Boards need to work with senior management to ensure their organizations are adapting both their workplaces and their HR processes.
This excerpted with permission from 2021 Governance Outlook: Projections on Emerging Board Matters from NACD.
At the beginning of 2020, organizations faced a significant talent problem. Low unemployment, high turnover, outdated or inefficient human resources technology and systems, and insufficient employee-benefits systems combined to make it hard for organizations to find the best talent. The rapid shutdown of local economies due to the COVID-19 pandemic temporarily overshadowed these issues.
The pandemic has revealed the stark differences in organizations’ ability to adapt their workforces. Some made the transition to remote work almost seamlessly because they already had the right systems in place: Their employees worked on laptops versus desktops. They were using, if only infrequently, meeting software such as Skype, Zoom, or WebEx. Their key programs and files were accessible in the cloud—not just in on-site servers.
In addition, these organizations likely offered flexible work schedules and were able to encourage a healthy work/life balance among their employees. Some organizations already had key parts of their workforce organized in teams, or used job shares, so that there were some skill redundancies already in place. Companies not prepared to shift to a remote work environment faced two immediate barriers: the cost to put the infrastructure in place to go remote and the implementation time to get personnel working efficiently and safely in a remote environment.
HR professionals and recruiters recognize that the successes shown by flexible work hours and remote workforces have increased the pressures on organizations to retain key talent. Employees have shown during the pandemic that they can stay on task and drive projects forward, even when working from home, with teams spread out in different parts of a region or country, and with flexible hours.
Employees in many industries now have more leverage than they had before. Employees generally do not leave a job because of money; they usually leave because of problems with the culture of an organization or the relationships they had with their manager and their coworkers. Over the last several months, even organizations with strong cultures have had to work hard to replicate their cultures in a virtual space. The laptop became the break room, the place where people from all different disciplines and levels within the organization could meet virtually.
Boards should understand management’s assessment of workforce retention challenges and evaluate any necessary shifts in retention strategies.
While boards of directors are not too often involved in the operations of an organization, they should pay attention to how workforce shifts will impact the future of the company. Boards need to be aware that with a shift to working from home in many sectors of the economy, recruiters now have the opportunity to reach a broader spectrum of people and regions of the country to find the right talent. In addition, there is a nationwide call for organizations to find a more diverse workforce. And a more geographically dispersed workforce may also lead to lower compensation costs, if compensation is not based on an office located in a metropolitan area.
The challenge for boards is to recognize that the talent landscape has changed for both retention and recruitment. Boards need to work closely with the organization’s leaders to ensure that they are adapting both their workplaces and their talent management processes to keep the current staff productive and to fill important skills gaps that will support growth.
NACD elevates board performance by providing board members with practical insights through world-class education, leading-edge research and an ever-growing network of directors.
Apply It in Your Boardroom
- Does the organization have the right talent-management system in place, including up-to-date talent profiles, to support any changes to the workforce that may be necessary to handle a COVID-19-type situation in the future?
- What did we learn from the pandemic slowdown in terms of hiring practices and flexible work arrangements that should be permanently incorporated into the HR strategy?
© 2021 by the National Association of Corporate Directors. All Rights Reserved. Materials are courtesy of NACD and should not be redistributed.