

One thing is for sure, clear and transparent communication. In this uncertain time, people value strong leadership. So even if you have to deliver bad news, there are certain ways to do it properly. If there is motivation, there are many measures that can be implemented and through which the company can show flexibility and care about their employees. From flexible working hours, work from home, short time salary deduction to keeping the working places, upskilling employees etc. Another important thing is to reduce policies and adjust guidelines. Employers should be empathetic, understanding and flexible as workers try to navigate the unexpected changes to their lives. In the mid-term phase, employers should mitigate risk and educate their employees – for example they should refrain from forcing employees from traveling to countries with a higher risk of infection.

How do you think that the workforce will adapt to the changes brought on by COVID-19?

This one is not that easy to predict. Some trends will for sure happen faster. Cards will be dealt with again, and some positions will emerge as a new essential role. First there will be a change in consumer behavior, and as a consequence companies and their strategies and products and services will adapt and transfer those changes to the employees. Some positions will be inevitably lost, but we should focus on the new and creative ways of doing business, so we can create new chances for the employees in the new economy. The need for constant education and improvement will be stronger than ever. Those who have the habit of learning will be in a significant advantage. We can expect a permanently flexible future – there will be a significant, permanent, transition to a more remote workplace—even when COVID-19 clears, this new normal will be sustained by fears of the next pandemic. Polarization of work life balance will happen – while working from home is both convenient and comfortable, it can be difficult for professionals to separate home and work life.  Work will become more agile – as teams become more separate with remote work, many will begin collaborating with other employees, especially since online collaboration tools make connection easier.

What is your perspective on employees working remotely during the COVID-19?

We can only be thankful that these opportunities already exist. Laws regarding that will be changed fast and it is great to see that the number of professions is at least for the time being, transferring to remote/ online way of working. So, we have psychotherapist talking to their patients, doctors doing basic examinations, and teachers working with their students, all done remotely. Also there is a sustainability angle – remote work takes the mental and physical stress out of going into an office, but it also has a significant impact on the environment, which people will begin to take note of. For example, there would be a 20% reduction in energy consumption by reducing the in-office work week down to four days. The majority (88%) of organizations now either encourage or require employees to work from home, whether or not they have shown coronavirus-related symptoms, according to Gartner research released on March 19, 2020.

Any recommendations from an HRM perspective? How do you think that COVID-19 will affect the employees/organization? What do you think will change in the organization or perhaps be implemented?

First of all, HRM should get involved in cash flow predictions. The second basic thing in which I was consulting some companies is to do the list of key employee and succession plans. In this time of distress many decisions are done in a hurry and are not optimal. Those simple procedures will enable any management to do what is necessary, but with the long term vision. Depending on the severity of the problem, it will be critical to recognize and keep key performers in the company. If that does not happen, there is no amount of money or state subsidy that will save the company.  And corporate culture shifts will be inevitable, as M. Beer said in a Harvard Business Review interview: “The corona virus challenge, like any crisis, provides senior management a huge opportunity to develop a trust-based culture rapidly or, conversely, if not handled with an organization-wide honest conversation, to undermine their ability to develop a trust-based culture for years to come”.