The Coronavirus and Business: How Do You Want to be Remembered?”
The economic crisis brought on by COVID-19, unlike the financial crisis of 2008, is not in any way the fault of business. As we look back at 2020 from the future, however, it is clear that the behaviors of business during the pandemic will make companies heroes or villains.
Four international employee relations experts—Tom Hayes, Auret van Heerden, Rick Warters and I—got together to talk about business and the coronavirus. We talk about it here.
There will be little middle ground.
Governments have stepped in with two main policy objectives. First, to save lives (public health). Second, to maintain social peace and stability (public welfare). Third on their list is business and the economy. In varying degrees, governments have worked to assure safe working conditions for “essential” workers, to keep non-essential workers off the streets, and maintain a living income to families.
They figure that if they can keep priorities one and two together for 100 days – or two quarters – then the future for business and the economy will be better and deliver the "V shaped recession" we hope for.
Governments are taking control of the affairs of business in ways that they have not done since World War II. Today, they’re focused on the now: flattening the curve, ensuring public health needs are met, and getting cash into peoples’ hands. They have yet to turn their full attention to the business-side restart that comes when society reopens. Whether they step back and let “business get on with the business of business” or see business as operating solely in its own interest, the behavior of companies today will likely shape the regulatory environment on the back-end of this pandemic and long into the future.
We are not suggesting a sharp left turn. We are working to avoid one.
Companies can shift their non-essential workers into essential work to cover for increased demand and high absenteeism. They can divert production in their own companies and in their supply chain to delivering the materials care workers need. They can reinforce networks of employees to support communities, offer training to staff at home, and build up support networks for employees under stress at work and at home.
Or they can lay off workers, cut contracts with gig workers and sub-contractors, cancel orders in their national and international supply chain, delay giving loans to the self-employed, delay payments to those suppliers who have already completed work in order to preserve cash flow, and be incommunicative toward their current or recently or soon to be ex-employees.
The implications of business decisions today are already increasing the volume of labor’s claims. Global unions decry the uneven spread of the disease as evidence of a failure to address inequality. They cite the lack of effective supply chain due diligence as Bangladesh garment workers go unpaid because U.S. brands renege on purchase agreements. In the U.S., unions call for greater worker participation in the workplace, citing insufficient precautionary measures and PPE in essential workplaces. Demands for universal health care coverage and paid time off spike in response to the pandemic. And everyone points to the Business Roundtable’s 2019 proclamation that corporate responsibility extends beyond the shareowner.
This is not about theory. It is about real choices. The returns on these choices will be incalculable. They won’t bring consumers or investors to your doorstep today, but they should help influence your company reputation and the regulatory regime that secures your ability to compete tomorrow.
Heroes will step forward to protect all stakeholders for the tomorrow. Villains will step back just to protect today’s bottom line.
The news is full of novel entrepreneurial solutions: schools using 3D printers to make face shields, runway designers making hospital gowns, local charities organizing teams to deliver food, Formula 1 teams making ventilators. What they lack. What we need most is what big companies have: scale.
There are already great examples. Let’s see more and let companies “show and tell” what they are doing to support all their stakeholders.
TEN BIG AND SMALL THINGS COMPANIES CAN DO—TODAY:
- Value responsibility: Convince Wall Street and the London Stock Exchange that socially responsible actions that benefit all stakeholders today are investments for a successful future.
- Bet on people: If you’re in banking, consider loans to keep entrepreneurs and temporarily idled employees loans to keep them afloat. If you would have considered them for a mortgage before the crisis, consider them for a much smaller bridge loan today.
- Leverage resources for jobs: Use every cent of government money available to keep workers on contract and ready to get back to work. Even if that means lower pay for job security.
- Watch out for the little guy: Pay your bills to smaller suppliers and sub-contractors faster than the 60 or 90 days you promised where you can. It will keep them afloat.
- Deliver the goods: Re-purpose your capital and workforce, and that of your supply chain, to contribute to shortages of essential goods and serving communities. The return to work will be phased—retail staff will be needed faster than those in tourism. Get together with other employers in your geography to get those people who are not needed yet into places where they are needed and can earn a wage today.
- Stay close: Maintain contact with your workers and offer services that support them beyond information—and in the areas of finance and health and well-being. Get your managers to talk to every one of their subordinates every week and be ready to answer their questions. Take the opportunity to listen and respond.
- Show them you mean it: Provision, support, and model safe working conditions for those people who are keeping their countries running. Keep people safe at work. Don’t get complacent and consider rewarding those who have gone over and above—not because they’re “essential,” but because they’re exceptional.
- Start at the top: Where you have to cut costs start from the top down and limit the impact on those least able to afford it.
- Train, train, train: Use time today to train for new skills tomorrow.
- Get ready to run: Have a fast start plan. If we learned anything from China it is that restarting work in a safe manner is not easy. In the U.S. and Europe people will want to be sure they are safe. In India all those day laborers will have to trust you to come back into the cities.
We are in the middle of a global health crisis. We cannot afford to let our companies’ response create a further crisis of confidence in our economic institutions. The decisions we take today are an investment in building trust and confidence. The choices we make must reflect our commitment to our employees, our suppliers, and the communities where they work and live.
Villains cut and run. Heroes inspire. We’re all in this together.
This blog was authored with the help of BEERG Executive Director Tom Hayes, former United Technologies Vice President of Employee & Labor Relations Rick Warters, and workers' rights advocate Auret van Heerden.