Rewriting the Social Contract
The HR Team, a human resources outsourcing firm based in Maryland, organized a spa day for its 2019 holiday party.
The company provided facials, massages and lunch for the staff at its headquarters in Columbia, about 20 miles southwest of Baltimore. That was about three months before the pandemic hit. This year, the company sent do-it-yourself spa kits.
Altering holiday events was merely a blip among the litany of challenges employers have dealt with over the past 18 months as they learned to live and work amid the specter of COVID-19. Now, as coronavirus cases drop nationwide and governors have loosened mask mandates and social distancing requirements, many employers will have to figure out how to return to workplaces that may just loosely resemble life as it used to be.
During the pandemic, the workplace social contract—fair wages and healthcare benefits make for a loyal workforce—was flipped on its head.
Even employers that functioned somewhat regularly over the past year dealt with mask mandates, social distancing, sickness and death.
Employers need to figure out how to return to post-pandemic workplaces that barely resemble their pre-pandemic selves.
“Employers have to recognize that there is no one size fits all and no software program that’s going to tell you what to do,” says Eileen Levitt, CEO at The HR Team. “And I would be shocked if we got guidance from the CDC … and, if we did, if employers would even be able to follow it.”
This is the case with something as basic as mask wearing. The Centers for Disease Control and Prevention (CDC) announced in May that people who are fully vaccinated no longer need to wear masks in public places. But a study conducted in April and May by Mercer, a large benefits consulting firm, found that 93% of employers were still requiring their staffs to wear masks in common areas.
Few employers have not been touched in some way by COVID-19. Even those that were functioning somewhat regularly over the past year dealt with mask mandates, social distancing, increased cleaning requirements, reduced staffing and, far too often, sickness and death. Now, as many organizations begin calling people back to the workplace, employers will grapple with issues like employee vaccination status; in-person, distance and hybrid scheduling; and the new expectations of a workforce that has retooled its routines.
The Social Contract
The pandemic made clear what many Americans already knew: there is a vast divide between people who have and those who don’t. The workplace social contract—that employees will be a loyal workforce in exchange for wages and health insurance—was flipped on its head.
Organizations with large numbers of “essential” employees took a hit for forcing people to work and risk their health. Some companies broke the social contract by firing large numbers of employees.
But other organizations opted to pay benefits and wages even when employees were no longer working. Some expanded leave or began offering paid time off. Companies helped with childcare expenses and gave out gas and grocery cards for employees in need.
“Employers took unambiguous and aggressive stances in terms of dedicating themselves to the fact that the health and wellness of their employees was their main concern,” says Joseph Fuller, professor of management practice at Harvard Business School. “You get no take-backs on that now and say, ‘We only meant that during the pandemic.’ And that will shape the return to work.”
Mathieu Despard, a faculty director with the Social Policy Institute at Washington University in St. Louis, says he and colleagues recently wrapped up a study of hotel workers in New Orleans, who together took a particularly hard hit as the country halted travel and large numbers lost jobs or were furloughed over the past year. Their employers worked with financial services companies and philanthropic groups to organize an emergency assistance program.
While Despard saw a number of similar examples, particularly in industries where the cutbacks were almost impossible to ignore, he says, this wasn’t true of a majority of employers. Despard and colleagues surveyed U.S. households several times during the pandemic and asked if their employers were doing anything differently, such as increasing paid sick leave. The numbers were low.
Despard says well under 10% of the people he surveyed said their employers had made a change to their benefits, like adding paid sick leave, student loan reimbursement or financial counseling.
Levitt says the year was as much about separating the wheat from the chaff: being tested showed who was and was not a good employer.
“If you don’t care about your employees, you can’t fake it,” she says. “Maybe in the past they could, but they can’t fake it now.”
According to arecent study from Businessolver, an employee benefits technology administrator, there likely is a divide between what the C-suite thinks they are doing for employees and what employees feel they are receiving. In the 2021 “State of Workplace Empathy” report, 96% of CEOs say their organizations were empathetic. But only 72% of employees say the same about their companies.
“There is a disconnect between CEOs and what they like and value being in the office environment and maybe what the day-to-day workforce wants,” says Jon Shanahan, Businessolver’s president and CEO.
The study also found that Gen Z and millennials were less happy with the empathy shown at their organizations than baby boomers and Gen Xers. This statistic should concern employers, Shanahan says, because these younger groups will make up a majority of the workforce in just a few years.
“As we edge closer to that, companies will be experiencing a shift in what employees value,” he says. “There is a big shift from Gen Xers to boomers.”
Preparing for Varied Perspectives
As people return to work, both C-level and human resources staff should be trained to show and create policies that are empathetic. Offices will have a mixture of vaccinated and unvaccinated workers. Some staff will want to continue to wear masks and social distance. Others won’t.
Some states, including California, have required employers to determine the vaccination status of all employees before allowing them back in the office. Meanwhile, in Utah, parents protested when their children were required to wear masks in school. The back-to-the-office atmosphere, then, will be rife with potential conflict.
“Each employee is going to have their own perspective, and there will be complaints on both sides,” says Jared Hansen, population health manager at Moreton & Company, a Salt Lake City-based insurance brokerage. “Once we get past the mask mandate, people will be saying, ‘So and so came in with a runny nose,’ and that person could say, ‘I’m being discriminated against because I have allergies.’”
Hansen recommends adapting policies and preparing to face pushback from both sides. When creating work-from-home policies or safety standards, employers should try to find a middle ground on everything from elevator protocols to kitchen use and, of course, social distancing.
The pandemic has forced many employers to rethink their benefits packages. Furloughed employees were probably much more concerned with good health benefits or money for savings than having a ping-pong table in the break room. Experts recommend employers look through their benefit packages and refocus on the basics to help employees as they return to work.
“First focus on base wages and then focus on benefits,” Levitt says. “People who have had to go into the office during the pandemic are usually making the least money and can least afford the increased costs we are all facing,” she says. “If an employer is not paying a living wage, what difference does it make if you give them a gas card?”
Despard says even within industries it might be wise to look at changing benefits by occupation. For instance, at a car manufacturer, the engineers and sales and marketing staff have likely been able to work from home. Meanwhile, assembly-line workers might be paying for daycare, parking and transportation. New benefits could take those additional costs into account for specific groups.
Health insurance is another space employers might want to reconsider as the pandemic winds down. According to Despard, research has shown that, when employees’ out-of-pocket costs are high and their employer doesn’t pay into a health savings account, people put off getting needed care. With healthcare facilities closed this past year, there will be a large backlog of care that needs to be performed for many employees. That should be considered when offering health plans.
Another (unsurprising) lesson gleaned from pandemic-era research is that people who previously had savings were better able to cope if they lost their jobs than those without money in the bank. Employers are generally good about helping employees with long-term savings and retirement, but Despard recommends also promoting short-term savings to help weather storms like the pandemic. “Employers can offer to auto deduct money to put into a savings account and could provide incentives for depositing in savings,” he says.
Families who were strapped financially may be interested in benefits like assistance repaying student loans or rent and access to financial counseling.
“You need to think fundamentally about what a dollar spent on a benefit does to improve employees’ financial stability,” Despard says.
Improving benefits can be an additional expense when times are tight, but there are also some creative solutions that don’t require a large financial outlay. Ellen Frank-Miller, founder and chief scientific officer of the Work Research Center, says low-cost solutions may be particularly effective for front-line workers, for whom, research shows, improving working practices has a positive effect.
Frank-Miller worked with two childcare centers in low-income communities where pay was low and turnover high. Wage increases weren’t an option to boost employee retention. Frank-Miller determined that most of the turnover was in the first 60 days, when new employees were placed directly into classrooms without training. The centers revamped their practices, pairing new hires with onboarding mentors who offered resources to help with the adjustment into a classroom.
A long-term care facility Frank-Miller worked with instituted thrice-weekly meetings so employees could voice concerns and keep lines of communication open, even during the pandemic, when time was scarce.
“Evidence demonstrates that perceived organizational support—when employees believe a company has their back—creates a reduction in turnover and burnout and improves performance,” Frank-Miller says. “Interventions don’t have to be dramatic or expensive. They have to be thoughtful and include employees’ voices.”
Some other benefits that were popular during the pandemic included programs that helped Gen Xers find the proper care for their aging parents. The nation’s lack of sufficient childcare resources also came to the fore. Some employers turned to options like childcare subsidies, subscriptions to sites like Care.com, and paying for tutoring for children going to school virtually. The latter may continue to be helpful as children come back from their “lost” pandemic school year.
Fuller says this is the time for brokers to be talking to both clients and vendors. Brokers can work with human resources staff to determine what types of products their workforce will need and what kinds of things they could experiment with. Brokers can then look to vendors to find or create solutions to those needs.
For instance, large employers may decide to open a daycare center on site if it would get high use after the pandemic. Smaller companies might find it more practical to work together to build a daycare for a number of offices or start an afterschool program for employees’ children. “Disruption often leads to interesting changes,” Fuller says, “and this pandemic might lead to some of them as well.”
Focus on Mental Health
It became clear early in the pandemic that COVID-19 was taking a toll on people’s mental health. Isolation, loss of work, physical health scares, and the uncertainty of when things would return to normal were overwhelming even for people with no history of mental illness.
According to a survey by the Kaiser Family Foundation, about four of every 10 American adults have reported symptoms of anxiety or depression during the pandemic, a fourfold increase from 2019. Specifically, people have had difficulty sleeping, loss of appetite, increased use of alcohol, and deteriorating chronic health conditions.
Leia Spoor, a senior clinical consultant with Holmes Murphy, says the most-asked question from clients looking for advice on returning to work is this: “What do we do around mental health?”
Employee assistance programs (EAPs) are one way to address mental health issues in the workplace. There are effective, inexpensive programs that companies can add. Many companies already have them, but they aren’t well used. This can be remedied by getting the word out better and actively directing employees who need them to the assistance programs.
Ben Isgur, leader of PwC’sHealth Research Institute, says he has seen employers ramp up the mental health services on their benefit plans and reduce cost sharing. Isgur also notes that stressors from the pandemic are not affecting everyone equally. Many employers might be surprised to find that 18- to 24-year-olds have reported experiencing more stress, depression and anxiety than older people during the pandemic. One of PwC’s surveys also found that younger individuals were more interested in nontraditional services, including video health visits, and were three times more likely than older workers to use an emotional support app.
Spoor says employers are taking a range of approaches to mental health concerns. Some companies are ensuring their EAPs have plentiful offerings. Some have launched full-blown initiatives that include leadership training on how to recognize and address mental health issues in the workplace. Some are teaching employees how to break the stigma of mental illness and incorporate the topic into leadership and staff meetings. She has also seen employers create communities in which staff members lead discussions on specific mental health topics.
One benefit of the pandemic may have been that even the most avid of workaholics had to take time off. People were forced into spending time alone or with families, and many created new habits. They started baking bread, learning new languages or playing instruments. Some took their kids to school or were suddenly able to attend kids’ sports activities. And many will be unwilling to give that up completely as they return to the office.
“People are saying they want to make sure they are continuing to spend their time doing something meaningful or they are thinking about what they do for work and making sure it means something to them,” says Julia Lamm, workforce strategy leader for PwC.
PwC surveys have shown an increasing number of people saying they would give up a portion of their salary to get more paid time off to do things like volunteer. Others said they would give up 10% of their pay for unlimited vacation days.
Where benefits and paid time off used to be lumped into different categories, the workforce is increasingly seeing it as a necessary part of their benefits package. Shanahan says he has seen people leave their jobs and go to other organizations that offer more flexible schedules. “Companies that embrace that will get the best talent,” he says. “It’s the easiest extension of benefits they have to offer.”
Employers should recognize that the nation’s white-collar workforce had a major upheaval going from working in offices to their homes. They learned to juggle work while caring for children and pets, all while taking on new technology challenges. They created new patterns and habits and cycles for managing their days. What companies may not be anticipating as much is the turmoil that will be created when they are asked to form new patterns, yet again, going back into the office.
“If employers have the latitude and flexibility to do it, the best thing to do is extend trust and flexibility to figure this out and let employees know you will stay in tune with what works for them and you are not going to impose a situation that will make them quickly adapt again,” Shanahan says.
White-collar workers, Fuller says, will increasingly be asking for more paid time off as long as they can still get their jobs done. Companies that comply could end up saving money in the long run. When someone has unlimited paid time off, a business doesn’t have to spend money tracking time or creating policies for different employees based on things like years of service or job title.
“When companies do that, something interesting happens,” Fuller says. “People take 12 Fridays off in a row because they are going to their lake house. Or they leave every day after 3 p.m. from May to September because their kids play baseball, and they want to see their games. There is a lot of self-customization that happens, and that is going to be just fine.”
Hansen says employers will be required to have long discussions about what each company needs and what their employees want. The current landscape will require companies to think about their flexibility or watch their employees move on to other companies the employees believe will take better care of them.
“I’ve seen people leave when they have to negotiate or fight for one more day of PTO,” Hansen says, “and another company says, ‘Let’s not make this a big deal; just take it when you need it. Do your job no matter where you are, and if you need to pick your kids up from school—as long as can still do your job, that’s all we care about.’ That sends a strong message from a company.”
Coming Back…Or Not
When offices across the country began shutting down to prevent the spread of COVID-19, businesses adapted quickly. Amy Steadman, chief people officer at The ABD Team, says it took three days to get everyone home and working at 90% capacity and just a few more to get to 100%.
And many people have adjusted very well to being home most of the time. “Companies have been surprised about the lack of interest workers have about coming back under historical ways,” Fuller says. “A couple of companies I know have beautiful campuses and a great sense of community, but a very large number of workers are saying, ‘Well, I can come back for certain things, but I’m used to eating breakfast with my kids, and my dog will get lonely if I’m not home.’”
For employees who do not miss long commutes and do enjoy going to Little League games, working from home may be the most important benefit employers can offer over the next few months. “As soon as that cat’s out of the bag,” Steadman says, “you can never say, ‘This job needs to be performed at the office. You can’t really tell people their job requires it when so many were able to do all of what they needed to do from home.”
The recent Mercer Study found that 18% of employers are expecting staff to return to work with no phase-in scheduling; 48% will do so with a phase-in; and only about one third of companies plan to allow employees to choose whether they want to work in the office or virtually on an indefinite basis.
Though many of the employees, human resource professionals and CEOs surveyed in the Businessolver study thought companies should respect the need for time off, flexible scheduling and the option to work from home, less than half of the organizations surveyed are actually doing these things.
Not only does flexible time and working from home show workers that their company cares about them, but it may be a crucial competitive advantage for companies. Lamm says a large voluntary turnover is anticipated in the next six to 12 months. And she has already seen turnover increasing by 5% to 10% among employers who do not want to offer at least a hybrid work model.
Even employers flexible enough to offer work-from-home options may face challenges. It can be difficult to manage people and track their contributions when they are out of the office. Or some employees may go into the office to brainstorm only to find none of their colleagues are there. Or meetings may pop up with half the staff in the office and the rest working virtually.
“I think we are going to be moving around like a stranger in a dark house,” Fuller says, “trying not to stub our toes and kick the furniture for a while.”
Flexibility will be a major component of new schedules and different benefit offerings. And for now, at least, it might be best to write out any major workplace policy plans in pencil instead of pen.
Spoor recommends letting employees know a company is doing its best to accommodate everyone and that no one knows how the cards will fall. Instead of committing fully to a particular schedule, present a 90-day plan instead. After 90 days, evaluate the plan and proceed from there.
“There is going to be a rough transitional period that will be just as clunky as things were at the beginning of the pandemic,” she says. “Coming back will be another change and require some sort of balance and figuring out how to make it work.”
The same goes for benefit packages. Benefits may be viewed very differently by employees than they were before the pandemic. “Acknowledge that,” Despard says. “Tell people, ‘We’ve been through a lot, things have changed, and we need to understand what is and is not working for you in terms of what we offer.”
Getting different opinions—and a lot of them—is likely going to be one part of the new norm. But that shouldn’t scare companies away from making changes.
“People will always collectively feel things could be better,” Despard says. “Employers need to be able to step into that space bravely to see how they can be more flexible and creative.”