Three Board-Level COVID-19 Issues That Affect Supply Chain Organizations

By Dana Stiffler | March 02, 2021 | 0 Comments

Supply ChainPower of the Profession

This supply chain analyst and her canine coworker may not know it, but their post-COVID professional future is the subject of some serious board-level discussions.

With the arrival of vaccines, leaders are making decisions that affect the future of their enterprises, and where and how people work. Three recent snapshots in particular from Gartner’s legal, compliance and risk management research and advisory team stood out: vaccination strategies, the future of the workforce and the corporate real estate footprint. We share a summarized excerpt of that group’s findings and advice with the supply chain community for two reasons:

  1. Supply chain and operations leaders may not always have a seat at the table where these decisions are being made.
  2. Based on recent conversations with supply chain leaders, views on timeframes and return to workplace strategies may not be in alignment with other corporate leaders.

Issue 1: How Should We Handle Vaccinations For Our Employees (and When Can They Come Back to the Office)?

While executives remain optimistic about their ability to return to normal operations in the second half of this year, a growing and sizable percentage (43%) now believe this won’t happen until 2022 at the earliest. One crucial input is the availability and acceptance of vaccinations for employees, and as such, organizations are evaluating whether to require immunizations for all (or some) of the workforce. Only 8% plan to do so, instead choosing to encourage (and even facilitate) vaccine adoption. This includes directing employees to trusted and reliable information resources, creating communications campaigns to address employee concerns, or even offering financial incentives and paid time off for taking the vaccine (see Figure 1).

Executives and boards should take into account these considerations:

  • Not all employees want to take the vaccine — Assess, among other things, employee attitudes toward mandatory vaccinations before deciding which actions to take, and adjust your strategy accordingly. As of January, 9% of U.S. consumers responding to our survey reported that they were unwilling to take a COVID-19 vaccine and an additional 18% were uncertain about whether they would take it.* A further examination of these numbers uncovered deep philosophical and political beliefs which may make it difficult to persuade all employees to get vaccinated with encouragement alone.
  • Communication is critical, especially in the absence of certainty — Given high levels of misinformation, skepticism and anxiety about vaccinations, companies must take the lead in bridging the trust gap between employees and employers. At a minimum, any communications strategy must provide clear, consistent and reliable information regarding vaccines. Also make sure that messaging to the workforce, customers and investors is consistent with your stated company values.
  • Mandatory vaccination strategies can create risks, but they can also create opportunities — While many organizations are rightly focused on the risks of mandatory vaccinations, requirements for some industries (e.g., retail, food, leisure, transportation), may provide customers with a sense of safety, conferring a competitive advantage.

Issue 2: How Do We Redesign Our Workforce Strategy in a Post COVID-19 World?

Before the disruption caused by COVID-19, about 30% of the U.S. workforce worked from home at least some of the time. That number more than doubled when the pandemic hit, as organizations overnight enabled every employee they could to work remotely, in an effort to stay productive.

What will the future look like? Executives and their boards must not only decide under what conditions employees should come back to offices, but also how to meet the needs of a permanently changed workforce. How an organization treats its people could have a significant impact on the ability to attract (and retain) top-level talent in the future.

In fact, 90% of organizations plan to allow employees to work remotely some of the time. Boards must consider the implications of the “hybrid” work model and also assess whether IT infrastructure, HR and compliance policies, and internal communication strategies support a more flexible workforce (see Figure 2).

The stark reality is that virtualizing existing practices alone will not increase productivity and engagement. Re-creating the old world of doing business only increases employees’ fatigue as they deal with digital and personal distractions, an increasing number of meetings and no clear working “hours.”

For workforce strategy conversations, senior executives and their boards should consider the following:

  • Labor is decentralizing — As “work from home” begins to morph into “work from anywhere,” labor markets (and accompanying costs) will become more fluid. Use those assumptions to address future skills and competencies of remote employees, lower costs throughout your organization and build resilience into the talent planning process.
  • The employee value proposition needs an overhaul — The traditional employment deal (where employees gave organizations productivity in exchange for compensation and benefits) was drastically altered thanks to COVID-19. The traditional “9-to-5,” on-site work paradigm cracked, creating a need for organizations to identify and rethink their commitment to employees who have endured professional and personal upheaval. Progressive companies are building flexibility into work, creating shared purpose that requires organizations to lean into social and cultural issues, and forging deeper connections not only with employees, but with their immediate families and wider communities.

Issue 3: What Should Our Future Corporate Footprint Look Like?

Nearly three-quarters (72%) of CFOs told us they anticipate a smaller corporate real estate footprint in the next two years. While many take a “wait and see” stance to real estate decisions, as many as 35% tell us they are making immediate cuts to office space as they review the timeline for reopening and the long-term purpose of corporate real estate.

But the impact of COVID-19 is more than just the size of an organization’s real estate footprint. This much is clear: the office will shift from the place employees go to do their work, to the place where they go to have a variety of distinct experiences. This will include face-to-face interactions, access to location-specific technology and group collaboration sessions. Getting to the right answer for the talent your organization seeks, and customizing the design to maximize use, may save money while also creating a comparative advantage in recruitment and retention.
Specifically, executives and their boards should consider the following:

  • Social distancing will continue — Vaccines notwithstanding, workplace design will still need to incorporate protective measures, at least over the next 12 to 18 months. In fact, 86% of HR leaders plan to continue mandating face masks in the workplace, and 89% will enforce safe spacing in high-traffic areas.
  • Reconsider the function and purpose of offices — Given the likelihood of a permanent hybrid workforce, think bigger than the number of offices, desks and chairs. Consider designing office space that includes remote employees and physically present employees alike. Build areas that let both groups work together, places for innovative experiences and quiet spots for immersive work that allow an employee to focus on tasks.
  • A distributed workforce may create different resilience risks — Although a dispersed workforce provides backup capabilities, it can be catastrophic during a regional disruption. Without an alternative to their homes, many employees may not be able to work during local disasters (e.g., hurricanes, earthquakes).

Dana Stiffler
Research Vice President
Gartner Supply Chain

*Gartner Consumer Community: Gartner Consumer Community, 5-12 January n=248. While Gartner Consumer Community (n = 450) members resemble the U.S. general population, the data presented above is based on the responses of community members who chose to take each individual activity (n=248). Respondent samples for individual activities may not be representative of the general population and the data should only be used for directional insights.

Excerpted from Gartner research by Brian K. Lee and team

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