Few can deny the impact that the COVID-19 pandemic has had and is having on the way people work since the global escalation of the COVID-19 pandemic in March 2020.
"We have seen massive changes take place over the last months," explained Daniela Krömer, an employment law expert with CMS Austria, "and they affect all areas of work."
Although the epidemic in some countries has subsided and economies are tentatively reopening, companies continue to face daunting challenges.
According to CMS Austria's Krömer, employers must still contend with employees working remotely, the thorny issue of how to monitor staff members working from home, and mounting evidence that the crisis has exacerbated gender equality.
These are issues employers are wrestling with over the short term as businesses attempt to normalise. According to Krömer, there is a more pressing concern: "We are trying to answer the question: what the long-term fall out of the pandemic is."
The effect COVID-19 will have on the labour market in the future is closely linked to the impact the pandemic has had on employment so far.
COVID-19: a game changer
According to Oxford's Jeremias Adams-Prassl, citing research conducted through the universities of Oxford, Cambridge and Zurich involving 28,000 workers in the US, UK and Germany, COVID-19 has had a profound impact on flexible workers and employees.
However, explained Adams-Prassl, "the impact of COVID has been very different on different groups in the labour market."
The research found that conventional wisdom, which suggested the self-employed would suffer most during the pandemic and salaried or contracted employees would be least affected, did not prove to be true.
Although self-employed workers were indeed impacted, various classifications of permanently employed workers were also adversely affected. "In essence, the more flexible the contract type," explained Adams-Prassl, "the harder hit individuals are."
Research on job losses in early April in Germany, the US and UK reveal that workers under flexible working arrangements were the first to be laid-off or fired.
The study also indicated that of the three countries examined, Germany experienced the lowest number of job losses during the height of the pandemic, which Adams-Prassl states could be the result of the German government's Kurzarbeit programme (or short-time work benefit scheme) that may have been more flexible and successful in bolstering employment during the crisis than the furlough schemes implemented in other countries.
The data clearly supports that the pandemic has also had an impact on gender inequality, with research finding for example that more women workers in all three countries carried the brunt of the burden for childcare, elder care and homeschooling during the lockdown.
The effect that these issues and others had on companies was magnified by the speed of the pandemic's spread and the fact that the business community had little time to prepare.
"We've had to learn as we go along and deal with [the pandemic's] fall out," explained Alison Woods, Partner and co-Head of Employment Law for CMS UK.
Differing responses
According to Woods, although many countries around the world have been providing support to business to offset economic restrictions and the pandemic, companies have not responded to this support in the same ways.
Response strategies have proved especially complex for multinational firms with offices in countries in which the spread of the epidemic and response by their governments differed. In almost every country, the pace of change was overwhelming.
The changing nature of the support schemes proved "very difficult when you are trying to preserve peoples' jobs," said Alison Woods. "The uncertainty that surrounded some of these [government] schemes, in the initial stages at least, does mean that some jobs were not saved".
The reason, explained Woods, is that "businesses simply couldn't wait" for the government to respond to the crisis. A further complicating factor was that the crisis hit different business sectors in different ways requiring different types of government support.
In terms of the way that the crisis impacted companies, Woods states that this can be observed by looking at workforces that fell into one or more of three categories: office-based businesses; service-sector businesses such as hospitality, retail, and leisure; and companies providing essential products or services.
Office-based businesses
Office-based businesses were generally able to respond to the crisis by having their employees work from home. Remote work kept many companies in operation, and for some types of businesses, such as law offices and consultancies, the transition was (relatively) not difficult. Working from home, however, brought its own complications: for example, how to monitor and manage a dispersed workforce, and how to protect confidential business strategies and trade secrets when they are being discussed in unsecure premises (whether peoples' living rooms, or over increased use of messaging apps)?
Service-sector businesses
Most service-sector businesses, on the other hand, lacked the flexibility to conduct operations remotely on any scale, at least without restructuring their offering. Some, primarily retailers, remained in operation by offering online shopping, but of course this still left huge numbers of staff affected, who faced unemployment – or, if they were lucky, coverage under a government support scheme - during the lockdown.
That these low-wage workers – with limited savings and resources to fall upon – were among the hardest hit during the pandemic highlights the suffering that was experienced during the crisis and the unequal way this suffering was distributed.
Another important issue, according to Woods, is that many companies that have been able to support their employees during the crisis (thanks to state assistance) are unlikely to be able to sustain all these jobs in the future, as restrictions continue long term, and consumer confidence remains suppressed. As government support ends, further job losses are inevitable.
Essential companies
A different set of issues has affected those parts of the economy deemed essential, and which could not shut down during the pandemic. Employees here faced different risks than their furloughed brethren. While work could generally continue, safety measures have transformed what this looks like in practice, and employers in these cases have had the earliest experience of the realities around trying to operate in a covid secure way, and manage employee concerns as to the realities of this. Even in these cases, job losses remain an issue – reduced operational capacity required to enable social distancing meaning employers have had to keep this under careful review.
As more and more economies begin to reopen, businesses focused on bringing their staff back to the workplace are having to walk that tightrope between making jobsites as safe as possible, and making them viable.
Female workers post-pandemic
As companies look forward, many are also confronting unexpected challenges, such as the pandemic's creation of a gender schism among employees.
According to Daniela Krömer of CMS Austria, there is mounting evidence that the crisis has impacted women far differently than men and is fostering inequality.
Alison Woods of CMS UK explains that many businesses have implemented "readiness" tests ahead of the reopening period, to determine if a company is able safely to accept employees back. When applying this assessment to employees – in essence, asking each worker if he or she is personally ready to return – companies are finding that women have been less likely to be able to resume their onsite duties, and more likely to want greater flexibility on an ongoing basis.
Although a single company cannot solve the cultural dynamic that still results in women carrying a disproportionate share of ‘domestic’ duties, companies are recognising this problem, and the need to consider how best to remain on track with diversity priorities at work. While enabling continued remote work will be a good thing in supporting employees with different personal circumstances, being aware of the risks of this longer term – where not actively managed to ensure full engagement – is important. Although this solution will keep these women employed, some analysts worry that such a trend may cause a gender divide where workplaces become largely male dominated with all the implications on workplace culture such a shift might entail.
Although workers are not likely to stay at home indefinitely, extended remote-work arrangement could have an impact on promotions, responsibilities and job security that cannot be ignored – out of sight should not mean out of mind, and businesses will have to proactively address any impact, so as to ensure equal treatment.
According to Professor Adams-Prassl, governments have recognised the gender-inequality problem more widely and have obligations to address it. In relation to the crisis specifically, Adams-Prassl highlights the importance that the various government agencies responding to the crisis (e.g. education and labour departments) synchronize their policies so that their programmes support each other (e.g. coordinating the reopening of schools with the phasing out of any job support, so that employees are supported until able to return).
Also, Adams-Prassl states that governments could benefit from initiating post-pandemic recovery programmes that target sectors that directly impact families, such as social services; or by promoting pay raises in professions such as nursing, which are dominated by women.
Remote work: a temporary fix or the future?
The possibility exists, however, that remote working in the future may not be a professional disadvantage. Not only has remote work become more popular generally in recent years, the experience of the pandemic has proven that remote work is not only possible for many tasks traditionally performed in an office, but is now preferred by many workers. Several studies support an expressed desire by the majority of workers to have increased agility supported, in how they work.
Remote working may become the preference of more and more companies, seeking to improve efficiencies, and to reduce the costs of providing office space. One problem with transitioning to remote work, however, is that the labour codes of most countries are predicated on an assumption of an employer controlled workplace in most cases.
If employees are working from home, how can working times be regulated or safe-working conditions be guaranteed? If an employee is injured at home during working hours, who is liable? Clearly, if remote working becomes more widespread, workers will still need to be protected, but more disputes are likely in terms of who is liable for what.
Also, remote work, although convenient for many, reduces engagement between workers and could stymie collaboration and the development of leadership skills. How this might affect innovation, supervision of tasks and the creation of talented managers over the long-term remains to be seen. As enforced remote working has continued longer term, its limitations have also been identified, in not providing the human contact that can often drive successful teams.
"Blended" working environment
According to Alison Woods of CMS UK, a "blended" working environment might be the answer where companies offer employees the option of working from home or other sites, but also the freedom to return to the workplace from time to time when personal meetings and interactions are necessary.
"What we are recommending is that people embrace this topic [of a flexible working environment]," explained Woods. "Employees have expectations now. They are thinking about this and having discussions on what they want their working lives to look like moving forward. For a business not to recognise this is a danger."
Remote work also raises the practical question of how work can be monitored and outcomes measured when a worker is operating from home. One strategy, which Oxford's Adams-Prassl has researched extensively, is algorithmic management.
Also known as big data HR, algorithmic management taps AI innovations and uses apps to manage workers and record outcomes.
On a more basic level, some companies are attempting to use technology to monitor employees. This can take many formers, and there are tales of extreme requests whereby employees have been asked to keep their computer cameras on at all times so that managers can check their status at will. There are significant cultural and trust issues with this of course. Furthermore, the legality of monitoring, vis-à-vis privacy and data-protection laws such as the EU's General Data Protection Regulation (GDPR), is carefully controlled, and the fact that technology is available does not mean in many cases it will be justified and lawful to do so.
Some algorithmic management systems are less invasive, but Adams-Prassl warns that while using AI algorithms to manage workers is likely to increase, care needs to be taken to ensure this does not in itself hardwire bias into a process. There are clear examples of this where the data set from which the algorithms have learned, have in themselves been tainted with bias.
For the present, CMS's Alison Woods recommends that managers exercise caution when using technology to keep track of workers.
"None of us is saying that monitoring is bad," said Woods. "It is absolutely not a simple issue. Monitoring in some shape is probably essential."
But a total reliance on technology is no more the answer than a total transition to remote work. "We shouldn't be relying on tech entirely in this situation," said Woods.
"We should be thinking about the human factors."
For more information on how the pandemic has affected working conditions in your country, contact your regular CMS advisor or CMS experts:
- Alison Woods, Partner and co-Head of Employment Law for CMS UK
- Daniela Krömer, employment law expert, CMS Austria
