Looking back to December 2019, who would have thought a global pandemic would have all of us hiding our “2020 Vision” business plans in a desk drawer before the beginning of Q2?
The University of Minnesota Center for Infectious Disease Research and Policy tracked the COVID-19 outbreak from the beginning. As of December 31, 2019 there were only 27 reported cases…all of them in the city of Wuhan in the Hubei province of China.
Within 12 months, the number of total cases around the globe spread to almost 70 million in December 2020.
That was not in my 2020 vision. Was it yours?
No one has a business strategy for that kind of sea change in the marketplace. And so, we improvised – managing each new challenge as we encountered it. In the process of leaping from peak to peak across the multiple crises in 2020, we learned to conduct business in new ways.
Based on trends established during the 2020 Coronavirus pandemic – combined with Pfizer’s vaccine receiving FDA approval – here are three fearless predictions for business as America returns to the workplace in the new year.
1. Evolving Social Contract Between Employer and Employee
One thing business learned in 2020 is that organizations largely kept up and ran more productively when employees worked from home. Company productivity was above average. In just about every team that consulted with inclineHR, the results from this year have been outstanding.
While it may seem counterintuitive that personal productivity rises with less facetime, we found an interesting maxim in place: People crave engagement and will invent ways to sublimate that craving.
Remote workers have missed the socialization of an office, and they have compensated by trying to stay hyper-engaged and hyper-focused. While we no longer had water cooler conversations, we made up for them by connecting with teammates in a more-collaborative way. Some teams blazed new trails in workflows and systems due to the limitations imposed by social distancing and work-from-home models. It all stemmed from individuals rising to the occasion and finding efficiencies they didn’t even know existed.
Overall, meeting volume increased. And as teams spent more time planning and coordinating, productivity increased in the virtual workspace. This has started wheels spinning within the brain-trust of HR departments.
Are we ready to amend the social contract between business and labor?
Our first prediction for such an amendment in 2021 would include a general openness with geography for job seekers. A lot of people who want to grow their careers, but are not able to relocate for personal reasons, are going to have many more opportunities available. Even organizations that are posting openings with a preferred location are now willing to have a conversation with top applicants about their home base, whereas before, this was non-negotiable.
Who cares if your star performer is Zooming from their office two floors up or from their home two time zones away, as long as the results are outstanding? Business learned to look at remote offices differently during the pandemic.
Virtual workers have no commute time, and in some markets no commuting makes a huge difference in work-life balance. With this new deposit of personal hours into their time bank, workers reciprocated by investing some of their windfall hours into completing projects. Not only do virtual workers produce more, they also incur less business travel expenses. It’s the perfect recipe to diminish fall through for the company books.
2. Migration of Workforce
Now that corporate America has found efficiencies exist within a virtual work environment, certain job vacancies become much more competitive. Hiring managers will now consider candidates who are able to apply for jobs well beyond their former geographic limitations. Desks that once were full in an office or cubicle are now being occupied in a remote, home office.
This migration of labor away from a central office location will send ripples through commercial real estate. Where big corporations once occupied all the space in their towers, they’ll be forced to pare down to a few floors. The right business tenant will be able to lease office space at some very toney street addresses in 2021.
Some workers may change employment but not physical workplaces, because their workplaces are in their homes. As Coronavirus vaccines prove effective in the coming months, other employees may eventually return to the office, but not for a full 40 hours every week. Some simply won’t come back at all. Employees who have been marginally engaged, or actively disengaged during the pandemic, will choose to find new employment rather than return to the workplace with their current employer. These workers have simply been hanging on for months, and now wish to get out of the “survive” bucket into the “thrive” bucket. Their choices are to re-engage in their current position or to seek new opportunities. Those new opportunities may necessitate changing cities.
Pew Research Center published a survey in June 2020 that states 1 in 5 U.S. adults either moved due to Covid or know someone who did. The largest portion of those respondents who relocated are adults 18-30. Not only are many young adults in a state of flux geographically; they are rethinking career options and marketability of their degrees, too. It’s no secret what skilled trades salaries offer. Many state governments and private employers are funding trade school scholarships to entice young adults into the trades. The value proposition of huge student loan debt for advanced degrees just isn’t there anymore. We learned in 2020 that if you tell a Millennial his job isn’t essential, he’ll quickly find one that is.
On the other end of the demographic range, Boomers and older Gen X workers will take advantage of remote work opportunities to pursue “lifestyle” employment. As long as basic communication infrastructure exists, now is the time to buy that retirement home on the beach and telecommute. Older employees will take early retirement buyouts or transition into semi-retirement because they value their lifestyle over career at this point. This migration of experienced workers out of the labor force creates opportunities for beginners and student labor.
Ultimately, there will be more churn. The challenge for talent acquisition professionals is to attract and retain the talent that complements their organizations.
3. Safety Nets Extended Again
The coming year offers hope for W2 employees, 1099 contractors, and small business owners. The message from corporate to key employees is “we’ll work with you to drive and define your career where you are.” Companies will be willing to develop career management plans for top talent that include flexibility in location. In an effort to retain valued workers, the new company goal is to get the “best” out of people, rather than the “most” out of people. The “best” results follow employee satisfaction proportionally.
The pandemic and remote work environment has taught management the importance of inspiring and motivating employees. Companies should be willing to engage and appreciate workers as they return to the workplace. Wal-Mart recently gave quarterly bonus checks to frontline employees who are working harder in a risky environment. Expect more big business to recognize that labor is not expendable; instead, their people’s extraordinary efforts are why companies have been able to stay afloat – or even experience record profits – during these unusual times.
At the most basic level, consideration of employee health and safety will remain intact, even after the vaccine is widely distributed. Facility cleanliness and employee handbook policies that prevent spread of disease are here to stay, because business has learned to value and protect its soft assets.
States are following suit by passing legislation that gives relief to working families. Covid has underscored and given a better understanding of the struggles of everyday Americans. The number of people who are one paycheck away from financial ruin – who depend on frontline, minimum wage jobs – feeds the movement to raise the minimum wage in many states. Several New England states are granting paid leave benefits under the FMLA. Funding to replace lost wages for eligible recipients comes from state income taxes.
Interestingly enough, this seems to be a decentralized movement led by the States and progressive companies to provide a living wage and a social safety net to the average worker. Will that change more to a Federal initiative after Inauguration Day? We prefer to stay out of politics but will predict more stimulus programs as the country recovers from the Covid pandemic and its economic impact. Expect future pro-business initiatives to benefit more small business owners rather than Fortune 500 companies.
A Test Case
As this post-Covid social contract evolves in 2021, we hold forth a vision of unity. America’s best response to Covid-19 and the threat to our economy must rise to the level how we banded together after the 9-11 attacks. Regardless of political party or ideology, we should have each other’s backs and do what’s best for the common good. Management and labor both lose when the ship sinks. Conversely, all interested parties stand to survive when willing to make concessions.
The first decade of this new millennium (2001 – 2010) was disastrous for the airline industry. Carriers suffered through brutal economic downturns, skyrocketing fuel costs and workplaces turned into terrorist targets. During those ten years, almost every airline in the U.S. declared bankruptcy. Almost.
Southwest Airlines was the lone exception. The company grew. It did not lay off a single employee or ground a single flight to save money. Instead, SWA expanded its service to replace routes lost as competitors pulled out of cities. It was during this last serious threat to the industry that Southwest became the largest domestic airline in America.
How did this plucky, lovable, cut-rate airline manage to pull off such a coup?
Southwest’s labor relations have typically fared far better than its competitors because of a commitment at the highest levels of Leadership to cooperate with the unions and its positive employee culture. The culture shared among Southwest employees has been the airline’s winning edge for 49 years.
“Southwest’s business model is not rocket science,” says Kevin Freiberg, the coauthor of the best-selling book Nuts! “You can fly point to point the way they do, you can hire the way they do. Just take their model and emulate it. But what you can’t emulate is the culture and spirit of the people.”
At Southwest, employees come first. Customers come second, and stockholders come third. The rationale is pretty simple. If you treat your employees right, they’re going to treat your customers right. If customers are treated right, they will come back to travel with you again, and your stockholders will benefit. Moreover, if you’re committed to treating employees right, it stands to reason that you should treat the labor unions that represent your employees differently.
While air travel is down 90% year over year, Southwest remains the best performing stock in the sector – down only 40% — but still way down. In December 2020, the Dallas-based airline sent federally mandated 60-day notices to 6800 employees that their jobs may be at risk, unless Congress passes additional bailout money or Southwest can reach cost-cutting agreements with the labor unions. This is the first time in company history Southwest has threatened to play the layoff card.
We remain hopeful Southwest Airlines can resolve all its collective bargaining agreements in 2021 by practicing these values found on the company message board:
- To disagree without being disagreeable.
- To avoid character assassination and vilification when things don’t go our way.
- To learn to listen, not just for the sake of being courteous, but with a goal of genuinely understanding and evaluating another point of view.
- To learn to appreciate the value of loyal opposition.
- To learn that we are not always right.
- To be willing to compromise and appreciate the value of joint resolution of disputes.
- To understand that a short term “win” at any cost can be destructive to a long-term relationship.
Southwest Airlines, along with every other customer service operation, owes its success to the indefatigable employees who performed under the constant threat of falling seriously ill in 2020. Regardless of how the Southwest bargaining works out, we stand on our fearless predictions of how businesses will find new ways to affirm and reward employees in the new year.