The New Role of Human Resources in the New Normal

The arrival of COVID-19 has marked a milestone in the history of humanity and had an unprecedented impact on Human Resources (HR) departments. Payroll administration, workplace relations management, internal communication, and talent development and attraction took a backseat given the gravity of the crisis.

Their first acid test was to decide how and when to send employees home, owing to the high contagion risk and inconsistencies in state regulations. Companies with headquarters in other countries, where the virus had already made an impact, enjoyed far clearer guidance and dedicated teams to assist in executing preventive measures. This decision was more difficult and prolonged for smaller, local firms, not only because of their lack of preparation, but also the potentially devastating effect on their finances. Concerned about continuing to provide services, restaurants, hotels and airlines endeavored to hold out as long as possible before shutting down operations. In many cases, the impossibility of working from home triggered untimely dismissals.

Working remotely sounds easy when it is temporary or specific to some roles, but it is far more complex when generalized, requiring the formulation of basic work policies and the guarantee of minimal conditions for employees to continue with their functions. Topics such as system security, communication channels, central control points, and replacement and succession plans were the order of the day. Not everyone could go home, since there were critical activities and sectors, such as healthcare, that were forced to redefine their health protection policies.

Working from home was a new, unknown reality that, together with the difficulties faced by families with school-age children, triggered tension and imbalance in many homes; yet another topic that ended up on HR desks. Even though the company wasn’t responsible for the crisis, it did have to guarantee team productivity. HR, in conjunction with the lines of business, put together constant collaborator communication plans that included webinars, frequent emails and virtual team meetings to ensure that everyone received accurate information on the virus, as well as tools and strategies to deal with working at home, and, last but not least, to create recreational environments that would make up for the lack of physical closeness with colleagues and friends who are without doubt in similar situations.

However, this was not HR’s greatest challenge. Companies immediately began to calculate the financial effects of not being face-to-face with their customers, delays in contracts, late payments, among others, caused by the crisis. “Cash is king” became the mantra of many organizations that sought ways to soften the effect of lower sales by renegotiating office lease agreements, postponing payments to third parties and, after exploring all the options, affecting collaborators’ salaries.

For a regional HR executive, this was no easy task given the differences in laws and regulations. For example, in Brazil, legislation prohibited salary decreases (the government subsequently changed this regulation, making it possible for a maximum of three months with a proportional reduction in working hours). The level of complexity was high, since many collaborators are hired through third parties. Moreover, there are differences from one country to another in benefits, such as grocery vouchers (usually a percentage of the salary), gasoline allowances, contributions to pension funds, etc. Defining the minimum levels for applying payroll cuts so as not to affect people who earn lower wages was particularly difficult. This involved analyzing the cost of living, family food basket and impact by levels and roles, in order to guarantee coherent and equivalent parameters between the different countries.

Achieving equity and consistency in communication became the premise for management and human resources. Human resource executives, particularly those in charge of internal communication, had to find a way to reflect the nature of the financial situation, the efforts made to keep the company afloat and the urgent need to affect a percentage of wages.   

Furthermore, not only hospitals and laboratories faced talent-related challenges. Some companies saw their more digital profiles migrate to better opportunities since many companies needed to open e-commerce spaces. Announcements of salary reductions (some for up to nine months) or of scrapped benefits made more than one employee think about company and career changes. Leaders, backed by their HR departments, took great pains to play a more active role in their teams’ day-to-day work, and become more involved in defining their goals and closer to their personal environment and plans and aspirations for the future.

This crisis is not the last we will face in this era, but it has definitely provided fast-track training in changing the way we work and operate internally, relate to our clients, and, above all, react proactively and systematically towards a company’s most important asset: its people.