Navigating through the lockdown

Rowena Morris (RM): Welcome to the latest episode in the COVID-19 Business in Focus podcast, where we explore the business impacts of coronavirus. I’m Rowena Morris, a director at PwC, and I’m your host for this series.

The lockdown has transformed the working lives of people across the UK. But on Sunday, 10th of May, the Prime Minister announced these measures are gradually being lifted. Over the coming weeks, many businesses will be preparing to support their employees as they return to the workplace if it’s appropriate for them to do so. In this episode, we’ll explore the challenges businesses have been facing as they adjust to new ways of working, and as the country gradually comes out of lockdown, we’ll take a look at how business can address some of the issues that might arise.

I’m delighted to be joined today by Chris Box and Nicola Shield. Chris is our EMEA HR Consulting Lead here at PwC, and Nicola is our lead for Governance, Risk, Compliance and Control. Chris, Nicola, welcome to our virtual studio.

Chris Box (CB): Hi Rowena.

Nicola Shield (NS): Hi Rowena, thanks for having us.

RM: Thanks for joining us. So first of all, Nicola, to kick things off, if we reflect on the past few months, what challenges have businesses been facing as a result of the lockdown measures?

NS: Thanks Rowena. So, at first the challenges were very much around reacting quickly to the crisis and that involved responding to a number of issues. These are broadly, obviously the cash and cost management, it was about assessing and managing supply chains, and their suppliers, setting up new working environments – obviously we’ve all seen the number of people working from home, dealing with the changes in requirements from the government and new rules being implemented, and then also dealing with changes in customer needs and operations, so lots of different areas.

CB: I think it’s fair to say we then moved into a stage two, which didn’t necessarily run concurrently for organisations, but once we got through that initial firefighting that Nicola’s just talked about, I think the key challenges that employers were really facing were around workforce wellbeing and making sure that they were connecting effectively with their employees.

Trying to get a grip on productivity, we know the risks of trying to manage a workforce in a remote manner can be challenging from a productivity perspective – understanding really within the context of a changing business demands, what are the skills that organisations really need to be able to build their requirements in the marketplace. Then there’s the very practical considerations around maintaining and ensuring that HR operations are still effective to support employee groups, as well as the continued focus on costs and changes that Nicola’s already touched on.

RM: So a wide range of challenges and a number of competing priorities to tackle there, that you’ve outlined. Nicola, how have you seen business and leaders particularly respond to these issues?

NS: Actually, a large part of it has actually been around modelling to try and work out for each business what it means, because each business has got its own challenges. Overall though, about 81 percent of businesses expected a decrease in revenues or profits, so obviously a massive impact. That means that they then were looking at deferring or cancelling potential investments that they were going to do, and obviously a number of businesses have been forced to lay off or furlough employees.

All of them are dealing with some really significant changes, including some quite technical ones like switching production to new products, which is quite a technical, detailed one to do. Others are actually trying to look for new opportunities and new channels – a good one is the wholesale food suppliers going direct to customers, so they couldn’t go to restaurants (restaurants are closed) so now they’re selling directly to customers. We’ve also seen new changes to operations already being implemented to help with things like the social distancing measures, and I’m sure we’ll have all seen some of those in supermarkets.

CB: Yeah, I think alongside that I’d maybe add a couple of points. I think we’ve seen this sort of settling-in to new ways of working, working remotely. We did a short survey in early April, and 80 percent of organisations were saying that they were confident that their IT infrastructure was holding up pretty well to facilitate remote working. I was surprised it was that high, but it seems that for many organisations, IT capabilities have stood up pretty well.

I think though, the second thing that organisations are really starting to grapple with, and I’ve touched on this already, which is actually how do you maintain productivity, especially the longer this goes on – how do we ensure that employees remain focused, engaged, and their wellbeing is protected in an environment where they’re potentially working from home for a prolonged period of time? Having said that, obviously off the back of the announcement from the Prime Minister on Sunday, we know that most employers have been for some time preparing for employees to prepare to return to work. And we know there’s a number of practical issues to work through in that regard – obvious ones around ensuring that there is effective social distancing labelling in the office environment wherever possible, but also there’s more practical issues around getting employees to really have the confidence to return to the workplace. There does feel a little bit at the moment as if there’s some divergence between government policy and the overall sentiment from the employees and the population as a whole, and we obviously need to work with major employers to try and close that gap and give employees the confidence to return to the workplace, in a safe way of course.

RM: So it’s really helpful to think about it in those areas that you outlined, so one, recognising the need to manage costs, two, settling into the new ways of working, and then three, preparing for the return to work. So following the Prime Minister’s briefing on Sunday, we’ll be seeing organisations move towards that third area – navigating the release from lockdown. Nicola, what challenges will organisations face as they prepare their return to the workplace?

NS: So what’s really clear is that the release needs to be managed really slowly, and the government’s going to manage it in a really slow way to minimise the risk of a second peak. So that means that businesses need to plan carefully around that to manage it. This isn’t going to be a short-term backing into normal business, it is going to be a longer, slower release, so businesses are going to have to think about how can they best generate revenue over the next few months, and what is a cost-effective way of generating revenue. They’ve got to think about have they got the right channels to market, to meet the changes in consumer demand. As well as really assessing then how they’re going to sequence and pace the ramp up to maximise productivity. What we’ve also seen is some of the real challenges to the supply chains, so there needs to be a review of the supply chain, and making sure their suppliers are ready and able to deliver and that distribution channels are returning to work as well.

One of the balances is really around bringing people back to work. Many of them have been furloughed and therefore you need to consider when you’re going to bring those people back and what makes sense, as I mentioned in that sequencing and the ramp up. Lots of the questions though, need to be around the health and safety of employees and also customers, so businesses need to do a written risk assessment of working conditions for their staff – certainly businesses with more than five employees, and for those that have more than 50 employees, they need to be published on their website, so that’s going to be a really important area, to make sure those risk assessments are comprehensive and detailed, and also then that actually they are very clear on what controls or mitigants they can put in place or implement, and how they’re going to monitor those on an ongoing basis.

The other area is really focusing on confidence, so making sure their workers are comfortable in returning to the workplace, particularly those that use public transport, and seeing if those employees have another alternative.

The other thing that the government announced was very much looking at local considerations, and we’ve seen that businesses really need to consider the unique considerations for each country they may be in, each city, each location and even sites in that location. All buildings have slightly different variations, and therefore they need to be taken into account because you may need to adjust what businesses are doing in a different way.

For example, we’ve seen the size of lifts could make a really big difference with how many people can get onto different floors, and at different times, and therefore making sure that you assess some of those really challenging areas properly, and business is putting in place the relevant tape on the floor et cetera to make sure that things are properly implemented. But ultimately, a lot of it comes back to really detailed planning and modelling around this.

RM: Yeah, so that point around unique considerations is really important there, especially if there become, as you say, different rules and considerations for different locations. Chris, moving on to some practical advice now, do you have some advice for businesses that are starting to plan their way out of lockdown?

CB: Yeah, so I think three or four key points to pick up on. I think the first is the clarity of advice being given by employers. I think we’ve seen the clamour from the greater public to have clarity from the government in a very complex situation, we know in many aspects, it’s impossible to give absolutely clear advice, however, I think employers need to do all they can to strive for that clarity, because that will also support the confidence point that Nicola’s already touched on.

I think secondly, I think it’s also really important to ensure that the underlying infrastructure in terms of employee HR policies and procedures are clear, and support things like social distancing, so for example, assessing and reviewing (and changing if required) things like working hours and creating clarity on that for employees will undoubtedly help from a confidence perspective, but will also from the practical perspective of ensuring a greater ability to meet social distancing requirements.

I think another consideration is to ensure from an organisational perspective as the changing needs of customers are realised through an organisation, what skills do you have within the organisation to meet those changing customer demands, are there any excess levels of capability, and what do you do about that, but also are there any gaps, as we hopefully turn our attention to the economic recovery, how well-placed are organisations from a skills perspective in order to meet increased demand in any one of a number of areas.

We’ve already touched on the importance of understanding employees’ ability and willingness to return to the workplace – I’m sure that will ebb and flow over time as government advice is clarified and also as we see the progress of the virus itself. Those probably, Rowena, are the key points that it’s worth thinking about from a practical perspective at the moment.

RM: OK, thank you, and I think that clarity of message is really important, and even if it’s a case of just talking about ‘here’s what we’re currently thinking about’, even if you haven’t got the full answers, I think it’s important to get right. Nicola, I wonder if you could tell me a bit more about how we can plan for the release of lockdown measures?

NS: Yeah, of course. So a good start obviously is using the scenarios that the government said and outlined on Sunday night, what they think level one will look like, et cetera, and right going through to where they think that actually, hopefully we will be able to have more releases then, and more flexibility in July.

And also then, using some of the lessons from countries that are further ahead. I think everyone needs to have a structured framework, to consider all the areas that are impacted, because it really is across the whole business, and then doing a risk assessment as the government has required, but also considering some of the benefits and opportunities that there might be. So areas that we would expect to see include the customer side – there will be some areas where an organisation or a business could be ready but actually the customer may not want them at this point in time. Then it’s looking at suppliers and operations, as Chris said, the workforce and real estate, and then technology – but obviously, finances and what the impact may be.

For each area, then you can get into a bit more detail, such as for the workforce like Chris said. Another area to get in more detail would be real estate. The government has issued a number of papers which outlines what each organisation in a particular circumstance should consider, and those organisations need to do a health and safety assessment, looking at what the current situation is in their buildings and what they need to do to change to then get ready for the safe arrival of anyone from the workforce. There’s a lot of preparation that needs to be done: you may need extra deep cleaning, reconsider your workplaces, the government talked about removing hot desking. Key areas which can be really challenging are establishing food and drink areas, and new guidance around that, new rules about communal areas, but also the government talked about providing potentially extra parking or bike racks for people that are unable to commute in a different way and not use public transport. So there’ll be lots of issues and new areas that will come up.

The other thing that will be really key is setting up a feedback loop, from the buildings and across the organisation, collecting information and being able to tailor and change things as new issues and things change. And also then being able to adapt if the local COVID alert level changes – as I mentioned they are looking at it locally – then you may actually need to change certain parts of your business or a particular location, so you need to be able to build in a level of flexibility and adaptability dependent on what may happen.

RM: One thing that’s really important that you touched on is having that structured framework, where you need to get a cross-functional team around that and working through that, as you say, and be ready to adapt that. One thing that came out on a previous podcast that we talked about is how we can include the wider workforce in bringing through those new ideas and really playing to the different opportunities that the new normal will present, so I thought that’s another helpful, practical addition to your list. So of course, it’s probably too early to say whether or not business’ strategies have been completely successful, but Nicola, building on those points you’ve talked through, have you seen any organisations start to get this right over the past few weeks?

NS: I mean, there have been great examples where businesses have adapted really quickly, and I think there are a number of opportunities out there under these really difficult circumstances. One that caught my eye was around some local gin distilleries that are actually now making hand sanitiser. Obviously, both those products are alcohol-based, but by switching production and also distribution chains, they’re able to produce more local hand sanitiser and have actually been able to support their local community, particularly by sharing the hand sanitiser with the NHS. Now going forward, that may be a new channel for them to be able to sell to the wider public, so actually will support them certainly in the short to medium term, until things progress and we get out of this crisis. And it reminded me of a quote that somebody said, that actually, it’s not necessarily the strongest of the species that survives, nor the most intelligent, but it is the one that’s most adaptable to change. And I think that’s very apt in today’s world.

CB: I think in addition, we’ve seen lots of great examples of organisations adapting to support the local and broader community, and I think during this period of crisis, I think that many of us are taking comfort from that. Just to look at it from a slightly different perspective, I think many organisations are starting now if they haven’t already to ask the question, what are some of the things that I’ve been trying to change for a long time, and in an appropriate way, does this create an opportunity to make that change? So, for example, with organisations who’ve got significant numbers of customers who have been heavily reliant on things like receiving paper statements in financial services or utilities, how do we ensure that we can maybe take this opportunity to move people to a more effective self-service model, where they’re not demanding or expecting paper statements, and they can use technology to understand their own utility bills or their financial statements, because we know at this point that a lot of the general public are more susceptible and more open to trying to do things in a slightly different way in order to support organisations for the greater, longer term. So I think it’s worth obviously focusing very much on the community aspects of it, but also asking those questions about what are those things that we’ve been trying to do for some significant time, and is now a time to actually try and make those changes in a significant way.

RM: Yeah, definitely the themes around using this as an opportunity to transform but also really putting purpose at the heart of your business decisions has come out a lot through these episodes, so that’s really interesting. Chris, you’ve spoken a lot about how businesses are dealing with what’s happening right now, but looking ahead, how should businesses start to prepare for the challenges that are around the corner?

CB: I think if we could segment that into probably three key areas, and I think we have touched on them already, but just to bring them out in as coherent a way as possible, the three areas where we are supporting organisations in many ways are around properly understanding workforce demands, secondly workforce supply, and then thirdly that overarching issue of productivity, particularly within the context of remote working, so if I look at the demand aspect of it, trying to really understand how the businesses have changed, what a new normal potentially looks like, and how long-term that is going to be, and actually trying then to map out, not just in terms of headcount but also the skills that an organisation possesses, and has access to, to particularly, and I made this point a little bit earlier on, particularly really understand how that then correlates with forecasted economic recovery and future demand, so I think doing that scenario planning is absolutely critical for many many reasons, primarily from an economic perspective, but also from the perspective of creating clarity and a path for employees, which is obviously a critical element of ensuring their greater wellbeing.

That intrinsically links to supply – we need to understand the short-term, the extent to which the supply side of workforce is inhibited, not just from the direct impact of the virus itself and people being out of the workplace for a period of time, but also, as many employees juggle extended commitments, whether it’s childcare for as long as the schools are shut, or potentially elderly care if the older community are in lockdown for an extended period of time, so trying to really understand what available talent an organisation has in the medium term.

And if I then turn that to a more positive conversation, I think one of the things that this is going to show to many many employers if they can engage with a broader workforce who are accessible not just within the immediate vicinity of what is deemed to be commutable, I know that the government talked a lot before COVID-19 about levelling up, and I think in many ways as we come out of this crisis we will see more narrative and conversation about levelling up, and I think this has actually opened many peoples’ eyes to the effectiveness of a more agile, flexible and remote-based workforce.

Having said all of that, I think that there is evidence in the short-term at least that productivity has been affected and we’re not surprised by that, but one of the things we need to work hard on, and organisations need to work hard on, is ensuring that technology stands up (and we’ve touched on that already), but there are also effective mechanisms in place to ensure that employees can work in an effective way, and that could be a number of things – technology, we’ve touched on that, but also maybe there’ll be some sort of revised model where there’s hubs of locations where employees can gather to work, in a way which means that they don’t necessarily have to go to their traditional workplace where they are often reliant on things like public transport, which we know can be a significant challenge in the short and potentially medium term. So hopefully a few things there for organisations to think about.

RM: I think there’s also a point around leading teams in a virtual world, and I know that’s one of the podcasts we’re looking to book in soon, so more on that to follow. Nicola, around the world, some countries are starting to ease lockdown restrictions. So are there lessons to be learned from those businesses that have supported their workforces in starting to get back to work?

NS: Yes, well based on what we’ve seen and discussing it with a number of our colleagues from around the world, one of the key areas is confidence. So making sure that businesses give confidence to customers and employees that they’re going to be safe both travelling to and in their stores or offices, that’s going to be really key, and I think that as Chris mentioned, making sure that there’s a clear path, clear scenario planning in place so that both customers and employees have that level of confidence, and we’ve seen really strict rules and procedures implemented, ranging from as everyone will have seen I’m sure from Sunday night with the Prime Minister, some of the guidance around tape on the floor, restricting the number of people in confined spaces like lifts, and making sure that hand sanitisers are available, those types of things. And a number of those items are included in the checklist that the government has shared, the additional guidance.

In some of the Asian countries, they’ve gone beyond some of those areas, and actually in some businesses they’ve gone beyond the minimum levels as it were, so actually doing temperature checks for staff and employees, and some of the UK businesses have been discussing those too – they’re not actually a requirement but actually it may help with confidence levels.

I think demonstrating compliance with the new guidance for employees will be really important, so as you look to build confidence, making sure that risk assessments have been done really thoroughly, obviously the government have announced that actually for those that have more than 50 employees they should be posted on the website, so making sure the risk assessment’s really clear, comprehensive and has actually been implemented, and then also making sure from an ongoing perspective that actually what has been implemented is effective and actually works in practice, and there will probably need to be a feedback loop actually to work out what some of the changes might need to be – for example, if there’s a bottleneck round the lifts.

So actually, I think there’ll be a lot around confidence, and making sure that people feel confident that these things work and we won’t then end up going towards a second peak, and that links into my next point, which is about going slow, and having really clear risk-based decision-making, and close monitoring. We’ve seen from some of the other territories – those that have really carefully assessed the risks and balanced that using a clear governance and risk framework have meant that their employees and customers actually have had a lot more confidence. And it also means then that as an organisation they’ve been able to be a lot clearer with the communication around what they’re doing, so I think that has helped too. There are so many different areas to consider, so I think you do need quite a structured framework, but one of the areas that I think is important is making sure there are local people to focus on identifying and following up some local nuances or issues that might come up, because I think that will be important going forward, to give people confidence at a local level too that there is someone they can talk to, raise concerns and then if necessary, make adjustments. So that does mean that actually, the risk management around this is going to need to be quite dynamic, and be a clear focus.

The other one is very clear communication. As Chris has previously mentioned, communication has been very important, and I think we will see that going forward. Communication in terms of it being very clear, very honest, and also making sure there’s a feedback loop because people are concerned and we are going through a really really difficult human, very human challenge at this point in time.

And the last one that Chris mentioned actually was about being flexible and using scenarios to help manage those risks, and work out what you may need to do in different circumstances. And those things would be such as what are you going to do if your hand gel runs out? Are you going to close the office? What does it mean? What if someone becomes ill on site? What are you going to do? So just running through those scenarios to make sure that actually, the employees and customers are really confident that you have planned for different scenarios, and that you’ve communicated very clearly who is responsible for that and what happens. So I think we will probably see over the next few weeks the ability to respond very quickly, listen to feedback and then respond to that feedback, will be important.

RM: That’s a really really helpful summary. And it feels like that point around communication, clarity, consistency, and there’s a bit around repetition of message is really important, but then also having that local contact and that feedback loop, as you say, is going to be really critical. So, to sum up both, and maybe if I start with Chris, what’s your top tips for businesses looking to protect their workforce?

CB: Well I’ll pick up on that point of communication first of all. I think the overarching theme is around ensuring continued, authentic leadership. I think we’ve seen lots of great examples throughout this crisis of leaders communicating, I think in a much more real way, and I think that has really helped them to feel relevant and real to their broader employee workforce. It’s helped by the fact that people are doing it in many cases as a video conference from their home, which just makes it feel more real, so I think as we hopefully emerge from this crisis, I think making sure we hold on to that authentic leadership is absolutely critical, and as part of that, recognising that things are not going to be a linear process.

Providing clarity to employees as far as possible, I think employers will be forgiven, if the messaging changes, because everyone recognises that this isn’t a simple U-shaped recovery, but I think they won't be forgiven if they’re seen to be hiding behind any messages, so I think that clarity of message is absolutely critical. I think secondly, properly understanding what skills are really going to drive an economic recovery from an organisation perspective, understanding where are those potential gaps in those skills, and then seeing where those skills can be accessed from – as we’ve said, there will be more of an appetite to engage skills from a wider fishing pond, and I think that’s going to really help employees in the future and give more opportunity to a greater segment of our population as well, so I think it helps from a diversity perspective. And thirdly, I think thinking in a more innovative way, we know that employees are going to be working remotely in many ways, many aspects, for a long period of time. It could even be permanent for a greater segment of the population, so employers need to work really hard to continue to engage using technology and other means in a more innovative and effective way, and just recognising that there isn’t a one-size-fits-all. We all want to be engaged in slightly different ways, so thinking that through in a systematic way is really critical in terms of helping that workforce to be effective in the longer-term.

NS: From my perspective, I think detailed planning, particularly detailed risk assessment, with clear decision making will be really key to then help bring back that level of confidence that people need. I think the next one is making sure it’s really clear what happens at a local level. There will be changes locally, things will come up, and making sure that problems are reported, resolved quickly, dealing with local challenges, I think will be important to do. The next one then is being adaptable – we all know there will be a change, we’re in completely new territory now, there may need to be adjustments. Some things we might not get right – you might end up with a bottleneck by lifts and you may have to re-plan how people walk round the office for example, but actually getting that feedback loop quickly in place and adapting to it so that actually you rethink your risks, you manage them in quite a dynamic way, I think will be really key. And the last point I would make is just reflect on society and the society needs at that point in time. I think the most successful business will be those that (as Chris has mentioned) are very authentic, but are also aware what society is going through, and also because this is a real human challenge that we’re going through, so make sure that businesses support, listen to society, and society needs, and respond in a really authentic way to support people as we go through this crisis.

RM: Brilliant – some great top tips there, thank you so much Chris and Nicola for sharing your insights, and of course, thanks to everyone for listening. If you’d like to know more about the themes we explored in this episode, visit our website at pwc.co.uk/COVID19. Here you’ll find our guide on managing your virtual workforce. Please subscribe too, to keep up to date with all of our latest episodes, and until next time, please stay safe.

Participants

• Rowena Morris, director, PwC
• Chris Box, EMEA HR Consulting Lead, PwC
• Nicola Shield, Governance, Risk, Compliance & Control Lead, PwC