As businesses plan for the post-pandemic future, we’re finding that many changes born during this period have created lasting shifts in how companies support their employees in both the best of times and the worst. From improving work-from- home practices to enhancing how businesses attract and nurture more diverse workforces, here are seven key trends that show how 2020 has redefined our relationship with our jobs and our employers.
1. Rethinking Productivity and Remote Work
Post COVID-19, the white-collar workforce is poised to change fundamentally. McKinsey & Company estimates the remote workforce could quadruple in size.1 By many measures, productivity rose during the lockdown, yet many employees found that isolation sapped motivation and family demands interrupted work. In light of this, executives are setting a new tone by rethinking how best to capture the gains of remote work while reducing its downsides. Leaders are focusing on productivity by sharing best practices for meetings, surveying their employees, having more candid conversations with them, and exploring how to restore in-person gatherings when the time is right.
2. Hiring and Keeping Top Talent
To survive the economic downturn in 2020, layoffs were a wrenching necessity for 59% of chief executives.2 Heading into 2021, a growing share of business leaders are looking to refill those spots.3 And the wave of workers cut loose during the lockdown offers a rare opportunity to remake and upgrade roles with an infusion of new talent and unique perspectives from other industries. Leaders are diversifying by hiring people with disabilities, as well as those from military backgrounds or untapped geographies.
3. Boosting Workers’ Mental and Physical Wellness
Facing rising anxiety, many Americans devoted extra time to their mental and physical wellness during the pandemic. Sales of both meditation apps and home fitness gear surged.4 At this moment, companies are broadening the definition of wellness and extending more support at home and at work to help employees de-stress. For instance, they’re providing services like personalized coaching to address financial stressors. For mental health, some firms are offering virtual therapy and meditation benefits that can help repair the performance-robbing harms of stress and depression.
4. Updating Workplace Benefits for Millennials
Even as the U.S. workforce grows increasingly multigenerational, millennials are emerging as its biggest cohort and its most potent source of change, particularly around job flexibility. And while millennials have in the past been notoriously quick to switch firms, that’s changing as they become more committed to bigger roles and their responsibilities grow. Research from PwC suggests that companies can further boost retention with millennial-friendly policies, such as expanded equity ownership, more accommodating work-from-home rules and flexible vacation terms. What’s more, firms are pleased to find that non-millennials like these policies too.
5. Addressing Diversity to Improve Hiring and Retention
Even before the convergence of 2020’s crises, employees — particularly women, people of color and LGBTQ communities — faced tougher financial challenges, such as higher student debt levels and retirement shortfalls, compared to other groups. While these issues can be highly stressful and distracting for employees, companies can now address the unique financial realities of specific segments and help these employees be more productive and confident. For instance, leaders are advancing benefits that pay down student debt and customizing financial wellness plans that serve the specific needs of many historically marginalized groups.
6. Reframing Open Enrollment to Deepen Engagement
As remote workers encounter new challenges and needs, companies are rethinking how and when they communicate about benefits and open enrollment. After all, it is the most important opportunity they have to improve the financial and overall well-being of their workforce and their families. To do so, HR decision-makers are engaging employees early and often, and introducing new benefits and financial wellness programs. More companies are widening the availability of equity compensation and retirement planning; some are strengthening mental and health coverage; and many are adding benefits that enhance care for children and adult dependents.
7. Deepening Trust With Extra Financial Support
Now more than ever, people trust their employers as a vital part of their financial safety net. During the pandemic, 46% of companies reported an increase in requests for 401(k) loans and hardship withdrawals; 27% said they fielded increased calls for pay advances.15 Against this backdrop, it’s increasingly important for companies to stay abreast of their employees’ financial health; to target communications to those at risk; and to open up financial wellness programs to staff and their families. Companies are also examining the potential benefits of extending health coverage to gig workers and evaluating the impact of high-deductible health plans on the financial wellness of specific employee segments.
The Bottom Line
The past year has stressed workers and their families like few before. And while the challenges of adapting have come at a cost, encouraging, long-term solutions are emerging. While companies continue to reckon with the pandemic and its effects, they’re taking the opportunity to address the evolving needs of employees and build a deeper relationship with them.
As your company navigates this new landscape, Morgan Stanley at Work is here to help guide you and your employees toward financial confidence and improved well-being, at work and at home.
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Check out the original here, with animated data graphics and full footnotes: https://www.morganstanley.com/atwork/articles/seven-trends-work-life-2021