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Our Insights 23 Apr 2020

In Focus: Worker Well-being

By Bron York

As COVID-19 continues its march, we are closely watching its impacts on the sustainable development agenda.

Positive signs of continued momentum include investors demonstrating consistent ESG interest during the pandemic, and the launch of new climate commitments by companies like Shell and Microsoft even as the economy stumbles.

Beyond ESG, climate and other signature sustainability issues, the crisis has particularly elevated issues ranging from physical safety to mental and emotional health related to worker well-being. While we regret the driver behind this, we are glad to see the human emphasis. A large number of companies — and other employers, like the UK’s National Health Service — have made meaningful sacrifices and changes in order to emphasize the economic, physical and mental well-being of their employees. There is also growing evidence that companies that already had robust benefits pre-crisis, such as paid sick leave and parental leave, have been able to be more resilient and nimble during the pandemic.

Healthy Workforce, Stronger Organization

COVID-19 has been wreaking havoc of all kinds on businesses: disrupting supply chains, shuttering retail, and slashing sales as consumer confidence plummets and behaviors radically change. But some of the biggest challenges have been employee-related, from restricted travel and re-designing essential workplaces to keep workers safe, to differently supporting whole workforces that shifted to working from home virtually overnight.

In the initial wave of the virus, ad hoc reactions of national and state governments in different regions left global companies to make many decisions on their own.  While responses haven’t been perfect, many companies have made extra effort to put employee health and safety first.

There is also growing evidence that companies that already had robust benefits pre-crisis, such as paid sick leave and parental leave, have been able to be more resilient and nimble during the pandemic.

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In the US, retailers including Macy’s, Nike and Apple closed all of their brick and mortar stores nationwide in mid-March to  protect employees and customers and help halt the spread of COVID-19. This happened at a time when federal government leaders were still downplaying the likely impacts of the virus and comparing it to the common flu. Among fifty states, only California had announced a shelter-in-place edict when these companies took action themselves.

In the hospitality industry, a particularly devastated sector, Hilton took measures to minimize job loss for its employee base, including adopting job rotations, flexible hours and shorter work weeks. To further assist furloughed workers, the hotel brand is also collaborating with companies like Walgreens and Albertsons to connect its employees with short-term job opportunities at those companies. Other industries responded too — the CEO of Marsh & McLennan told his 76,000 employees their jobs were secure and created an employee financial grant program. Online health service provider, Workit Health, has ensured its employees “…have access to safe housing, transportation or any other means they may need for working from home [safely].”

Overcoming Isolation and Uncertainty

Physical isolation, economic strain, fear and uncertainty are taking a toll on employees’ mental health. A March poll from Pew Research Center found that 73% of Americans have felt more anxious since the pandemic began, while a global study by Qualtrics of >2,000 employees from Australia, France, Germany, New Zealand, Singapore, the UK and the US suggests that the uncertainty of the crisis, working from home, furloughs and layoffs are leading causes in declining mental health. The study states that more than 60% of workers surveyed (spanning a wide range of sectors and industries) have been experiencing increased levels of stress and anxiety since the pandemic began.

A small group of leading companies seem particularly aware of the potential impacts COVID-19 may have on employee mental health and have taken immediate action. Employees who know their job is secure have less uncertainty and more confidence to continue performing in their roles. Stewart Butterfield, Slack’s CEO, told his employees, “We got this. Take care of yourselves, take care of your families, be a good partner. It is fine to work irregular or reduced hours. It is fine to take time out when you need it…” Currently, 100% of Slack’s more than 2,000 employees in 18 offices around the world are working from home. Beyond the green light for flexible working hours, employees were also given a $500 stipend to make their new home work-stations ergonomic and comfortable.

Amazon is in a unique place. Its business model has been affirmed by the spike in demand for home delivery created by the virus and social distancing, but it has been sharply criticized for the way it has treated workers during this trying time. It is responding, too. The company is now making a number of policy changes, including allowing employees to take unlimited time off without pay and to receive up to two weeks of paid leave if they test positive for COVID-19. The company also raised pay by $2 per hour and doubled overtime pay for associates including warehouse and delivery workers, and it committed to giving part-time workers paid time off. At Amazon, as well as across the gig economy, there is new perspective on who is an essential worker and deserving of more benefits and care. It’s likely such perceptions will persist when the crisis wanes, and that pay increases and other changes being made to the employment contract now will not all be reversed, which has the potential to raise both the floor and the ceiling for worker rights and compensation.

Lasting Benefits

Just as the pandemic has accelerated remote working, it has forced employers to reassess their approach to employee physical and mental well-being. Companies that demonstrate commitment to the well-being of their workers at this time are more likely to be rewarded with increased employee loyalty, reduced levels of stress and higher levels of productivity, while companies slow to address sick leave, paid family leave and mental health programs are now realizing the cost of failing to prioritize workforce well-being is less resilience and a weaker market position.

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