A company’s talent pool can be its most important asset. The COVID-19 crisis has made this abundantly clear, and has demonstrated how critical it is for companies to manage that asset well. If human capital matters weren’t at the top of most boards of directors’ agendas before the pandemic, they likely are now.
That’s why our recent webcast about the most important risks for boards to monitor put talent and workforce issues front and center. Among those joining me was Carrie Duarte, a PwC partner who works with companies on these topics every day. What follows are some of the most important takeaways from that conversation.
The competition for top talent is fierce. How a company plans to bring employees back into the workplace, and how much flexibility it plans to give them with regard to where they work, can be a differentiator and competitive advantage. More than half of employees want to work remotely three days a week or more post-pandemic, and almost three-quarters say the shift to working from home has been successful. That suggests that companies offering a hybrid or fully remote work environment are likely to have a leg up.
But it’s important to consider more than just where employees work. Here’s a prime example: Many companies started offering a wider range of benefits during the pandemic, such as access to mental health resources and childcare coverage. These were intended to support employees through the crisis. So now companies wonder: should they be continued? The current workforce may be relying on them, and job candidates may be attracted by them. Some firms are even adding new benefits to enhance employee wellbeing as things transition back to normal. At PwC, for example, we’ve begun paying our people a small cash bonus when they take longer vacations.
Boards’ oversight should include how the talent strategy is changing to ensure their companies are staying competitive. If companies aren’t changing their policies to attract and retain the best talent, this can create greater risk. It’s important for boards to monitor the company’s recruitment and retention efforts with information and metrics to assess company performance.
In the middle of a crisis, it can be tempting to see diversity and inclusion efforts as a luxury. Nothing could be further than the truth, as the past year’s protests against racial injustice made crystal clear. In fact, companies should bring a DE&I lens to all of their human capital conversations. This includes a focus on whether the company’s plan could be disadvantageous for workers from underrepresented minority groups.
Many boards are diving deeper into D&I efforts across the employee base, focusing on how D&I is integrated into employee recruitment, onboarding, development, advancement, and compensation. They can also take this opportunity to look at their own practices. When it comes to succession planning for top executives, is the board considering a diverse pool of candidates? Are high performers from underrepresented minority groups getting the chance to step up into bigger roles?
These questions can be difficult to answer without adequate data. When it comes to D&I, directors should ask management teams for the numbers. Dashboards can be an effective tool to monitor key trends over time. But it’s important to go further and examine longer-term goals and the strategy to achieve them.
With many employees working in a remote environment, the pandemic put a strain on corporate culture. Our data shows that only about a third of employees feel their employers are succeeding in creating an inclusive work environment, providing effective ways to collaborate, and fostering a sense of teamwork and togetherness.
As the widespread availability of vaccines allows more and more workers to return to their workplaces, companies will want to look for ways to strengthen corporate culture and address any concerns that have arisen during the pandemic. Boards have a role to play here. A dashboard can help track data from engagement surveys, exit interviews, customer feedback, and other sources. By arming themselves with the right information, directors will have a better chance to spot worrying trends before they do real damage.
Even companies that traditionally had a strong corporate culture may find that some of the changes they made to cope with the pandemic are worth preserving. Leaders who were once reluctant to make decisions quickly may have been forced to be more decisive when faced with a crisis. Teams that previously operated in silos may have built new habits thanks to the collaborative tools that made remote work possible.
The human capital implications of the pandemic are huge. The COVID-19 crisis has made it imperative for boards to expand their human capital oversight. Those that rise to the challenge can help their companies emerge stronger as they plan for the post-pandemic world.