Executive Summary

The Conference Board conducted its first survey tracking human capital (HC) responses to COVID-19 in April 2020 during the early stages of the pandemic in the United States. We published “From Immediate Responses to Planning for the Reimagined Workplace: Human Capital Responses to COVID-19”in May. By the summer of 2020, we realized that the pandemic was not going to be a short-lived crisis and conducted a follow-up survey in September, “Adapting to the Reimagined Workplace: Human Capital Responses to COVID-19,” that was published in October.

To continue our research on the long-term impacts of the pandemic on both the workforce and the workplace, we repeated the online survey in April 2021 with 231 HC executives who represent large companies, for the most part. The accompanying chart book shares the survey findings.

The results of the April 2021 survey suggest that human capital professionals are facing four main challenges in the months ahead:

1. Adjusting to a world where a large share of employees primarily work remotely;
2. Recruiting qualified workers and retaining existing workers, especially in organizations employing primarily industry and manual services workers;
3. Addressing deteriorating employee well-being; and
4. Managing the return to the workplace.

Insights for What’s Ahead

Remote work may be the most significant organizational legacy of COVID-19. Our April 2021 survey found that almost 40 percent of organizations expect that a significant portion of their employees, 40 percent or more, will work primarily remotely one year after COVID-19 subsides. In contrast, almost three-quarters of surveyed organizations had fewer than 10 percent primarily remote workers before the pandemic. The results from the April 2021 survey make the prediction of a large shift to remote work much more certain, as many companies see the postpandemic world more clearly than they did in our earlier surveys.

A perception of strong worker performance during the pandemic made many employers willing to shift to more remote work in the future. Sixty percent of surveyed HR leaders self-report thatproductivity has increased on average in their organization over the last year. The percentage of HR leaders who believe productivity has increased has more than doubled over the past year (59 percent in April 2021 compared to 23 percent in April 2020). A word of caution here: simply because employees who were often confined to their homes during the pandemic worked longer hours in crisis mode, which may have resulted in perceived higher productivity, does not mean that increased productivity should be viewed in solely a positive light. This level of performance is likely unsustainable, and the impact on worker well-being has yet to be fully realized. In addition, it is hard to gauge which changes in perceived productivity are attributable to the impact of working from home and which are attributable to the impact of operating in an economic crisis, when the sense of urgency around completing tasks is elevated.

However, the perceived increase in productivity appears to have come at a significant cost to employee well-being, despite organizations’ efforts to provide support. Employee well-being has not fared well since the outbreak of the pandemic (e.g., increasing number of employees who are burned out or have sought mental health support, decreasing work-life balance). Deteriorated levels of employee well-being are likely related to increased anxiety and stress resulting from multiple factors (e.g., the global health crisis, the economic crisis, political and racial unrest, the lack of childcare, and/or longer working hours). As some of these situations are resolved or stabilized, organizations will need to continuously monitor their employee well-being because some of the new ways of working (e.g., longer hours, increased use of technology, remote working) may not be sustainable. Surveying employees may help to detect deterioration in the level of employee well-being. Our survey results suggest that organizations that survey their employees about these topics are more likely to report that work-life balance has deteriorated and that the number of employees who say they are burned out has increased since the outbreak of the pandemic than those organizations that do not practice continuous listening.

Both recruitment and retention of qualified workers are becoming very challenging, especially for organizations that hire primarily industry and manual services employees. Despite a significantly higher willingness to hire remote workers than a year ago, 80 percent of organizations with mostly industry and manual services workers say it is very or somewhat difficult to find qualified industry and manual services workers versus 60 percent of organizations with mostly professional and office workers. Similarly, among employers of mostly industry and manual services workers, 49 percent of respondents say they find it very or somewhat difficult to retain workers versus 28 percent of employers of mostly professional and office workers. These findings are consistent with other labor market measures that indicate historic labor shortages in the US because of a rapid reopening of the economy and a huge increase in the demand for workers—especially for in-person services, where working was restricted due to the pandemic—coupled with pandemic-related labor supply constraints. One potential strategy to ease hiring difficulties in office-related jobs is to expand into new pools of labor by hiring full-time remote workers who live farther away from the office. Fifty-five percent of organizations say they are now willing to hire full-time remote workers if those workers can occasionally commute into the office; a quarter of survey participants are willing to hire full-time remote workers anywhere in the US, while 7 percent are even willing to do this globally.

More than 70 percent of surveyed organizations are planning to reopen the workplace in the next six months (May to October 2021). Many US organizations are beginning to see a light at the end of the very long COVID-19 tunnel. As such, 72 percent of organizations are planning to reopen in the next six months for their employees who have been remote (22 percent between May and July 2021; 50 percent between August and October 2021), while 10 percent have already returned or never closed. Returning to the office will not happen at the same capacity as before the pandemic, our survey results on remote work suggest, and some employers are letting workers return on a voluntary basis.