HR Management & Compliance, Talent

New Ways of Working: The Digital Workforce and Hybrid Work Styles

2020 was a rollercoaster year for businesses, full of unforeseen challenges that forced organizations to adapt quickly or face getting left behind. According to Sage’s 2021 Return to Growth Outlook Report, which surveyed finance and accounting leaders at growing businesses (ranging from 50-1,500 employees), more than one-in-three businesses say their digital transformation plans accelerated by a whopping three to four years due to COVID-19.

remote work

This unanticipated rate of transformation can create challenges throughout an organization, but especially for those in a company’s HR or People team. Not only did HR leaders have to work with other departments to rapidly stand up fully remote workforces within a matter of days, but they also had to make sure that their employees felt supported during this transition. This included adapting to new ways of working and developing resilience in managing work-life fusion and all the associated stress that came with it. In fact, 65% of HR leaders told us they felt they had a vital role to play in the pandemic, enabling remote working and supporting employee well-being as a result, according to Sage’s “HR in the moment: changing expectations of HR” research report.

Company success hinges on employee success. This has never been more obvious than over the last year, when employee well-being and support have been vital to keep companies moving forward in uncertain times. According to APA’s Work Well-Being Survey, more than nine-in-10 workers say they feel motivated to do their best, are satisfied with their job, and have a positive relationship with supervisors when they have senior managers who show support through involvement and commitment to well-being initiatives. Employees are the backbone of most businesses, and HR leaders quickly realized the value in keeping their workforces motivated and enabling workers to do their jobs from anywhere. As a result, business leaders have adopted several initiatives, such as more flexible schedules or allowance of working remotely, aimed at improving employee experiences during lockdown that they intend to keep beyond the pandemic. For any progressive people-focused company wanting to get ahead and drive business resilience and success, these programs are here to stay.

Attaining Top Talent in a Digital Workforce

Hiring is usually expensive, which is why it’s critical for organizations to retain their top talent, creating great workforce experiences that keep employees motivated and engaged–even more so through difficult times. To help support this effort, following the pandemic, two-thirds of Sage’s surveyed businesses plan to increase budgets for employee retention programs in 2021. Specifically, mid-sector businesses (those with 250-999 employees) are the most likely to invest this year in retaining their best workers, with 36% noting plans to significantly increase funding for employee retention.

Investment in employee retention strategies isn’t the only area receiving a financial boost. Research found that 62% of businesses plan on increasing their budget to attract new talent, with 29% planning to increase hiring budgets significantly. Over one-third (38%) of businesses with 500-749 employees intend to increase spending significantly on talent acquisition, compared to only 9% of smaller companies. Furthermore, 23% of companies hired and onboarded new staff completely digitally. Companies are likely to embrace digital hiring, as it allows HR to cast a wider net in the talent pool, especially where remote working may be an option. As they do, focusing on remote onboarding experiences that set employees up for success and enable them to do their best work, without meeting colleagues immediately face-to-face, is vital.

This shift—along with increases in funding for talent retention and widening talent searches to include internal talent and passive applicants—suggests that mid-sector businesses could be tracking for significant economic growth and hints at where competition for talent may become the tightest in the 2021 job market.

Non-Traditional Programs and Well-Being Policies Are Here to Stay

Unprecedented times call for new approaches to typical corporate policies and programs. In fact, 27% of businesses surveyed noted that they implemented non-traditional HR and People policies for the first time during the pandemic. These new policies included providing flexible schedules, allowing for remote work, offering childcare services, and more. Larger organizations were the most likely to have implemented these policies for the first time over the past year (36%), suggesting that big businesses realized a greater need for more modern and flexible work policies compared to before the pandemic.

Additionally, organizations implemented many new programs aimed at recognizing the new challenges of managing work and childcare by supporting work-life fusion for working parents. For example, 39% of businesses Sage polled provided childcare assistance during 2020, while 35% plan to increase investment in this area in the coming year. One-third of those surveyed also plan to make the post-pandemic office more child friendly. These policies mark a shift in employer attitudes and a change in expectations for working parents, enabling them to better balance career and family life, with very few companies intending to roll these policies back post-pandemic.

COVID-19 also shone a bright light on the importance of employee health and well-being. As a result, 42% of companies offered increased healthcare options in 2020 to help ensure that their workforces could receive proper treatment if they did fall ill. Additionally, almost half (44%) of all businesses plan to invest more in healthcare, including mindful and mental health options, being offered to employees in the future. 

Focus on Flexibility

COVID-19 pushed organizations to embrace flexible and remote work options in more ways than ever before. Before the pandemic, banks, regulated industries, and many financial service companies were less supportive of remote working. However, many were not given a choice between in-person operation and the need to transform remotely as a result of the pandemic, with 46% of those surveyed now implementing long-term or permanent remote working policies.

While many employees will likely take advantage of these long-term remote work policies, it’s important to realize and understand working from home is not for everyone. Some employees thrive on face-to-face interaction with their coworkers, or simply find that they can focus better in a corporate office environment. To address this, 84% of companies intend to either increase or keep a steady budget for “in-office” perks over the coming year.

Furthermore, as many companies start to plan for office re-openings, health and safety practices will be top of mind. HR departments and organizations will need to navigate plans that create safe environments and policies for both employees who are confident about returning to work and those who have reservations. Providing both in-office and remote work options allows employees to enjoy greater flexibility and promotes choice—crucial for delivering great employee experiences in new hybrid work styles.

The Digital Workforce and Hybrid Work Styles

It’s somewhat bizarre that it has taken something as small as a virus to create the necessary disruption to accelerate the shift in work culture, by forcing leadership teams to reevaluate many corporate policies and overhaul them to support a digital workforce and associated work styles. According to Sage People’s Changing Face of HR report, 87% of C-suite HR and People leaders agreed that digital transformation accelerated within the past two years.

Not all were able to flex quickly. Industries were affected in different ways, and while some (e.g., transportation and hospitality) suffered badly, others (e.g., tech and business services) prospered. Progressive, agile HR and People teams in such industries placed greater emphasis on effective two-way communications, listening to employee concerns by leveraging regular pulse surveys, learning from this feedback, and then responding quickly by creating and communicating more flexible policies as work-life fusion became a reality. Many also embraced non-traditional programs to enable employees to work from anywhere, while providing better support for working parents, greater health benefits, and a focus on well-being.  

As a consequence, many companies are now adopting hybrid working policies as offices begin to reopen. For example, Sage has just introduced a new, principle-based program called Flexible Human Work, co-designed with employees, which embraces and builds on feedback and learnings from the pandemic. The program will be driven by team agreements that will evolve as the company experiments, learns, and continues to adapt ways of working, while remaining focused on customers.

What Next?

By concentrating on changing employee experiences during these unpredictable times, HR has become more responsive to evolving needs, with the result that businesses have become more adaptive and resilient. Our research found that 60% of employees noticed HR’s shift to more people-focused ways of working during the pandemic, and over a third (34%) said HR had become more responsive to employee needs. By remaining flexible and accelerating digital transformation, successful companies not only have managed the challenges of 2020, but also are using the lessons learned from listening to employees and customers to strategize their future growth. The question now is whether these hard-won learnings will be channeled into further developing flexible hybrid work styles or whether businesses simply revert to “normal,” ingrained but now-dated 20th-century working practices.  

Paul Burrin is Vice President of Sage People.