Lessons Learned in China for Human Capital post COVID-19

With China hopefully over the worst of the COVID-19 outbreak and, as businesses return to office buildings, what can we learn about how organizations, leaders and their employees managed this unprecedented situation? And what are the implications for a new post-COVID-19 future?

COVID-19 Identified  
The cause of the COVID-19 outbreak in Wuhan, China, was officially identified on 9 January 2020 as the novel coronavirus, SARS-CoV-2. The outbreak coincided with the forthcoming Chinese New Year and initially the holiday was extended.

After the holiday, 80% of organizations chose to enforce working from home. This decision had a significant impact on how organizations need to re-imagine how their businesses operate, how to interact with clients and how their people work and are rewarded. 

Leadership through Emergency Committee

Peter Zhang, CEO of Aon Consulting and the Human Capital business within China, explains how China reacted.

“Within the first week of the COVID-19 outbreak, 77% of organizations enacted their emergency committee structure led by CEOs. Its role was to provide direction and make decisions in a rapidly-changing environment. Its main concerns were two-fold: the protection of employees’ physical and emotional health; the recovery and continuation of the business. Functional and business leaders focused on working with the government to understand what action was needed to support and sustain its employees and to adapt accordingly.

Business continuity was so essential and the most successful organizations emerging from the crisis were those which adapted to new business models as markets demanded; switching from offline to online models, redesigning supply chain and especially redeploying logistics, adjusting financial phasing and forecasts; and reviewing the rewards and benefits of employees, especially sales force and people in the virus epicentre to access the needed pay.

The crisis saw 80% of organizations relocating their employees to work from home in the space of a few weeks. Working from home required the Chinese emergency committees to rethink how it supported and equipped their employees. Those most successful ones were companies which could empower employees to adjust to  flexible working by expanding IT capability and upskilling its people. They readjusted their parameters and made sure there was as little disruption as possible. Agility and speed of change were needed to divert marketing and sales investment away from planned activity to more online campaigns in order to reach customers where they now were - at home.”

Aon’s Human Capital group asked organizations in Europe and North America how they are reacting, and planning to react, to the COVID-19 crisis. In just five days, we got over 2,000 responses. Results from the survey on 20 March 2020 showed that already 70% of head office staffs are working from home – in the space of one week.

In nutshell, leaders demonstrate tremendous leadership through agility, adaptability, compassion and decisiveness.

A Focus on Health and Safety – and Financial Security

Peter Zhang explains:

“The core of all leadership action was to protect the health and jobs of all employees. When faced with disrupted markets, productivity and sales, established commercial and operating models no longer served the business. The outbreak coincided with the annual pay and bonus review, and we witnessed innovation and real flexibility in how organizations approached this. To save the jobs of more junior employees, executives took, in some cases, significant pay cuts.”

It is clear organizations are rethinking how best to continue to financially supporting their workforce in the best way. Aon’s 20 March 2020 pulse survey shows that, of the 2,000 responding organizations:

  • 50% of companies are not yet adjusting pay.
  • 40% are continuing to pay those who are not able to either work at the office or work from home.
  • 11% of companies are considering giving hourly/overtime eligible employees additional compensation if their take-home pay is reduced by working from home.
  • 34% are not planning to make changes to bonus payments.
  • 47% are closely monitoring the situation and will make decisions as needed.

HR Leaders Must Adapt

Peter Zhang comments: “The HR role has been critical during the crisis. We have witnessed HR leaders focused on the care, health and safety of employees, having to work out new solutions to offer support to employees. They have worked through how to move HR from an offline function to an online lifeline for those working remotely.

“They have needed to learn and act quickly on how to best communicate and inform the workforce with instant messenger, WeChat, becoming the tool of choice. Learning from others became more important and HR leaders have upped their use of online professional networks to share ideas and find answers. Never before has the professional network been so important.”

Agility in Action

Peter Zhang explains:

“The overriding success factor for organizations through the COVID-19 crisis has been an organization’s agility and its people. Without the ability to change direction, embrace new ideas and move along a different path swiftly, organizations would have been in very real difficulty. COVID-19 has made us all work differently and has helped people to come together as a stronger team.”

There are two very clear client examples of this agility in action:

Restructuring pay and reward

The absence of new car sales in Q1 forced one automotive manufacturer to look for 20-30% cost savings. Without a doubt, its workforce was under threat. We worked with the company to rethink and remodel the remuneration structure and finessed the balance between fixed and variable pay. By doing this, jobs were saved, and costs can now be better controlled. One additional learning point - and a sign of the times - was the importance of strong and clear employee communications as to why this reward restricting was taking place. Agility and accountability by leaders,  staying transparent and positive to employees will ensure the business gets through the uncertainty.

Embracing HR Technology

All of the in-person interviews had to be cancelled for one corporation – and yet  recruitment needed to continue. By reworking the hiring process and recognizing the value that technology offers, the company has continued its hiring program, managing the details of 800,000 applicants in one week. It adopted our online video assessment and interview platform. Working practices have changed and those businesses that adapt, flourish.

How is Europe and North America reacting right now? The 20 March 2020 Aon Pulse Survey indicates that:

  • 22% of firms have implemented a hiring freeze.
  • 60% of companies are currently considering a hiring freeze.
  • Only about 15% of firms are downsizing.
  • 12% of organizations are freezing or postponing salary increases - maybe for 60 or 90 days.
  • More than 30% of respondents have increased sick leave.

Agility, Curiosity and Learnability

There was an unprecedented need for a new way of working and, therefore, a new set of competencies emerged. Employees needed new skills to work from home, managers required a new leadership style and businesses were compelled to reconsider how people were rewarded. 

At the core is agility - of structures and processes, of working and daily behaviors. Employees have had to adapt and flex, teams adopt new virtual remote working and leaders rethink how best to lead.

Those with the curiosity to rethink and reimagine new behaviors, markets and approaches have ridden the wave of uncertainty. People have embraced the challenges, overcome hurdles, worked through issues and found new ways of doing things. Curiosity helps us adapt to a new world.

New skills have been learned – and learned quickly. From working out how to leverage the technology to work remotely, to adopting a new process or system that has come into force. Learnability has been critical.

These new competencies are the competencies of an uncertain future. It is unlikely that any resolution of the pandemic will see a return to the normality of 2019. As such, we have to consider several new ways of working now taking shape: new habits; new behaviors; new learnings; and new needs.

Building a future ready workforce, from now.

Please reach out to your Aon contact for further details - and stay tuned and stay safe.

Disclaimer: This document has been provided as an informational resource for Aon clients and business partners. It is intended to provide general guidance on potential exposures and is not intended to provide medical advice or address medical concerns or specific risk circumstances. Due to the dynamic nature of infectious diseases, Aon cannot be held liable for the guidance provided. We strongly encourage visitors to seek additional safety, medical and epidemiological information from credible sources, such as the Centers for Disease Control and Prevention and the World Health Organization. As regards insurance coverage questions, whether coverage applies or a policy will respond to any risk or circumstance is subject to the specific terms and conditions of the insurance policies and contracts at issue and underwriter determinations.

About the Author

Aon creates smart measurement solutions with valid and innovative online assessment products. Aon is globally the preferred partner for organisations who demand the best.

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