The Future of Work: Workplace Trends for 2021 and Beyond
For almost a year, COVID-19 has forced a workplace “experiment” with distributed work that represents a remarkable achievement for U.S. workforces and worksites. The percentage of Americans working some from home jumped from around 25 percent to more than 60 percent essentially overnight, and most of those workers report a nearly seamless transition.
Many of the workplace changes necessitated by COVID-19 are likely to impact how we will work long after the pandemic ends. Some employees have found that they like working from home, at least some of the time, and with fewer workers on-site full time, many employers are considering reducing real estate footprints to reduce costs.
But this rapid shift in how Americans work has accelerated a number of workforce trends that will require changes in employer approach—from both a legal and business perspective. Five key trends we believe will influence work beyond 2021 are:
An Increased Expectation of Flexibility – in Work Location and Work Time
The pandemic has not only shifted where we work but when we work as well. With child care centers closed and schools also shifting to distance learning, many of us had to adapt our work schedules around the needs of our children. The work day for many is now chunks of time spaced out over day and night. These circumstances have thrust flexibility and adaptability to the forefront of critical skills for today’s employers and employees.
After nearly a year of this “new normal,” we can see that some employees can work remotely all of the time, without any loss in productivity. Many office or technology workers fit into this category. Another segment of employees simply must be on site to perform their jobs, perhaps to operate a piece of equipment or engage directly with customers. Examples include many employees in the manufacturing, retail and healthcare sectors. And then there are those employees who can work remotely, but with diminished returns in terms of quality of work or productivity. In the education sector, many parents, teachers and students recognize that while school can be done remotely, the quality is usually better when conducted in person.
Employers have an important opportunity at this stage of the work-from-home period to assess exactly what is working and what isn’t. What tasks are being done well, which aren’t, and which aren’t being done at all? By looking beyond job titles, employers can map out essential functions and activities, and reimagine work flows in order to anticipate tomorrow’s workplaces and the expectations of tomorrow’s workforces. Employees expect increased flexibility, both for the benefit of the employer and employee, yet whether distributed work is really the way of the future for employees depends on the job tasks and activities to be done. While employer investment in technology is an important element, some functions can’t be performed as well remotely – and in-person work at least some of the time will persist. Employers will be challenged to create a work environment that optimizes flexibility for employees, but also facilitates maximum productivity. And the workers of the future are expressing a willingness to work less than the workers before them, necessitating a fresh look at how to deploy technology and structure the work roles of tomorrow.
The long-anticipated shift from hierarchical work organizations to flatter, more collaborative workplaces will accelerate. It will be critical for management to acquire the skills necessary to manage (and lead) employees from a distance on a long-term basis. Relatedly, we expect new technologies for monitoring worker productivity to surge, and a resultant increase in worker privacy laws at the state and local level.
It will be critical for management to acquire the skills necessary to manage (and lead) employees from a distance on a long-term basis. Relatedly, we expect new technologies for monitoring worker productivity to surge, and a resultant increase in worker privacy laws at the state and local level.
And while the transition to work-from-home has been relatively seamless, employers are uncovering administrative challenges in a distributed work model. For example, workers may live and now work from a different state than their official workplace – raising tax withholding and employment law questions for human resource professionals. Companies are becoming multi-state employers, if they aren’t already.
Enhanced Support of Employees for Engagement and Retention
The pandemic certainly has given employers an increased awareness of employees’ personal lives, as tabletop Zoom calls blur the lines between work life and home life. That portal into employees’ personal lives also has given employers insights into the unprecedented physical and mental drain its employees are experiencing.
Quite simply, life is hard during a pandemic, even for people fortunate enough to still be working. The most successful employers are those that are working to help ease the burdens felt by rank-and-file employees, as there is a clear link between employee mental and physical well-being and their levels of workplace engagement and productivity. Offering benefits such as access to mental health services, employee wellness programs, paid time off to address health and wellness, and workplace-sponsored or subsidized childcare can go a long way toward giving an employer a competitive advantage in recruiting and retaining top talent. Leading employers are already increasing support in these key areas and this trend is likely to continue even after the pandemic subsides.
The pandemic has also revealed holes in the societal safety net, and we anticipate a surge in legislation addressing workplace wellness issues (such as mandating more paid time off, new paid sick time mandates, and increased minimum wage requirements) at both the state and federal levels. To the extent this is accomplished at the state and local level, this will create a patchwork of compliance issues for employer.
Increased Expectation of Employer/Organizational Social Responsibility
This trend is one that undoubtedly makes many employers uncomfortable, but it is something that must be addressed head-on.
Today, there is a growing desire among employees—particularly young workers—to work for companies whose values align with their own. Surveys have shown that employees are much more likely be highly engaged at work if they believe their employers are working toward a greater good and that workers expect companies to take stands on issues that impact the public good, including the environment, equal justice, immigration and Constitutional rights. A 2015 study by the Lewis Institute for Social Innovation at Babson College and About IO Sustainability found that a commitment to corporate social responsibility increased worker productivity by 13 percent—and could improve employee turnover by as much as 50 percent. So building this type of social capital can be a significant asset for a company looking to improve employee loyalty and retention. Corporate social responsibility can be a real opportunity to drive employee engagement.
Leaders will need to choose causes wisely, to assure inclusive values-alignment. No doubt, though, society’s current divisiveness will carry over into the workplace. Not every stance will be popular with every employee or stakeholder.
An additional step all employers should take now is to create or review workplace policies for employee behavior both inside and outside of work, including on social media. Employees should have a clear understanding that their actions outside of the workplace can impact their employment and how their employers will address misconduct.
The COVID-19 pandemic hasn’t impacted all groups in the same way. Women in the workforce have been disproportionately affected by the changes brought about by the pandemic. For example, in December 2020, the number of U.S. jobs held by women fell by 156,000, while the number of jobs held by men actually increased slightly (by 16,000). These pandemic-related shifts will only exacerbate the existing gender pay gap.
Women in the workforce have been disproportionately affected by the changes brought about by the pandemic. For example, in December 2020, the number of U.S. jobs held by women fell by 156,000, while the number of jobs held by men actually increased slightly (by 16,000). These pandemic-related shifts will only exacerbate the existing gender pay gap.
However, given the significant economic impact of this issue and growing awareness, more pay equity laws are on the horizon. So this is a time for employers to address the gender pay gap directly, before lawmakers, regulators and public pressure force their hands.
The first step is to conduct an internal pay equity study to identify any systemic barriers to equal pay in the workplace. This should be done with the assistance of experienced compensation consultants and subject to the attorney-client privilege. This will provide necessary data to employers to remedy issues inherent in their compensation systems now.
Many older workers and those with serious health risks may face challenges in returning to work during the pandemic. Also, the workforce is aging and growing increasingly diverse. We reasonably anticipate a rise in discrimination claims, especially in the areas known as reverse discrimination, as well as claims for retaliation and discrimination based on age, religion, ethnicity and national origin and disability.
We reasonably anticipate a rise in discrimination claims, especially in the areas known as reverse discrimination, as well as claims for retaliation and discrimination based on age, religion, ethnicity and national origin and disability.
Companies should consider their anti-discrimination and accommodation policies to ensure they meet the needs of employees and protect the company. Management training is particularly important to help minimize the risk of incidents that lead to discrimination claims.
Expected Workforce Reductions and Closings
The COVID-19 vaccines give the world tremendous hope that 2021 can see a reopening in the not-too-distant future. However, manufacturing and distributing the vaccines will take several months, so in the short term, expect continued slowed economic growth. The anemic January 2021 jobs report speaks to the long road to recovery still ahead.
From a workforce perspective, the continued economic uncertainty likely will mean many companies increasingly will look to independent contractors and temporary workers. Changes are afoot in worker/independent contractor classification that deserve attention from in-house counsel and HR professionals before a company invests heavily in a rented workforce.
And in any economic disruption, there will be winners and losers. Revising policies on reductions-in-force, separations, and employee severance plans may be important steps for employer readiness for the days ahead. Even as workplaces reopen, some employers will benefit from deploying incentives to encourage voluntary attrition in certain job classes and workforces.
There is a place past COVID-19 – how will we prepare for it? The answers to that question will determine which companies emerge from the pandemic ready to thrive and which ones will continue to struggle. The best place to start is with a thorough examination of operations and policies to ensure they meet the needs of the current and post-pandemic workforce.