As the UK begins to ease lockdown, a number of businesses are beginning to look at how they can return to some normality – although many still have a long way to go to understand what the ‘new normal’ will look like for them – and to consider what they have learnt from the unprecedented challenges presented by the pandemic.
Many employers recognise their crucial part to play in facing ethical, social and even environmental challenges going forward. One way to do this effectively is by engaging with stakeholders in a meaningful way on such matters, to create renewed shared and sustained values that help lead to success in the long term.
Many businesses will need to keep financial costs down for some time to ensure they can continue operations and be prepared for any further slumps in the economy that may occur. This may mean that, although businesses are appreciative of the hard work of their employees during this difficult time, bonuses and other financial rewards will not be a viable option. Whilst businesses recognise a need to retain and incentivise their key employees and executives, they must consider how they are able to strike the right balance for those who have experienced pay cuts, furloughing and redundancies.
Through a renewed employee engagement strategy and a focus on creating an equal and diverse workforce, businesses can look to the future of recruiting and retaining the best talent in this ‘new world’, post-COVID-19.
The pandemic has seen an increased focus on ensuring meaningful consultation with staff at every level, in seeking to save jobs and ensuring workplaces are ‘Covid-Secure’ to protect the health and safety of employees.
The unique circumstances in which we have found ourselves led to calls for a culture shift and a rethink of National Minimum Wage and the value of certain roles, all of which will likely form part of the wider discussion about the future world of work. Many businesses have also been encouraged to pay greater attention to recognising the hard work of their employees, supporting employee mental health and wellbeing, and embracing the ideas of staff members. These are all important factors that can lead to a greater job satisfaction and in turn, employee retention.
To date, employee share ownership and share incentives have typically been reserved for senior management but, as we move forward, more companies may choose to extend employee ownership to the wider workforce. By offering share incentives as an alternative to cash incentives, companies can also benefit from significant cash flow advantages where finances may have been impacted by the lockdown. With careful consideration, a share incentive proposal can be beneficial for employers, whilst also demonstrating commitment to long-term investment in employees.
Finally, it is important to consider how employees can be more involved in company decisions. Despite a pledge in 2016 to make it mandatory for companies to include worker representation on boards of directors, the government backtracked and announced it would not be compulsory for employers. Instead, companies were given three options: invite an employee to sit in on the board meeting; designate a non-executive director as the workers’ champion; and/or create an employee panel – however compliance is still not mandatory. The pandemic and resultant changes may well encourage directors to revisit this idea and consider the structure of their companies, in order to find new, innovative ways to involve employees in strategic decisions and future planning.
Equality, diversity, and inclusion
Much of this conversation is being driven by a commitment to equality in the workplace and – in the wake of recent events in America and the resulting protests and campaigning driven by the Black Lives Matter movement for equal rights – businesses globally have been forced to reflect, with many expressing their commitment to equality and diversity and taking action to enforce this.
In a similar way to how employee representation should feed in at board level, creating a working group to champion equality and diversity will likely be the first step in implementing a Diversity Action Plan. This would allow employees to share their ideas or concerns and encourage a review of any company practices they feel do not meet this commitment. While a zero-tolerance approach to discrimination, bullying and harassment in the workplace must continue, recent events have shown that this alone is not enough.
It is important to acknowledge that no change can be instant, and these types of initiatives require time and energy to get them right. Companies must implement equality and diversity training for their current workforce, which should educate staff about the full range of protected characteristics – bolstered by meaningful sessions to promote understanding and inclusion of those from ethnic minorities, the LGBTQ+ community, and individuals with disabilities. A lack of representation at board level cannot be addressed without encouraging access for entry level roles through mentoring schemes and training programmes for all young people, regardless of their social and economic background or ethnicity.
Whilst we have already seen a focus on the Gender Pay Gap, which UK companies have been required to report on since April 2018, the government consultation in respect to the Ethnicity Pay Gap reporting – which closed in January 2019 – is yet to be actioned into policy. It is essential that all businesses recognise the importance of racial and ethnic diversity in the workplace and understand that real diversity is advantageous to them and something that should be actively sought after and specifically incorporated into the company’s recruitment and HR strategies.
The COVID-19 lockdown has meant that many of us have become accustomed to working from home. While this was initially enforced to prevent the spread of coronavirus, many businesses have begun to see the benefits of this and will look to revise policies to promote agile working in the longer term too, which will help to diversify recruitment going forward.
Not only has reduction in people travelling around the country had a significant impact on reduction of carbon emissions, many businesses will also be seeing the financial benefits of this by saving money on travel costs and expenses. There has also been a real push on hosting meetings and other social events virtually – often to much greater success than expected – and this looks set to continue to some extent beyond the pandemic. This is not only beneficial for the environment, but it also enables employees to have a greater sense of flexibility and, potentially, productivity at work.
While companies may be apprehensive to implement large, costly changes in the current climate –such as financial rewards and introducing electric vehicles or solar energy for example – businesses can still bring about positive change in a number of ways, including giving employees company time to volunteer for a cause that’s important to them, actively involving them in company decisions, or by encouraging flexible and remote working to reduce time spent commuting and improve overall work/life balance.
A business that actively promotes diversity and acceptance while addressing important issues like equality head-on makes for a more rewarding place to work and for a more motivated and engaged workforce. While change can be difficult to implement, it is evident that there are only positives to be gained from businesses prioritising responding to environmental, ethical and social challenges, and from focusing more on what employees want to see from their employer and encouraging engagement and recognition across the business.
Charlotte Smith, Senior Associate in the Employment team – Walker Morris LLP