Changes in Latitudes, Changes in Attitudes, Nothing Remains Quite the Same: Impacts and Implications on Business Operations Due to Covid-19

March 2020 marked the beginning of forced changes to many aspects of our daily life, including the way most of us work. Eighteen months later, there are still increasing pressures on employers and employees related to the pandemic, including the number of workers quitting or changing jobs, remote work, increased virtual collaboration, digital transformation and more. To stay ahead, most businesses, law firms and in-house counsel departments have already or will need to transform their workforces to meet these demands. However, there is no one future of work and no single solution that fits every company or law firm. Remote and flexible working arrangements have been a necessity for the past 18 months and it is reasonable to conclude that some of these arrangements are here to stay. Five key trends that are expected to influence work beyond 2021 are:

Demographic Change
Increased Expectation of Flexibility – in Work Location and Work Time
Enhanced Support of Employees for Engagement and Retention
Increased Expectation of Employer/Organizational Social Responsibility
Expected Workforce Reductions and Closings

Changing Demographics of Workforce

There are several reasons we are seeing people leaving their jobs, but the most significant reason has been linked to the impact the year 2020 had on priorities, values, and decisions on how to spend time. One component of the drop in labor-force participation immediately after the beginning of the pandemic was a wave of earlier than planned retirements of Baby Boomers. The share of Americans not actively looking for work because of retirement increased by 7 percentage points between January and early April of 2020.

Because more women and people of color worked in the service industries that were hit harder by the pandemic, there was also a racial and gender disparity in jobs lost. In December 2020, the number of U.S. jobs held by women fell by 156,000, while the number of jobs held by men actually increased slightly (by 16,000). These pandemic-related shifts will only exacerbate the existing gender pay gap. Between 50-60% of the jobs eliminated after COVID-19 struck were held by women. More women also had to stay home and forgo working in order to care for kids whose schools were closed. More than 2.3 million women have left the U.S. labor force since February 2020. That is a level last seen in 1988.

USPS data shows that temporary change-of-address requests were up almost 27% from February to July 2020, with spikes in requests in March and April. [1] A June 2020 Pew Research Center study looked at almost 10,000 U.S. adults to understand COVID moving trends. About a quarter (28%) said they chose to move because they feared getting COVID-19 if they stayed where they were living. About a fifth (20%) said they wanted to be with their family, or their college campus closed (23%). A total of 18% gave financial reasons, including job loss. Roughly one in five of the survey participants responded that they packed up and left because of the pandemic. Another Pew Survey in November 2020, found that a third of U.S. adults who moved due to the pandemic cited financial problems as the most important reason they relocated (17% said job loss and 15% said financial problems other than job loss).

The Great Resignation

According to the U.S. Bureau of Labor Statistics, 4 million Americans quit their jobs in July 2021. Resignations peaked in April 2021 and have remained abnormally high for the last several months, with a record-breaking 10.9 million open jobs at the end of July 2021.[2] This phenomenon has been labeled “The Great Resignation”.[3] As of June 2021, the highest quit rates (which indicate voluntary turnover) are occurring in accommodation and food services (5.7%), leisure and hospitality (5.3%), and retail trade (4.1%). More than 740,000 people who quit in April 2021 worked in the leisure and hospitality industry, which includes jobs in hotels, bars and restaurants, theme parks and other entertainment venues.

An online survey conducted on August 13, 2021 revealed that 15% of the workforce is planning to quit their job between September and December 2021. The highest rate was among Millennials who acknowledged such plans at a 1 in 5 rate. The survey also indicated that 1 in 5 have not decided if they want to quit and that 40% of computer and IT employees are quitting between August and December 2021. Among workers who don’t plan on quitting, 58% would consider leaving it if offered better salary and benefits elsewhere and 19% of those not planning to leave their job will do so if they are required by their employer to get the COVID-19 vaccine.

Compare the above statistics with the latest PwC US Pulse Survey that found that 65% of employees are looking for a new job. Nearly nine in ten (88%) executives surveyed said their company is experiencing higher turnover than normal. For employees looking for new opportunities, schedule flexibility, expanded benefits and compensation are top incentives. The challenge ahead lies in addressing culture, as companies define their work environments.

An in-depth analysis of a global dataset derived from more than 9 million employee records from more than 4,000 companies in a wide variety of industries, functions, and levels of experience revealed two key trends:

Resignation rates are highest among mid-career employees between the ages of 30 and 45 years old, having the greatest increase in resignation rates, i.e., more than 20% between 2020 and 2021.

Resignations are highest in the tech and health care industries. Resignation rates were higher among employees who worked in fields that had experienced extreme increases in demand due to the pandemic, likely leading to increased workloads and burnout.

Approach to Improving Retention

The following three steps have been recommended as a method by which any employer can more effectively leverage data to improve employee retention[4]:

Quantify the problem by calculating your retention rate and determine the impact of resignations on key business metrics;

Identify the root causes; and,

Develop tailored retention programs.

This analysis can help you identify not just which employees have the highest risk of resigning, but also which of these employees can likely be retained with targeted interventions.

According to bonusly.com, recognition of employees is a key to retention. It reported that 63 percent of those in a recent survey who said they are regularly recognized also said they are very unlikely to look for a new job. Workers reported that they want organizations that understand that hybrid work requires management to communicate more, not less. They also want to work for companies they can be proud of, that are involved in their communities and that take a stand for things that they believe matter. According to a survey conducted by Microsoft, 41 percent of the global workforce is ready to quit, and 54 percent of those surveyed say they are overworked. Some of the key changes that the workforce is looking for are:

Flexibility
Remote work options
Increased salaries
Better benefits
Peer Coaching
Appreciation
Work-Life Balance
Diversity
Development
Growth
Social Awareness
Mentorships
Job Rotation
Teamwork

The August 19, 2021 PwC US Pulse Survey[5] reported the following responses of 752 business executives to the following question about their workforce location policy for Fall 2021:

Q: Which of the following statements best describes your workforce location policy that will be in effect this fall? (Select one.)

Mix of in-person, hybrid, and fully remote	33%
All in-person	19%
Mix of in-person, hybrid (no fully remote)	18%
All hybrid	18%
Teams self-organize	4%
All fully remote	4%
Delaying implementation	3%

Impact on Lawyers and Law Firms

These trends appear to be consistent for lawyers as well. Associate hiring decreased nearly 50% between 2019 and 2020, according to the NALP Foundation for Law Career Research & Education, based on its survey of 126 law firms. Fast-forward to 2021, and many firms are now scrambling to attract and retain associates. In contrast, the pandemic was a huge adjustment for attorneys who found themselves providing legal services while caring for young children, facilitating remote education for school-aged children, or both. A white paper, Pandemic Nation: Understanding its impact on lawyers from underrepresented communities [6] took a more in-depth look at the impact the pandemic has had on lawyers from underrepresented communities. It revealed that, during the pandemic, women in senior management, Black women, and working mothers (who perform the bulk of the childcare, remote learning, and domestic tasks) were the communities that experienced the biggest challenge.

Breaking down the pandemic’s challenges to law firms

Key findings of the Pandemic Nation white paper[7] include:

No in-person contact was cited as the biggest career progression barrier for lawyers. One year after the start of the pandemic, the biggest barrier to career progression for lawyers continued to be limited to no in-person contact.

Heavy workloads and not enough time to complete work was the second most common challenge cited by survey respondents. These challenges primarily stemmed from negative impacts on professional well-being. The most common negative impacts of the pandemic on personal experience have been increased stress levels (cited by 65% of respondents), as well as increased pressure on overall well-being (64%), work-life balance (57%), and time spent on self-care (48%). Also, a lack of mentorship opportunities (49%) was also cited by many respondents.

Actions by legal employers to address structural barriers are falling short. Legal employers were not investing enough in initiatives that would accelerate diversity at all levels. For example, the most effective solutions to address structural barriers reported by these diversity leaders at law firms were the use of formal sponsorship programs, increased representation on key committees, and an established 30% target of diverse candidates for consideration for any open roles within the firm; however, only 20% of law firms reported using these solutions.

As some experts predicted, many law firms backed off their return-to-office dates as a result of the resurgence of the pandemic over the summer with the highly contagious delta variant. What to do next, though, seems to vary from firm to firm. Some have hope for a return this year, while others are delaying until next year. A consulting firm tracking 89 law firms recently reported that, as of September 30, 2021, only 3 of the 89 firms have announced plans to return fully to the office.[8] The vast majority of firms will continue with hybrid schedules, with an expectation of 3 days in the office being the most common. A significant majority of firms are now requiring vaccines (or in a few cases, negative tests as an alternative) to be in the office.

Impact on Corporate Counsel

Three months into the pandemic, The Association of Corporate Counsel (ACC) published the results of a member flash poll related to the COVID-19 pandemic.[9] The poll found that 88.3 percent of in-house lawyers were working from home, while just under 10 percent have seen pay cuts, furloughs, or dismissals due to budget cuts. Of those working remotely, 53.4 percent are working longer hours than before. Between 40 and 50 percent of respondents reported feeling tired or low energy, experiencing anxiety, and trouble sleeping or concentrating as a result of the pandemic; 30.3 percent rated their level of burnout as “high” or “very high.” In addition, 39.5 percent expressed alarm or concern about racial disparity during the pandemic. Nevertheless, 83.3 percent of respondents rated their overall emotional state as “somewhat good,” “very good,” or “extremely good.” A similar number, 84.2 percent, expressed positive feelings for their work and company. Over half have attended a virtual cocktail party, and others reported attending online fitness classes, religious services, dinner parties, and meditation sessions as ways to relax and connect with others.

Work From Home/Work From Anywhere vs Return To Office vs Hybrid

WFH: Perhaps no COVID-19 phenomenon will have a more lasting impact than Work from Home (WFH). The pandemic drove companies worldwide to shut their offices on short notice. By June of 2020, 42% of the U.S. labor force, largely from the ranks of white-collar employees and professionals, were working from home or some other location of their choice.[10] Most remote employees say that when the pandemic finally ends, they will want the choice of where they work, with many preferring a flexible mix of office and home. According to a Survey of Working Arrangements and Attitudes (SWAA)[11] forty percent of respondents aged 20-64 worked from home in May 2020, while 26 percent worked on business premises and just over a third did not work. A December 2020 Pew Research Center survey revealed that most workers who say their job responsibilities can mainly be done from home say that, before the pandemic, they rarely or never teleworked.[12] Only one-in-five say they worked from home all or most of the time. Now, 71% of those workers are doing their job from home all or most of the time and more than half say, given a choice, they would want to keep working from home even after the pandemic. These are often employees with young kids who live in the suburbs and for whom the commute to work is painful. At the other extreme, a survey showed 21 percent said they never want to spend another day working from home. These are often young, single employees or empty nesters in city-center apartments.

The Becker Friedman Institute for Economics at the University of Chicago surveyed 10,000 employees about their perception of how productive they are at home. Most said they thought they were just as productive working from home compared to working in the office. In fact, 30% of those respondents told researchers they were more productive and engaged working from home. This same survey team calculated that commuting time was reduced by 62.4 million hours per day with aggregate time savings of over 9 billion hours starting from the middle of March 2020 to the middle of September 2020.

Studies show remote workers are working more. A team with Harvard Business School, using meeting and email metadata of roughly 3.1 million employees around the world, found the pandemic workday was, on average, 48.5 minutes longer. In a sample of its employees, Microsoft found they were more often working at night, through lunch, and over the weekends

Respondents in one survey who reported higher efficiency during WFH overwhelmingly cited commute time savings and (somewhat less so) a quiet environment at home as reasons. Other reasons cited for efficiency were fewer/shorter meetings, meals/chores/childcare efficiency, better internet, better equipment and less stress.

Of respondents reporting lower efficiency while WFH, half said it was because some of their job’s tasks cannot be done remotely. Other contributions to inefficiencies were no room to work in at home, interruptions by children at home, interruptions by adults at home, inadequate internet at home, and inadequate equipment at home.

Some additional significant survey findings are that:

Small meetings can work by video conference; large meetings are best in person.

Employees are hugely varied in how many days per week they want to WFH.

College-educated women and men with younger children differ in the number of days they want to WFH post-pandemic. All want at least one day, but women favored 5 days at a much greater percentage than men.

WFH Considerations

Not every business or position is suitable for a remote working arrangement. Thus, an initial analysis would examine the following:

Who can work remotely – and who wants to?

What jobs are truly remote-able?

How can you manage work-life balance – and prevent burnout?

What should the work environment look like?

How can you maintain purpose and engagement?

How can you manage vital issues like collaboration and performance?

Remote work has upended the who, what, when, where, why, and how of work, forcing organizations to ponder questions like these:

Who: Who can work remotely? Who wants to work remotely?

What: What jobs can truly be performed remotely?

When: How many hours is reasonable? How do you manage work-life balance? How do you avoid burnout?

Where: What should a workplace look like? Is the office built for collaboration? What are the requirements if you’re working from home?

Why: How do you maintain purpose and engagement in virtual spaces?

How: How do organizations define how they do work? How do we collaborate? How do we look at performance?

What does remote work look like?

The types of emergency remote work models that companies have adopted during the pandemic have been described as follows:[13]

Fluid hub and spoke: Talent is clustered in key locations, with some flexibility to go on and off site. Key challenge: Setting “rules of engagement” for who is onsite and offsite at any given time.

Periodic culture infusions: People generally work remotely but come together to socialize and share purpose. Key challenge: Making onsite time feel worthwhile.

Onsite at minimum: Only those workers who must be onsite are onsite. Key challenge: managing disparities between onsite and offsite populations.

Team-driven: Teams decide on their best onsite or remote collaboration model. Key challenge: giving teams guardrails to make sensible, inclusive decisions.

Remote-only: No real onsite presence; all collaboration is virtual. Key challenge: maintaining engagement, especially in the long run.

Hybrid: Employers have increasingly embraced post-COVID WFH. Since the start of 2021, employer plans for post-COVID WFH have increased by 18%, from 1.05 to 1.23 days per week. Some argue that working from home can make firms more productive and employees feel safer and happier. According to SWAA data, most workers welcome the option to work remotely one or more days per week. Respondents expressed a willingness to accept pay cuts of 7 percent, on average, for the option to work from home two or three days per week after the pandemic. While the preferred frequency of WFH varies greatly among individuals, desires to work from home part of the week are pervasive across groups defined by age, education, gender, earnings, and family circumstances.

It has been estimated that 70 percent of firms — from tiny companies to massive multinationals like Apple, Google, Citi and HSBC — plan to implement some form of hybrid working arrangements so their employees can divide their time between collaborating with colleagues on site and working from home. Hybrid arrangements can potentially balance the benefits of being in the office in person — greater ability to collaborate, innovate, and build culture — with the benefits of quiet and the lack of commuting that come from working from home. Firms may suggest employees work two days a week at home, focusing on individual tasks or small meetings, and three days a week in the office, for larger meetings, trainings, and social events.

A downside to hybrid arrangements is that they can create anxiety about it generating an office in-group and a home out-group and that it will impact promotions.[14] A study has shown that WFH employees had a 50 percent lower rate of promotion after 21 months compared with their office colleagues. A potential solution is that the WFH and in-office days be the same for a team of employees where those concerns may arise.

Concerns About WFH and Hybrid Plans

The August 19, 2021 PwC US Pulse Survey indicates that executives’ concern about hybrid work eroding corporate culture is their biggest challenge (36%).[15] Other reasons that may be holding companies back from expanding remote work options include loss of mentoring (30%), loss of innovation opportunities (26%), and potential equity issues between on-site and fully remote workers (25%). Many workers express anxiety about hybrid plans generating an office in-group and a home out-group.[16]

Another concern for companies according to a survey is that new working patterns may increase cyberattacks and data fraud.[17] The increase in working-from-home arrangements has expanded the use of potentially vulnerable services, such as virtual private networks (VPNs), that lack adequate safeguards, amplifying the threat to individuals and organizations. The risk of disruption to critical information infrastructure is enhanced by the vulnerability of services under strain from high demand, such as energy, financial services, and healthcare. Meanwhile, a blurring of the line separating corporate and personal systems heightens the risk of exposing sensitive information not appropriately secured and monitored on personal devices.

Choice vs Mandate

Although flexibility is vital, there can be pitfalls to allowing employees to choose rather than having consistent parameters mandated by the law firm or business. Allowing employees to choose their WFH schedules could exacerbate the lack of workplace diversity. For example, single young men or women could all choose to come into the office five days a week and rocket up the firm, while employees who live far from the office or have young children or other family responsibilities and choose to WFH most days are held back. This would be both a diversity loss and a create potential legal exposure for employers. In addition, it can create an atmosphere of suspicion, jealousy, and mistrust.

Workspace Needs and Design Considerations as Employees Return

As offices have reopened for even partial in-person work, many are finding that they need a drastic redesign, with touchless elevators and distanced pods.

Videoconferencing-friendly meeting and recording spaces

Hybrid offices and optional attendance

Relaxing workspaces that offer home comforts

Minimalist design and decreasing clutter

Flexible workspaces

Policies on Vaccinations

The U.S. Food and Drug Administration fully approved the Pfizer-BioNTech COVID-19 vaccine on Aug. 23, 2021 which public health experts said might make it easier for employers to mandate the shot. Pursuant to Executive Orders announced on September 9, 2021, Department of Labor’s Occupational Safety and Health Administration (OSHA) is developing an emergency temporary standard directed at private-sector businesses with 100 or more employees that is estimated to impact over 80 million workers.[18] The employers will also have to give workers paid time off to get vaccinated or recover from any side effects of getting vaccinated. Employers that don’t comply with the vaccine mandate or paid-time-off requirement can face fines of up to $14,000 per violation. The rule will be issued in the coming weeks.

Research from the Society for Human Resource Management (SHRM) found that 28 percent of employed Americans say they won’t get the COVID-19 vaccine even if it costs them their job.[19] The Equal Employment Opportunity Commission (EEOC) has weighed in with guidance that answers some workplace vaccination questions. For example, the agency said that federal anti-discrimination laws don’t prohibit employers from requiring all employees who physically enter the workplace to be vaccinated for COVID-19. Employers that encourage or require vaccinations, however, must comply with the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964 and other workplace laws, according to the EEOC. Consequently, labor and employment counsel have cautioned private-sector employers to seek legal advice and be sure to craft a mandatory vaccine policy that provides for exemptions for people with qualified disabilities, as defined under the Americans with Disabilities Act, and for people with sincerely held religious beliefs, as defined under Title VII of The Civil Rights Act.

In announcing that they would challenge the expected Federal vaccine mandates, 24 Attorneys General faulted the administration for not taking into account natural immunity.[20] Israeli researchers shows natural immunity to be more protective than vaccine immunity whereas findings from a U.S. Centers for Disease Control and Prevention (CDC) study suggest that full vaccination provides additional protection to those who have had COVID-19. It has been suggested that making exceptions for those with natural immunity is risky because it would be impossible for employers to be able to say with any accuracy which of their employees maintain sufficient protective antibodies from a prior infection to prevent them from getting or transmitting the disease.[21]

According to news reports and surveys of law firms, the vast majority of law firm managers will be requiring COVID-19 vaccinations as a condition of returning to firm offices.[22] A survey (registration required for access) conducted by The American Lawyer found that large law firms are almost uniformly requiring lawyers and support personnel to be fully vaccinated prior to returning to office premises. Employers who require employees to be vaccinated have been encouraged not to distinguish between those who were previously infected and those who were not with regard to the vaccination protocol. It would be difficult to always know whether an employee had COVID-19, particularly if that person’s infection occurred before testing was available and was identified solely based on the presence of antibodies or self-reported symptoms.[23]

As a practical matter, mandates by clients and courts may determine the policies for law firms. Some federal courts are already adopting rules that either require or encourage lawyers to get the COVID-19 vaccination. For example, the U.S. Court of Appeals for the Eleventh Circuit (covering Alabama, Florida and Georgia requires all court personnel and visitors to attest that they are fully vaccinated against COVID-19 or to provide evidence of a negative COVID-19 test within three days of entering the courthouse. Similarly, the U.S. Court of Appeals for the Tenth Circuit recently restricted access to its Denver courthouse to persons who are not fully vaccinated against COVID-19.[24]

RESOURCES and REFERENCES

[1] See Reference #29

[2] See Reference #21

[3] See References #21-27

[4] See Reference #21

[5] See Reference #2

[6] See Reference #8

[7] See Reference #8

[8] See Reference #11

[9] See Reference #9

[10] See Reference #14

[11] See Reference #1

[12] See Reference #3

[13] See Reference #10

[14] See Reference #15

[15] See Reference #2

[16] See Reference #15

[17] See References #30-32

[18] See Reference #17

[19] See Reference #17

[20] See Reference #20

[21] See Reference #20

[22] See Reference #11

[23] See Reference #20

[24] See Reference #28

FOR MORE INFORMATION:

Allen Sydnor
[email protected]

Monica R. Garcia
[email protected]