British companies must find a “new normal” that puts employee welfare at the forefront of the corporate ethos once the coronavirus lockdown is lifted, experts said yesterday.
A failure to do so will harm talent acquisition and retainment across sectors in the long-term, stifling financial recovery and future growth, it is claimed.
The current crisis is said to have exposed the “shameless, greed-orientated” character that underpins the majority of firms’ interactions with their workforce.
Despite business leaders making a “show and dance” of embracing employee-orientated leadership models in recent years, such as purposeful kindness or corporate compassion, these are often “thrown out of the window” when the going gets tough.
This is shown through “easy to fall on” measures such as the culling of staff or the suspension of workplace wellbeing and career development programmes.
Coronavirus has only underlined how companies tend to view their workforce as “disposable assets” rather than human beings, according to leadership and culture change management expert Yetunde Hofmann.
Pointing to the decision by companies such as British Airways to slash staff in the midst of the crisis, Hofmann says it shows a “fundamental disregard” for employees as anything more than ‘cash-cows’.
Hofmann, the managing director of international leadership and change consultancy Synchrony Development Consulting, believes that top-tier professionals will abandon employers who “fail to change their ways” for more ethical rivals when the government’s lockdown measures begin to ease.
The former Global HR Director for a FTSE 25 company said: “Many companies profess to care about their employees yet their actions, especially during times of financial crisis such as with the current coronavirus pandemic, show otherwise.
“When the going gets tough, the workforce—the professionals responsible for making a company profitable—are the first to be sacrificed.
“Ruthless staff culls are the norm, while important welfare programmes are treated as perks that can be rescinded without notice.
“The response to the coronavirus crisis in some quarters has made this only too clear, betraying a primary profit and acquisition-based motivation at the heart of many businesses.
“When the crisis is over, it is not enough to return to normal. Companies must find a new normal that puts an end to them treating their people as nothing more than cash-cows.
“Those that do will prosper in the new world we find ourselves in. Those, however, who fail to change their ways will lose respect and, with it, the top talent who can be selective in where to invest their skills and expertise.”
The coronavirus pandemic has crippled the British economy as millions of businesses have been forced to temporarily shut down or dramatically scale back their operations.
Non-key workers, meanwhile, have been asked to stay at home unless completely necessary.
In response, the British Government has promised billions of pounds of financial support to companies of all sizes including rolling out a job retention scheme enabling companies to furlough employees and receive a grant to cover 80 per cent of their salaries.
A paper published last month by think-tank the Resolution Foundation, however, predicts that up to 3.4million British workers could still lose their jobs up to the end of June because of virus-related cutbacks.
Firms such as British Airways – which announced at the end of April that 12,000 workers could face redundancy – have been heavily criticised in recent weeks for slashing their workforce during the crisis.
While it is too early to predict the full impact that the pandemic will have on businesses, UK economic forecasting group the EY Item Club has estimated that it will take until 2023 for the British economy to return to pre-virus levels.
But Hofmann, a Visiting Fellow at the University of Reading’s Henley Business School and a Board Trustee of the Institute of Business Ethics (IBE), thinks that the road to recovery will be much harder for companies that do not adjust their organisation’s direction after the lock-down ends.
She says that the virus has demonstrated to key stakeholders including employees and customers that many businesses operate on a ‘greed-based’ model that puts profits before people.
While this may have been largely allowed to fly under the radar before coronavirus, the crisis has created a new “spirit of solidarity” and recognition that every employee is a human being with a family to care for.
Hofmann, the author of new practical business guide ‘Beyond Engagement – The Value of Love-Based Leadership in Organisations’, says that both professionals and the public will turn away from companies that continue to disregard this.
The loss of customers and top-tier talent will hit businesses “where it hurts most”: the bottom line.
She said: “Much talk has been made of the coronavirus being the biggest societal challenge since World War Two, which in its aftermath changed our shared outlook and collective values.
“The virus will be no different and the spirit of solidarity, as well as the greater awareness of the extreme suffering it has caused to countless families, will not be forgotten.
“It is only by working together that we are coming through to the other side and this new-found appreciation for our workforce, key and non-key alike, will bring with it an insistence on treating employees as human beings, with their own needs above and beyond those of corporate targets and shareholder interests.
“Where, before, companies could often get a free pass for their actions towards employees outside of the trade unions, they will now find themselves scrutinised by the public in a way never seen before.
“The public will not want to do business with companies that prize greed above all else, while professionals will navigate towards those organisations that value them as individuals, not just as money-makers.
“Take away these two key stakeholders and any business will struggle to recover, however deep their reserves.”
Hofmann is the UK’s leading proponent of a new love-based leadership model that is based on the unconditional acceptance of all employees as human beings within a corporate environment, and the recognition of their value and contribution to a company, separate from their behaviour.
As her new book reveals, this radical love-based leadership model—which subsumes all previous compassion-based leadership styles—has been championed in one form or another by the likes of James Timpson OBE, the CEO of Timpson Group; John Mangan, L’Oreal’s managing director for the Luxury Division, UK and Ireland; and Tracey Killen, Director of Personnel at John Lewis Partnership.
While she recognises that it will be a “challenge” for wider businesses to accept this new tenet at the core of their corporate ethos, she says it is key to unlocking sustained high performance and renewed growth in a post-coronavirus market.
She added: “Love-based leadership is a relatively new concept within the UK but is a critical leadership capability that is key to unlocking employee potential and productivity, fostering stronger stakeholder relationships across the supply chain, ensuring quality, and delivering sustainable growth.
“Momentum for this new style of corporate leadership was already growing prior to the pandemic but post-coronavirus, it will become essential.
“Love-based leadership fundamentally changes the dynamics of leadership from transactional to relational, being directly opposed to the prevailing tendency to treat professionals as little more than a means to the end of improving a company’s financial bottom line and market growth.
“It may, initially, be something that leaders find difficult to accept as love-based leadership is not yet widely understood within the corporate sector and requires leaders to display vulnerability and authenticity, and companies to move for selfishness to selflessness.
“However, there is a wealth of evidence that shows that this new model bolsters the decision-making process and the bottom line.
“It is the solution to the long-standing and deepening corporate challenges of inconsistent employee engagement, declining employee emotional and mental wellbeing, and continued inequality.”