11 Ways COVID-19 is transforming Human Capital Management 

03/27/2020

Who would ever think that Human Capital Management could change so much in such a short period of time?

The emergence of the new pandemic is completely restructuring the way companies manage their human capital. In this article, you will learn about the 11 ways this current situation is reshaping HCM.

11 Ways the pandemic is changing human capital management

Human capital management has been reshaping in the past several years, and these changes are even more visible during the pandemic that is currently hitting the world.

The way we manage employees and communicate with them has changed notably during the past few months. Therefore, employees across the world are adjusting to the new situation and are required to make several changes to their current human capital management initiatives.

Below you can see how human capital management is different now as well as what are the priorities that employers are focusing on the most.


1. The transformation to remote work

Companies embracing remote work and virtual collaboration is the most impactful thing employers can do today to address the increasing complexity of the current health and economic crisis.

Businesses across the world are being forced to switch to remote work. Social distancing has been proved to help stop the pandemic from spreading. It is important to understand that this switch is not a negative thing in the business world. According to flexjobs 90% of employees say that allowing for more flexible work arrangements and schedules would increase employee morale, while 77% say allowing employees to work remotely may lead to lower operating costs.

However, employers and managers who are not used to managing and communicating with remote employees are struggling to keep their teams connected and help their employees stay as productive as possible.

In fact, only 50% of employees believe they would be equally or more productive working from home as opposed to their normal work location.

Therefore, remote Human Capital Management is a challenge many employers are facing these days. 


2. Enhancing online working environments

As technology can significantly ease a company's Human Capital Management efforts, employers who have digitilized their internal processes earlier have now a big advantage.

The ones that still haven't are now forced to build new online working environments so they can continue running the business as smoothly as possible.

In other words, digital transformation will happen naturally during these times as this is the only way to really foster online working environments and enable our employees to do their jobs successfully.

As digital working space requires continuous employee communication and collaboration, providing access to online communication tools and collaboration platforms is critical. This is why we are now seeing companies across the world implementing internal communication and employee collaboration software solutions.

3. The increasing priority of employee communications

Beyond making clear and decisive technology decisions, it's also critical for leaders and other internal communicators to rethink the way they are managing their people during the pandemic. A baseline requirement is to consistently communicate change and its impact on the organization with clear, concise and consistent messaging.

Human Capital Management professionals have been saying that we have to make our employees our top priority. Being employee-centric is especially critical during times of crisis - how you manage and treat your employees during times like these indicates how your company is positioned as a corporate citizen.

With the shift towards remote work, work-life boundaries are getting blurred. Therefore, open and frequent communication is key for setting expectations on how groups will collaborate and come together.

Additionally, keeping employees informed about the latest company and local authorities' updates is more important than ever before. Employers also have to continuously communicate and remind employees about the import COVID-19 safety tips.

4. Building better employee-manager relationships

Employees never pay more attention to their managers than during times of crisis. During these times, employees are expecting their leaders to offer clarity, creativity, and empathy.

As leadership is an important part of Human Capital Management, managers now need to build strong relationships with their employees by communicating clearly, concisely and regularly.

This communication can include critical information like how to access health benefits, and sometimes it can be a simple touchpoint reminding employees that their well-being is important.

Therefore, it is important to have trusted managers who practice empathy and authenticity when delivering these messages during stressful times. Now is the time for managers to build better relationships with their teams and rebuild the trust that they may have lost in the past.

5. Eliminating fear and miscommunication in the workplace

The economic and labour crisis created by the COVID-19 pandemic could increase global unemployment by almost 25 million, according to a new assessment by the International Labour Organization (ILO).

The same way you are now reading this information, your employees have probably read it as well. Can you imagine the amount of fear among your employees right now? They are probably scared about losing their jobs and their future overall.

No matter how serious the situation is, the worst thing you can do is to leave your employees in the dark. Your employees are now communicating with each other and probably going through some worst-case scenarios. That is what people tend to do when they feel scared.

If you want to eliminate this fear and stop the spread of misinformation among your employees, support the social dialogue in the workplace and engage with your employees in a truthful and honest way.

6. Redefining crisis management

Human Capital Management, as well as Crisis Management in these critical times, are drastically changing How? Here's the key to changing the paradigm on crisis management defined by PwC:

Instead of viewing people as your weakest link in a crisis, see them - and the culture you foster - as your single greatest potential strength.

Additionally, this situation is a big crisis preparedness test for employers across the world. Many of them had never been in such a crisis, and there has never been a global crisis that came so fast. The agility in Human Capital Management and Crisis Management is crucial for stopping this pandemic from hurting our businesses further.

For that reason, most organizations across the world are now assessing and redefining their current Crisis Management strategies.

7. Encouraging teamwork and team dynamics

Now are the times for Human Capital Management professionals to foster collaboration and teamwork in the workplace. Not only that remote work requires better collaboration among employees, but the multidisciplinary crisis management teams must be as cohesive as possible.

In the midst of the unfolding pandemic, it is crucial for legal, PR, internal communications and other departments to be on the same page regarding whether, when, and how to disclose any pandemic-related issues both internally and externally.

Team dynamics tend to be amplified by a crisis, and coordinated actions are extremely important. In addition, connecting people within an organization and encouraging two-way communication is the only way to enable employees to collaborate efficiently.

8. New policies, procedures, and other Change Management initiatives

Many employers are now forced to make significant changes to their internal policies and procedures around crisis management, employee salaries, benefits, leave and vacation options. Some are even experiencing considerable layoffs.

This is why change management is now becoming one of the most important subfunctions of HCM.

If you have to make tough decisions to maintain the health of your business, you need to work with your business leaders and other internal communicators to establish a consistent, clear, and sensitive message.

Employers need to understand that the COVID-19 pandemic is a very personal issue as it affects many peoples' personal lives. Therefore, maintaining a consistent message across the organization will help protect brand image along with morale.

To successfully implement changes within your organization, it is critical to quickly and frequently communicate with your employees about the company's change efforts, crisis management policy, business updates and other messages.

Here are some considerations from an internal communications plan perspective:

  • Create urgent message alerts within your employee communication platform to ensure that the important updates reach all of your employees.
  • Update your employees' personal contact details and emergency contact information.
  • Provide tips, guidelines, and best practices related to your company's own plans and policies.
  • Make sure your employees can find important information in one place in a matter of seconds.
  • Make communication mobile-friendly. This is especially important to your non-wired employees.
  • Connect all your internal communication channels into a single communication channel.
  • Measure the impact of your internal communication efforts by measuring how your employees engage with the delivered messages.

9. Active employee listening

The new Human Capital Management requires active employee listening and acting upon employee's concerns and questions.

Now is the worst time to shut your employees out. It is the time to communicate, be clear about your plans, strategy, and help employees understand why some hard decisions had to be made.

For senior leaders, this means a renewed commitment to actively listening especially now because we are switching to the online working environments. Just because people have access to video conferencing tools doesn't mean everyone's voices are being equally heard.

Again, creating a collaborative, open and inclusive virtual work environment requires everyone, leaders, in particular, to first listen to their colleagues.

10. Prioritizing the safety and well-being of employees

Employee well-being is one of the main Human Capital Management concerns these days. Understanding the impact of this pandemic on employees and anticipating possible emotional responses can help leaders prepare for the crisis.

Leaders and managers need to be approachable, open to communicate and they need to offer support to their people.

Some employers are even offering in-person and online resources available to help employees with anxiety and stress, financial concerns, and other issues that they may have due to the pandemic.

11. Planning for and maintaining business continuity

As employees are the most important company stakeholders, they play a crucial role in maintaining business continuity during these hard times. Therefore, business continuity planning now becomes the HCM's #1 concern.

In the current situation, it is vital to react as fast as possible in order to mitigate impacts and other risks and to prepare the organization for the further development of the COVID-19 pandemic and its possible scenarios.

Business continuity planning and management cover infrastructure, cyber, employee, business, operational and communication risks, with the aim of managing an organization that has to face new challenges and risks and wants to ensure continuity of operations and production.

Remember, you need to plan for recovery now, not later!

Why HCM is More Important than Ever

As seen in this article, the role of Human Capital Management in this current situation is significant. Remote work, weekly changes by local authorities, crisis management and business continuity planning are completely reshaping the way HCM functions work.

As employees are affected the most by this change, employers need to understand the importance of supporting them and, before anything else, communicating to employees in a frequent, clear, honest and transparent way.

Leaders need to understand how to foster online working environments in order to help their employees be successful. Leaders and internal communicators need to work hard to build trust in the workplace because that is what people need now.

That means that you need to ensure that your whole organization is on the same page, that they read your updates, follow the regulations, stay connected, safe and productive to ensure business continuity in the best possible way.

The Future of Human Capital Management

It's not a secret that, when this situation passes, the economy will take some time to recover. Yes, some businesses will have to close their doors, some will have to make significant changes in order not to close their doors, and some will even benefit from this situation.

The most important thing is to act now in order to minimize the damage. In any case, there will be significant changes in how organizations manage their human capital.

Here is what could happen:

  • Employers may rethink their current working environment set-up. In other words, some may continue to support remote work more than they used to.
  • To support online working environments, employers will start digitizing their Human Capital Management efforts by implementing various solutions for employee collaboration, communication, productivity, feedback, talent acquisition, and others.
  • Most employers will be updating their crisis management strategies to be better prepared for crises like the current pandemic.
  • Business continuity planning will become the priority for HCM and other departments that will have to work collaboratively to get out of the crisis.
  • For many employers, talent acquisition may become the least important HCM subfunction for a while. Some will even have to freeze their current hiring initiatives.
  • Employers will better understand the importance of internal communications in order to keep their work aligned with the overall business strategy.
  • Good communication skills will become the most in-demand skills among managers and leaders.
  • Some employers will use the financial and other support from local and national authorities to help their people as much as possible.
  • Employee well-being and morale will continue to be an important topic among employers.
  • Employers will, hopefully, keep emphasizing the importance of teamwork and collaboration that create healthier working environments.