North America Report

“We are capitalizing on learnings from the pandemic to optimize our employee experience”

How North American firms are preparing for a post-pandemic future

In the US, the fight against the pandemic has reached a tipping point. As of the end of June 2021, nearly half of Americans were fully vaccinated and mask mandates had largely been lifted. However, this is mixed news for business leaders, who are now obliged to make tough decisions about how their organizations operate in future.

The path forward is proving to be less clear than expected. Following a chaotic transition to remote working, many companies have discovered that the ‘new normal’ offers many benefits, both for employees and for businesses overall.

New global research from KellyOCG shows that the vast majority of executives in North America report that remote working has positively impacted employees’ ability to innovate (76%) and collaborate (77%), and that it has increased their motivation and engagement at work (79%).

“When we embraced agile working, we saw a whole new level of resilience, creativity, and resourcefulness in how we get things done,” says Heidi Gerhard, Head of Talent Strategy for BASF in Florham Park, New Jersey.

However, despite the benefits of remote working, almost a third of executives plan to bring their employees back to the office. Indeed, 29% of North American respondents say they expect everyone to return to the office full-time once the pandemic has passed – slightly less than their peers in Asia-Pacific (32%) and slightly more than EMEA organizations (28%).

Nevertheless, the majority are using their experience of the pandemic to reimagine how work gets done, and to understand the benefits they can derive from embracing a more agile workforce model.

The solution for many North American companies (57%) is to adopt a hybrid approach, giving employees the flexibility to work either in the office or remotely. Another 11% expect the vast majority of employees to work remotely on a permanent basis.

The continued support for hybrid working – a strategy that was supported by only a small fraction of companies prior to 2020 – is owing in part to the many benefits business leaders received during the pandemic. Along with enabling a more productive and innovative workforce, many of the executives surveyed believe a hybrid or fully remote working model would allow them to recruit from a larger talent pool, as well as improve their ability to infuse diversity, equity, and inclusion (DEI) in the company culture, and meet business goals more effectively.

Yet, to achieve the full benefits of an agile and inclusive workplace, companies must go beyond simply offering flexible work arrangements; they must make systemic changes to the way they plan their workforce mix; how they source, engage and manage talent; and how they use technology to engage and monitor skills and performance across the enterprise.

The survey data suggests that many organizations are not yet up to this challenge.

¹ https://www.nytimes.com/interactive/2021/world/covid-vaccinations-tracker.html

Managers are unprepared for hybrid working

Respondents from North America say a lack of visibility of the optimal mix of talent is already the greatest workforce-management risk they face. The adoption of hybrid working models, where employees perpetually flow in and out of the office, will only exacerbate this challenge, and many of the executives we surveyed are unconvinced that they have the capability to adapt. Fully 26% report that their leaders lack the skills to manage a hybrid workforce, and 22% admit they have skill gaps that they don't know how to fill.

Members of the leadership team that are still not onboard with remote working may further impede progress. Despite the listed benefits, 40% of respondents still say remote working is “mostly a disadvantage” for their organizations. It is a surprising disconnect that suggests not all organizations are ready for a more fluid workplace.

Vanguards lead the way

However, within the global data, we found a group of leaders who are ahead of their peers in preparing for a more fluid future. These leaders, who we are calling ‘Vanguards,’ report that employee wellbeing and productivity have increased during the pandemic. The data shows that Vanguards take a more strategic and long-term approach to improving the resilience, agility, and wellbeing of their workforces compared with the ‘Laggards’ (respondents that report a decline in employee wellbeing over the past 12 months).

Compared to the Laggards, Vanguards are far more likely to report that remote working has increased employees’ ability to innovate (91% vs 52%), made them more open to using new technologies (87% vs 53%), and improved their productivity (90% vs 48%).

Crucially, Vanguards are also far more likely to report revenue growth over the past three years (94% vs 36% of Laggards), which indicates that their agile response to the changing workplace is having a positive impact on overall business performance.

Among the 1,000 global executives surveyed, more Vanguards came from North America than any other region.

What Vanguards do differently

The survey found that Vanguards adhere to four key dynamics in response to the pandemic that, together, allow them to create a more agile and resilient workforce. Many North American companies are following their lead.

#1 They welcome workforce fluidity

While some business leaders are passively observing the evolution of work in a post-pandemic world, Vanguards are actively embracing it. This group is more likely to have comprehensive strategies in place to bridge skill gaps, gain insight into skill needs, and to make use of contingent labor as part of their broader workforce strategy.

Among the regions surveyed, North American executives are most likely to follow this path. Almost 80% of this group report that they have a clear view of companywide talent, including permanent and contingent workers, and three in four say determining the optimal mix of permanent versus contingent workers will be key to managing the workforce effectively in the future.

Many North American respondents also plan to take a multifaceted approach to filling talent gaps, which includes bringing on a combination of new full-time talent (46%) and contingent labor (40%), and implementing reskilling/upskilling initiatives among current staff (45%).

“[Workforce fluidity] goes back to the overarching talent strategy, and tying talent to your growth objectives,” says Jocelyn Lincoln, Chief Talent Officer for Kelly in Detroit, Michigan. She notes that many leading organizations are now using contingent labor not only to fill gaps, but as a point of difference. “Contingent workers aren’t encumbered by what the company has always done,” she says. “It is a way to bring a fresh outside-in perspective to the business.”

#2 They care about the employee experience

Vanguards know that creating a positive employee experience leads to greater retention, productivity, and engagement, which is why 91% of them say improving the employee experience is as much of a business priority as improving the customer experience.

Fully 79% of North American executives agree.

These leaders believe the strength of the employee experience is a critical metric of business success. North American executives are also more likely to benchmark employee value proposition (EVP) against other firms in their sector (36% of North American firms versus 33% of the global average), and they are more likely to track employee experience through surveys and focus groups than other regions (56% of North American firms run employee focus groups versus 51% of the global average).

These executives understand that creating a positive employee experience is key to building a resilient workforce. “We are capitalizing on learnings from the pandemic to optimize our employee experience, because we recognize that it will drive our competitive advantage,” Gerhard confirms. “It opens us up to new talent, new perspectives and, ultimately, innovation, which delivers value for our customers.”

#3 They are making strides with DEI

Many North American companies lag behind the Vanguards in terms of the maturity of their DEI efforts – but they are making progress.

Less than half of North American respondents (45%) have executed a fully developed DEI strategy for full-time employees, and only 22% have a DEI strategy in place that includes contingent workers (versus 67% and 32% of Vanguards, respectively).

However, North Americans are leading other regions in implementing initiatives to improve DEI across their organizations. More than 80% of North American respondents have hiring and promotion quotas and career-development programs in place for women and talent from under-represented groups, and 88% provide a clear route to report discrimination.

They are also more likely than any other region to provide DEI training and incentives for leaders, and to report DEI metrics both internally and publicly.

This all suggests that North American companies are taking the steps needed to create fully inclusive environments, which will be critical going forward, says Tammy Browning, President of KellyOCG. “Statistics show that, when companies have a complete DEI strategy in place, they understand the customer better and it can be linked back to better business performance.”

#4 They use technology to manage a workforce in flux

The adoption of new workforce technology may be the biggest challenge companies face in adapting to a more fluid and hybrid future. While 83% of respondents in North America say their organizations could benefit from adopting leading-edge technologies to simplify the workforce-management process, more than half (55%) admit to feeling “overwhelmed” by the range of options currently available.

That is slowing their digital evolution and putting them behind Vanguards and their global peers. Less than half of North American respondents are currently using leading-edge technologies to monitor productivity (47%), manage their remote workforces (40%), or improve recruiting (38%). Moreover, less than a third are using leading-edge solutions to manage contingent labor or to track employee wellbeing.

As organizations give employees the option to work remotely over the long term, the adoption of technologies will become increasingly necessary to attract candidates from broader talent pools, foster collaboration among dispersed teams, and maintain high levels of visibility of the talent mix across the enterprise.

This is an area where companies must improve or risk being viewed as laggards by current and future employees, says Lincoln. “The perception of speed and agility is connected to being technologically advanced. If first impressions feel clunky, they may wonder what else about your organization is a little bit behind."

Follow the Vanguards

Executives in North America must now make decisions about how they are going to adapt to the future of work. The data suggests that, when companies follow the lead of Vanguards, they will be able to attract, retain and motivate talent to meet their business goals. In contrast, those who lag behind may lose their best talent to more agile and inclusive competitors.

“Taken together, the research findings suggest that, by focusing on the four dynamics – talent fluidity, the employee experience, DEI, and technology-enabled workforce management – organizations across industries can boost employee engagement and productivity, and reinforce their own ability to recruit and retain talent,” explains Browning. “Ultimately, this will give businesses the edge they need to succeed in an increasingly competitive and fast-changing marketplace – ensuring their workforce is fit for a future in flux.”