The COVID-19 pandemic has touched virtually every aspect of our working lives, imposing a new set of challenges for employees and employers alike. WSB faculty recently examined these workplace issues in a live panel discussion facilitated by Lauren Weber, a reporter with The Wall Street Journal.
The discussion, titled “Not Business as Usual: How the Workforce is Faring During Disruption,” included four faculty from the Department of Management and Human Resources:
- Sarada, assistant professor of management and economics
- Jirs Meuris, assistant professor and a faculty affiliate with UW–Madison’s Institute for Research on Poverty and the Center for Financial Security
- Jon Eckhardt, associate professor, faculty affiliate with WSB’s Weinert Center for Entrepreneurship, Discovery Fellow, Wisconsin Institute for Discovery, and the Pyle Bascom Professor in Business Leadership
- Russ Coff, professor and department chair, academic director of WSB’s Bolz Center for Arts Administration, and the Thomas J. Falk Distinguished Chair in Business
The below conversation has been edited for clarity and length.
Faculty Highlights: What are you focused on right now in relation to COVID-19?
WSB faculty shared their thoughts on the coronavirus epidemic and management and human resources issues
Jirs Meuris: Most of my research looks at employee issues and how employee wellbeing affects job performance and related outcomes. One word that stands out to me in thinking about how this pandemic is affecting employees is “uncertainty. Normally when people experience uncertainty in their work—such as pay or hours—they tend to remove themselves from that situation. Now people can’t get away from this kind of risk and uncertainty, so they have to find some way to cope with it. My perspective is that this pandemic has created a lot of uncertainty for people and that’s going to have a lot of devastating effects.
Jon Eckhardt: I’ve been thinking about two aspects of how the current economic crisis has been impacting entrepreneurship and the entrepreneurial workforce. One aspect of it is how this affects active companies. Many existing startup companies with high quality products are struggling to land customers and this will impact their ability to raise capital. Second, I am concerned about how the crisis may be affecting the pipeline of future entrepreneurs. In terms of future entrepreneurs, it really comes down to people’s perceptions, how they interpret and make inferences about the world. And two, how what’s happening objectively affects their resources and economic reality that they now face. Both effect how they make inferences about entrepreneurship as a career choice.
Russ Coff: My research is focused on human capital as a source of competitive advantage. I’m very focused on, at the firm level, the implications for employees. One project that I’m in the early stages of is on how businesses can restart given that many contract agreements and understandings have now been broken as a result of COVID-19. We think of employees as bound usually by implicit contracts. There’s an understanding of what the employer is allowed to do, but once an employer has violated the trust of an employee, then re-establishing that trust is really difficult. So that becomes a real challenge for how these firms are going to move forward. We’re looking at what kinds of relationships are at the greatest risk, the hardest to restart, and what the path forward would look like for firms.
Sarada: I’m an economist by training, so I work specifically in the area of the economics of innovation and entrepreneurship. There are two things that are important to focus on, not so much in the workplace, but more about what’s going to happen with the labor force and what’s going to happen with entrepreneurship. The first is really this unequal effect of the crisis on low wage workers. The second is, in a very short time, we’ll have this capital crunch for entrepreneurship.
Below are some highlights from the Q&A conversation:
Weber: What do you think have been the top one or two most significant management and human resources disruptions since the onset of the pandemic?
Coff: I’ll start with communication. I think that firms were not prepared for this kind of thing. Some firms are better positioned to respond to unexpected kinds of events, and this was certainly unexpected. Employees, and other stakeholders, frankly, are looking to the firms for communication of what is going on and what is coming. There is so much uncertainty and none of us handles uncertainty all that well.
So, we’re looking for these communications. Even a communication that would say, ‘we’re not sure what’s happening next,’ is better than no communication. Many firms just responded with no communication, and everybody knows something’s up, there’s something coming. It underscores this need for communications expertise and communications strategy.
Sarada: If you’re a more independent worker, if you don’t have as many household constraints, you’re going to be performing a lot better. That’s going to be picked up in these worker metrics to the extent that companies can measure it. That might increase the divisions between the performers and the non-performers in ways that could border on aligning with underlying discriminatory behaviors.
The other thing that I think is really going to be important is how to deal with new work-based architecture. To Russ’s point, communication is really important, and we’re all used to a certain style of communication and being made to feel valuable. Now companies are going to have to think about, how are we going to restructure meeting rooms? How do we make remote workers feel valuable? How do we deal with workers who have to care for children when schools are closed? I think companies are going to have to battle that because when the economy comes back, and it will, and always does—I say this with good confidence, I hope so—they’re going to have to deal with attracting those workers back.
Weber: You touched on something I wanted to cover in my next question. How have mobility and working from home changed how we work and where we work? Are there other implications that we will see from this?
Meuris: For me, two things come up. One is about the boundaries of work and the second is about identity. I think the boundaries of work have always been an issue with working from home. Normally, people can go from about 9:00 to 5:00, and they leave at five and they can physically get away from work. Whereas now, with everyone being at home, let’s say it’s 5:30 and your boss says, ‘Hey, can you do this,’ then that boundary has loosened. These boundaries are going to be an issue and they’re going to differentiate between people who can do work anytime from people who have to set those boundaries even though they’re at home.
The other issue is identity. A lot of people derive identity from their work and being in their workplace and colleagues. I think people may get less embedded in their workplace. So, to your question, they may be more likely to leave partly because they don’t develop those connections or those connections loosen to some extent.
Weber: Last year, Business Roundtable came out with a statement revising the purpose of a corporation—a model where corporations should consider not just shareholders, but also employees, customers, suppliers, and maybe others. So, when this all started, I thought this was a natural experiment in stakeholder capitalism. Here we are in a crisis and how are companies going to respond and will they put shareholders above all others? Obviously it’s never easy to create a real schema to test that, but I’m curious whether you think either that statement, or just a changing sense of norms, has had an impact on how firms have responded to this pandemic.
Eckhardt: One example I’ve observed from working with managers and entrepreneurs and executives, over the years, is that there’s often these two kind of mindsets. One is this mercenary mindset, where the relationship between the organization and the individual is mostly financial. People work for that organization because of the compensation they’re getting and then the organization views their relationship with their employees in the same way. That creates a certain kind of culture approach to solving problems which has some favorable and unfavorable attributes.
Another that I’ve seen is where it’s shifting towards much more actively in recent years, is more the developmental model, where employers take into account the careers of their employees. You’ll often see really good managers helping their employees get jobs at other companies if that is the best logical next step for that employee. What they’re doing is building a reputation for being a fantastic place to grow their careers, and this will attract other high-quality employees who very much want to be there.
I think that organizations that have had a mindset of thinking about their team of people in a more developmental way, are better in tune with the needs of their employees and they are more likely to be able to adapt to the fundamental challenges brought upon by COVID-19. I suspect the more mercenary organizations are struggling more because there’s always been this disconnect between employees and the company that they work for. The open communication and relationships don’t exist that are necessary for groups of people to manage change.
So I’m really excited to see how this plays out, but I suspect the developmental model which is probably closely linked to the stakeholder approach you mentioned will fare better in the crisis.
“Organizations that have had a mindset of thinking about their team of people in a more developmental way are more likely to be able to adapt to the fundamental challenges brought on by COVID-19.”
Weber: We have a question from the audience that asks, what advice would you give educators on pivoting their curriculum at problem-based learning to match the new needs of industry and employers to prepare students for the modern day workforce? And that dovetails with the question I wanted to ask—are there any skills that are recession proof?
Eckhardt: I feel like the life skills of being an innovator and learning how to be an entrepreneur and learning how to navigate innovation in industries that experience disruptions are essential career skills. To build on Sarada’s observation, universities may wish to consider adding entrepreneurship courses for students who plan to work in cyclical industries. One way of coping with that is learning how to create your own company, or to work for an early stage startup. These are often riskier endeavors, but on the other side, working or building your entire career around larger institutions is also a risky proposition as we’re learning again in this particular downturn.
Meuris: Particularly in relation to K-12, I think we have to think about very general skills. Think reading, think math, where the U.S. is definitely not at the top of the list of developed economies. So developing these general skills, I think, can also matter. K-12 can help children develop general skills that will still be relevant and transferable as they move through high school and college and into their chosen industries.
Sarada: I think it’s a question not so much of are there recession-proof industries, but of whether you understand that you are in an industry that’s highly cyclical, like hospitality. Now the pandemic has particularly hit that industry—but all recessions hit that industry. If you are in a particularly susceptible industry, how do you remain nimble? And how do you save? Savings matter a lot more because you need to buffer those 18 months when there is a recession. I think that’s more important than telling everybody to go into recession proof industries. What’s more important is to understand what the risks are, what the tradeoff is, of the industry that you do go into.
Coff: Our department had a debate recently about whether we should offer an online course on how to work in (and lead) effective teams, and we decided to do that. Had we asked this six months ago, I think we might have had a debate about whether this was appropriate for an online course. We didn’t have that particular debate because it’s so clear that now people are working in teams and they’re all in different places. And this is a fundamental skill, a general skill, along the lines of what Jirs is talking about, that everyone’s going to have to have.
Look at the technology that’s in place now. Imagine how much of the economy would have had to have been shut down 25 years ago versus right now. It’s shocking. It’s startling. And in some sense, skill-wise, the train has left the station. People are used to functioning in this way. The transition was a whole lot smoother than I think a lot of people might have imagined that it could be as a result.