key: cord-0834065-zicxk49g authors: Howe, David C.; Chauhan, Rahul S.; Soderberg, Andrew T.; Buckley, M. Ronald title: Paradigm shifts caused by the COVID-19 pandemic date: 2020-11-07 journal: Organ Dyn DOI: 10.1016/j.orgdyn.2020.100804 sha: 51783e54aaaefdce627b9c45f7080841a5479013 doc_id: 834065 cord_uid: zicxk49g The COVID-19 pandemic has altered the business world in historic proportions. Whereas the short-term effects have been felt by many, the long-term effects of the pandemic will likely create paradigm shifts of unknown impact. The novelty of this situation has had drastic and potentially lasting organizational effects. We use existing research to explore and presage the effects of these paradigm shifts across multiple domains including: job security, financial consequences, remote work, worker wellbeing, and career attitudes. By exploring the implications in each area of business, the hope is that researchers and practitioners can better prepare for a post-pandemic future. organizations that society, in general, has yet to fully anticipate. The spectrum of shifts range from personal to professional, individual to organizational, and across most industries. The world is at its most interdependent economically and has never faced this level of comprehensive interruption. Whereas the short-term effects have been felt and recognized by many, resulting paradigm shifts caused by the pandemic will likely have long-term effects of unknown scope and impact. Many are adjusting to novel organizational demands of the pandemic while hoping for a swift "return to normal." In time, the implications of these demands may not only shift but have a lasting effect on the way organizations and employees function, resulting in a "new normal." We use existing research and examples to explore and predict the potential long-term effects of COVID-19 across multiple domains including: job security, financial consequences, remote work, worker well-being, and career attitudes. Each of these areas has been affected drastically. For each domain, after a brief overview, we examine the paradigm shift caused by the pandemic. We then explore the long-term implications of those paradigm shifts that have only begun to unfold. Finally, we offer relevant organizational considerations and practical actions for practitioners to more effectively adapt to each pandemic-related paradigm shift. The hope is that, by exploring the short-and long-term implications of these paradigm shifts, practitioners can better prepare in for an unknown post-pandemic future. Prior to the pandemic, many employment indicators were at all-time highs including workers' hours increasing and unemployment reaching historical lows. When the pandemic resulted in many government-mandated stay-at-home orders, workers were forced into unemployment in record numbers, particularly in industries where telecommuting was not J o u r n a l P r e -p r o o f viable. Whereas these unemployment figures are significantly down from the initial spike of pandemic-related unemployment claims, unemployment claims are still over double the prepandemic figures. Initially, most individuals and organizations seemed to maintain a generally positive outlook on the situation. The need to rely on unemployment was serving its purpose as temporary assistance that would soon become unnecessary once the pandemic reached its peak and allowed workers to return to the status quo. However, even with most stay-at-home orders expiring around the country, the pandemic continued to the delay many individuals' ability to return to work. Whereas some industries have begun to rebound, rather than a simple a return to the status quo, the recovery will be driven more by consumer behavior and demand than by a simple desire to return to normalcy. Indeed, many industries such as travel, entertainment, and restaurants continue to suffer as the pandemic draws on. Organizations such as Disney and major U.S. Airlines have announced layoffs of nearly 30,000 employees each. Individuals and organizations are being forced to recognize that things like temporary unemployment assistance cannot substitute for industries where employment depends upon people's willingness to closely cluster with others or travel. These entertainment, sports, concert, airline and restaurant industries and others are being forced to relearn how to be profitable in this new environment. In operations, there is a phenomenon called the bullwhip effect. It states that minor disturbances in a supply chain can result in wild fluctuations in supply and satisfying demand. In the case of the pandemic, some entire supply chains where shut down for months and many J o u r n a l P r e -p r o o f continue to suffer significant negative effects. As organizations resume operations at varying depths and speeds, demand is unlikely simply to resume at pre-pandemic levels. This lack of demand is going to create radical shifts in supply throughout supply chains, which will also have significant consequences for if, when, and which jobs will return, and which jobs may never come back. Whereas workers are anticipating a post-pandemic return to "business as usual," many organizations find themselves having to ask some difficult questions. • Does the organization have the capacity to maintain or re-hire the same quantity of individuals employed before the pandemic? • Will the organization be able to provide workers the same amount of work and job security as before the pandemic? • How will the organization help alleviate employees' job security concerns and retain those whom the organization can continue to employ? There are many ways companies can answer these questions with a variety of implications. Some organizations may decide to use the pandemic as an opportunity to create leaner organizations. In some industries such as healthcare, lean management has helped companies deal with unexpected and urgent changes without having to put debilitating and unnecessary strain on their employees. Indeed, facing the prospect of losing their jobs, many employees have become much more willing to adapt to changes and deal with difficult circumstances despite the additional physical and psychological stress this might bring. In other instances, going lean may involve deciding to not hire back their entire workforce. Although this may have some short-term benefits, some research suggests that organizations should avoid this tendency and instead go the other direction by investing in their people and in creating strong employee-focused cultures. Some companies, such as PepsiCo, that have gone this direction have done so in an effort to recognize and support their employees that are going through difficult times. Particularly during a pandemic, these kinds of actions can have dramatic effects on helping employees feel safe and secure while also building loyalty to the organization, resulting in more dedicated and committed employees. Creating this environment often requires organizations to learn to respect, listen to, and trust their employees, but in the midst of uncertainty, a company that does these things and creates this kind of loyal and committed workforce will be much more able to weather these constantly changing environments, even if some temporary pain such as furloughs or reductions are necessary. Before the pandemic, most Americans' financial situations were generally improving, and low unemployment was leading to slowly increasing wages. Additionally, with lower unemployment, an increasing number of Americans could afford to change jobs or request promotions/raises due to a tight labor market. Even though the economy was relatively strong, very few individuals or organizations were financially prepared for an event of this magnitude. In general, Americans maintain high levels of consumer debt and few have the recommended level of emergency reserves. To prevent massive financial carnage, the U.S. Government provided stimulus money to most Americans, provided easier access to funds through financial institutions, and supported businesses through the CARES act. Each of these J o u r n a l P r e -p r o o f actions was designed to be a short-term stopgap until the economy resumed in force. However, as the economy continues to have a slow recovery, people have begun saving at record rates and are beginning to dramatically adjust the way they think about and use their money. The financial ramifications may be both wide-and far-reaching. At the individual-level, stimulus funds were meant for the express purpose of its namesaketo stimulate the economy through an infusion of money. However, with much of the economy shuttered due to stay-athome orders, in many ways the pandemic itself prevented the stimulus funds from being used to achieve their intended purpose. The stimulus funds were valuable to many in covering basic living costs, but it is difficult to stimulate an economy that is largely halted. This is similar to trying to turn up the volume on a television that is turned off. No matter how much you press the buttons that normally make the volume louder, without power to the television the volume will not change. Until organizations are fully operational, stimulus funds serve as more of an emergency fund and less as a true economic stimulus. At the organizational-level, the revenue lost during the pandemic can never be recouped, but the costs associated with overhead will still be due for many. Even with additional funds available, most organizations will still find themselves in greater debt that will continue to cut into profitability post-pandemic for both general and specialized industries. Restaurants have been particularly harmed by these consumer behaviors as Americans have been spending more money per visit to the grocery store but spending less on eating out. Even though organizations have begun to reopen their doors, many consumers remain hesitant to resume their pre-pandemic consumer spending habits and behaviors. Think about movie theaters, airlines, and theme parks. These are extreme examples, but each of these industries have been previously lauded for their ability to maximize the throughput of people in a minimal amount of space. As the pandemic continues, there are important questions for all companies-not just those in these specific industries-to ask themselves. • What will happen if the organization resumes operations at pre-pandemic levels, but consumers do not return to pre-pandemic spending behaviors? • How long the organization wait for things to return to "normal" before making serious and permanent operational changes? • If consumer behaviors are permanently changed, what actions must be taken to become profitable again? In many industries, even though they might have finally reopened, many organizations will be operating at reduced or even negative margins for the foreseeable future unless dramatic changes are made. From a financial perspective, the pandemic has amplified the need for many organizations to decrease their financial fragility by increasing their amount of cash on hand. While this may mean having to decide to limit growth for a time, increasing financial stability has been shown to positively affect an organization's confidence and optimism in its ability to survive during difficult circumstances. The longer the pandemic continues, preserving these cash flows will continue to become even more crucial to the ability of the organization to be profitable and survive. The more forecasts suggest that liquidity is likely to become a greater concern, the more important and urgent it will be to seek for additional sources of capital. Recognizing that the post-pandemic reality will be permanently different from the pre-pandemic normal, organizations should not wait to take action. Whereas companies may not achieve profitability in the same ways as before, recognizing this paradigm shift as one that is not simply going to revert back will enable organizations to make informed financial decisions looking forward rather than backward. It is also important for organizations to recognize and pay attention to new consumer trends, such as the increasing rate of saving, and greater selectivity in consumer spending habits. Changing consumer behaviors are likely to necessitate updating existing contingency plans and/or developing new ones to help identify swift actions that could be taken to protect the financial integrity of the organization and its ability to become and continue operating profitably. Advances in technology have drastically shifted the viability of remote working options. These advances have led to increased potential flexibility in how and where individuals perform their work. This flexibility has enabled talented individuals across the globe to collaborate in a manner that becomes increasingly seamless as technologies continue to evolve (e.g. web cams, hosting software, and faster and more reliable internet connections). Despite advancing technology, many sectors of the American workforce have been slow to adopt remote work. As the reality of COVID-19 set in, remote work quickly went from the exception to the norm for any organization that could reasonably make that transition. With organizations attempting to adapt to the myriad of restrictions on how their organizations can and should operate during the pandemic, virtual work has become a necessity for the organizational survival of many businesses. For many companies that already employed some level remote work options, the rapid transition overloaded their current technological capacities resulting in system crashes and inconsistent access to required organizational resources for remote employees. One large engineering firm located in the southwest U.S. went from maximums of 10,000 simultaneous active remote employees to over 60,000 simultaneous active remote employees in a one week period. This organization and many others were sent scrambling to expand and refine the necessary technological infrastructure to support the onslaught of new remote workers. In cases where remote work was not initially employed, in addition to establishing the technological infrastructure, one significant hurdle to remote work was a general suspicion or fear of being able to work effectively in a virtual format. In order to reduce these concerns, organizations were forced to develop or refine training regarding specific technology utilized, how to use it effectively and intuitively, availability schedules, expected work hours and performance, and troubleshooting or support resources. As employees become accustomed to these changes, many seemingly insurmountable obstacles (i.e. navigating work with children at home) have been "surmounted" and in many cases found working from home to be both viable and manageable. Organizations should focus on the following questions with regard to remote work: J o u r n a l P r e -p r o o f • How viable is remote work compared to working onsite? • How long will the organization be willing to encourage remote work? • How can the effectiveness of virtual teams be facilitated and enhanced? From an organizational perspective, overhead could be decreased by permanently migrating non-essential personnel to remote work where feasible. The cost savings of transitioning to virtual work may reduce the costs of office space, utilities, and other expenses could lead to significant savings for organizations. One of the most volatile decisions that an organization can overlook after the pandemic is a mindset that aggressively attempts to revert all work activities "back to normal" as they were conducted prior to the pandemic. Such a mindset, without appropriate justification, is likely to have a negative impact on the perceptions and morale of proponents for virtual work, resulting in detrimental outcomes such as reduced performance and even turnover. To this end, numerous technology companies in Silicon Valley have chosen to permanently embrace a new "normal" and have begun actively encouraging and supporting permanent remote work policies. Employees benefit from the flexibility to leave areas with exorbitantly high cost of living and these companies are able to reduce the pay of these employees if they choose to move to areas of the country with lower cost of living. From an employee perspective, commutes constitute a significant and growing amount of daily time expenditure for the majority of the American workforce. Car and public transit commuters spend a daily average of 48.6 and 47.6 minutes commuting respectively. Given that over one-third of the American workforce switched to working remotely, many workers may become newly sensitized to the lesser time demands of commuting as they become accustomed to remote work. The implications of this sensitization could range from looking for closer J o u r n a l P r e -p r o o f employment, moving closer to their employment, or even a preference for continuing full-time telecommuting. Regarding the work itself, if employees find this virtual format to be equally or more efficient than traditional local formats, then it is reasonable to assume that many of these employees may wish to retain and expand upon these remote practices after the pandemic. Although managing a remote worker will require managers to alter certain managerial practices, these past months spent managing telecommuters should provide a blueprint for both the more and less effective managerial practices. Salient leadership, functioning and high fidelity technology, trust, and successful communication are integral to the successful functioning of virtual teams. Therefore, organizations are highly encouraged to ensure that each of these elements are present to as much of an extent possible, and to communicate accordingly. Most U.S. jobs allow employees to insulate their work and personal lives to some degree. With some exceptions, there is a boundary between an employee's work and their personal expectations. Most organizations realize there are a variety of both work and personal factors that cause people to experience stress, and are thus reticent to dictate or impinge upon the specifics of how individuals manage this delicate work-nonwork interface. Although organizations can and often do ask for more and/or different work hours, many also strive to provide support systems for their employees to help alleviate at least some of the stress and give them opportunities to improve their overall well-being. Organizations mostly do not/should not dictate personal behaviors and choices that do not directly affect the organization, but efforts they do make to help improve employees' overall morale and well-being ultimately help the J o u r n a l P r e -p r o o f employees to feel better and be more productive. This, in turn, often indirectly helps to improve performance and productivity of the organization as well. During the pandemic, many employees' work-nonwork interface imploded. Organizations and society in general began to talk about "essential" and "non-essential" employees. Regardless of best practices, preferences, and in some cases feasibility, as many nonessential and even some essential workers were asked to work from home, work and home life faced a collision course. In many cases, employees were being required to determine ways to function effectively while in the home and cope with these new expectations as well as the additional stress and anxiety caused by-in many cases-a lack of resources or training available to help them make this transition. Additionally, other members of their families/households have also had to determine ways to function while now having someone working from home. Organizations are having to be creative at determining how to provide adequate support for employees to complete their work tasks at home and how to help them cope with the physical and psychological difficulties associated with this blurring of the boundaries between their new work and home responsibilities. Although people are generally resilient to change, society is having to become more patient with and accepting of the side effects of people working from home, and organizations are having to be much more proactive about helping employees develop a healthy psychological work-nonwork interface since they can no longer rely on a physical separation from the workplace to help accomplish this for them. Many individuals-especially working parents-who have been required to work from home are finding a new work-life balance that seemed unrealistic in the past. By exploring which work boundaries are vital and which are not, many workers are continuing to identify previously unexplored means by which both work and home life can be maximized and rebalanced. Specifically, the historically common excuse regarding employees' lack of productivity in the home is starting to be debunked by many months of workers discovering how to do exactly that. In many cases, the initial high stress and low morale associated with making the sudden and difficult transition to working from home has ironically been replaced with lower stress and higher morale as employees recognize the benefits of what were initially thought of as shortterm solutions for working in the home environment. This work format can actually allow some employees greater flexibility without compromising individual performance and productivity. Organizations may also benefit from allowing employees more flexibility. Prepandemic, some organizations had already begun transitioning to more flexible work scheduling to accommodate employees with specific needs (e.g., parents with children at home) more effectively. The pandemic forced nearly all organizations to reevaluate how their employees might be allowed a greater deal of flexibility at home while still performing their work. Although this has generally made it more complicated for organizations to monitor their employees, many are still performing their duties and allowing organizations to function, albeit in a novel format. Although organizations may not be able to control completely the work-life balance and well-being of each individual employee, there are some important questions organizations can ask to help them understand what they can do to help. • What can be done to provide support to employees working from home? • How can the organization help employees maintain a healthy balance between work and home responsibilities? • How can the organization be more proactive in reducing employee stress and bolstering general employee well-being? One resource that most companies already have in place that could be further promoted or expanded is employee assistance programs (EAP). Many of these programs already offer vital resources that can help address the emotional, psychological, and physical well-being of an organization's employees. Companies that have an EAP in place need to actively promote the services offered and encourage employees to take advantage of those offerings. Some companies have started doing this by emphasizing the benefits available and when applicable, highlighting the fact that the program is free for all employees to utilize. If not already provided, adding counseling resources can be a worthwhile investment, even if temporary, to help employees as they work to establish new routines. Some organizations have also expanded their EAP to accommodate specific needs of their employees, such as those who have children at home because of school cancellations or virtual schooling, or in finding ways to help those who do not have adequate technology at home to obtain what they need to work successfully in their home. Several organizations have offered one time payments ranging from $400-$1000 to allow employees to enhance their home workspace. While the pandemic has forced many employees Finally, given the high contagion risk of COVID-19, the implementation of employee health policies will continue to be critical. Organizations need to be clear and transparent in conveying the importance of recommended health practices and policies. Reducing the risk of illness amongst employees is crucial for both the health of employees and the continued successful operation of the organization. Fortunately, there are a variety of practices that can be adopted in order to minimize the employee risk. Such practices as prescribed by the CDC include requiring and/or providing all employees with masks, encouraging frequent hand washing, providing accessible hand sanitizer in convenient locations, requiring employees to maintain a distance of six feet apart, implement policies that allow sick employees to remain home, and requiring employees that test positive of COVID-19 to quarantine for fourteen days. Organizations have also engaged in more idiosyncratic examples of health policies including one way work place hallways and aisles, reducing the maximum elevator limit, utilizing hospital grade disinfectant when cleaning, and amending store hours to provide for additional cleaning time. Even after COVID-19 is no longer classified as a pandemic, organizations may consider maintaining some or all of these measures to prioritize employee health and prevent similar disruptions in operations. On the back of a strong economy, pre-pandemic career attitudes were generally positive. Pre-pandemic workers were also generally more satisfied because organizations needed to make extra efforts to retain employees in a tight labor market, and employees had more bargaining power and leverage because jobs were more plentiful. The pandemic radically altered this situation. Because of the pandemic, millions of workers were furloughed, and the harsh reality of unexpected job loss became the experience of many Americans. The historically resilient service industry was crippled in a previously inconceivable way. Those without jobs may be less confident in their ability to secure new jobs, and those with jobs may refuse to leave a position that has continued to provide stability through the pandemic. Although people have experienced economic swings in the past, the effect that the pandemic is having on careers in some industries is historically unique. One of the long-term consequences regarding career attitudes and experiences is that many workers will likely reconsider their field of work. Such job and career transitions will be easier for some workers than for others. Many of the jobs that have been lost are lower-skill jobs in industries such as restaurant, travel, and retail. Workers filling these jobs may have fewer options available to consider in searching for new opportunities since in many of these industries there remains less demand for this kind of unskilled labor. These workers will be in high demand once the pandemic subsides, but until then, career opportunities for these individuals will be more limited and unnaturally competitive. This is likely to cause a greater interest in these individuals seeking to increase and update their skills to be more competitive. Employers in those industries that were forced to furlough some of their more skilled labor force may find future employees harder to recruit. Jobs that can transfer to a telecommuting presence will likely gain a stronger recruiting edge in the future as demand for these jobs has skyrocketed and because many of the remote J o u r n a l P r e -p r o o f working adaptations that organizations are making now may become more permanent in the future. Furthermore, even the physical way people interact with each other at work may also change. Handshakes and other platonic physical contact was somewhat common in the prepandemic American workplace, but these kinds of physical interactions and proximity between individuals at work are likely to change for the foreseeable future. Many of the unique challenges the pandemic has caused for organizations related to individuals' changing career attitudes pertains to the recruiting, selection, and process. • How can the organization make itself more attractive to prospective employees? • How can the organization create/improve virtual hiring practices? • How can the organization effectively assimilate/on board new hires? • What types of opportunities and experiences can the organization provide existing employees to motivate them to remain loyal? • What types of advancement opportunities can the organization provide in the current environment? One consideration is the potential for providing educational opportunities for employees. In previous economic downturns, there has often been a corresponding spike in interest in postsecondary educational opportunities for those who lost employment. Many that lose jobs take that time to improve qualifications often via traditional degree-seeking programs. Although this may be the case again, the environment caused by the pandemic is unique because there is a large supply of potential learners due to so many furloughs and layoffs, coupled with at least the potential of a decrease in the number of options provided by educational institutions. In these circumstances, individuals may gravitate more towards adult learning, revenue-generating programs rather than to the more traditional degree programs. Initial evidence of this can be seen in the decreased enrollment of many university-wide systems across the country in the 2020 academic school year. This trend may reverse to follow the course of previous economic downturns but is distressing for many traditional universities nonetheless. As it pertains to human resource-related tasks such as training, development, orientation, and onboarding, it is particularly critical for organizations to facilitate a sense of inclusion for virtual employees. Even prior to the pandemic, many remote workers felt shunned or left out when compared to their physically present counterparts. While some organizations have switched to an exclusively remote work policy amid the pandemic, others offer a hybrid approach whereby employees can choose to work remotely or locally with restrictions. Each of these settings present unique challenges, but a sense of loneliness and separation is likely to be amplified in the latter approach given that a virtual employee's colleagues may still be physically present in the workplace. In order to combat this, there are many actions that an organization can take in order to facilitate a sense of inclusion and belonging. A baseline requirement for this process is to ensure that the technological resources are in place that are necessary for virtual employees to engage effectively. Zoom has rapidly become a commonly used virtual interaction software that can host both small and large groups in virtual settings with relative seamlessness. With such software, remote workers can interact with their colleagues in a high-fidelity environment. Once the basic technology is established, management should take additional steps to ensure their employees are not suffering from a sense of separation. Examples of effective steps include demonstrating empathy, promoting participation, and carefully structuring team building by J o u r n a l P r e -p r o o f hosting informal social events such as a virtual coffee chats, team celebrations, new employee recognition, and awards ceremonies. It is critical to note that these initiatives should be genuinely and intentionally supported. Additionally, collecting feedback from employee resource groups such as young professionals, working parents, and others can also help to inform the organization on ways in which they can further foster a sense of inclusion amongst their employee base. Considering an organization's own employees, and given the larger focus on obtaining and refreshing skillsets, organizations have the opportunity to sponsor individuals in skill development opportunities. When employees, and even potential employees, see and hear about efforts an organization makes to invest in its people, it is likely to increase the likelihood of thee employees to remain with the organization and look for opportunities to advance their career internally if chances are available. Additionally, as individuals gain skills and increase their education and training, there is a higher likelihood that they will be more productive for the organization and use their skills and experience to boost the organization's performance. The COVID-19 pandemic has created multiple paradigm shifts the likes of which organizations have never before seen. Even the most prepared organizations scrambled to react to the rapid changes brought on by the pandemic. Whereas most organizations would agree that job security, financial consequences, remote work, worker well-being, and career attitudes have all shifted, organizations ability to understand and respond to those shifts in both the short-and long-term has become another story altogether. However, by becoming more aware of these paradigm shifts in the key areas discussed above, practitioners can better position themselves to explore the myriad of organizational changes resulting from the pandemic. Furthermore, J o u r n a l P r e -p r o o f 22 awareness of these paradigm shifts enables individuals and organizations to proactively adapt to a rapidly changing business environment. It is likely that the effects of this pandemic will need to be explored for years to come in order to truly understand the depth and magnitude of effect. By being armed with a knowledge of these paradigm shifts, their implications, and the issues for consideration, organizations and their leaders can take the actions that should lead to long-term organizational success. The following lists represent some of the key articles and further readings we suggest for additional insight into the topics we discuss. Some sources related to job security include: Coibion To learn more about financial consequences specifically related to the COVID-19 pandemic, the following sources will likely be useful: Baker Assessing the growth of remote working and its consequences for effort, well-being and work-life balance Managing virtual teams: A review of current empirical research Effective Coordination of Shared Leadership in Global Virtual Teams Digital technology and COVID-19 Suggested readings related to employee well-being include: Sirgy Work-life balance: An integrative review Workplace resources to improve both employee well-being and performance: A systematic review and meta-analysis Mobility and stability: The dynamics of job change in labor markets Job search and employment success: A quantitative review and future research agenda University of Utah) is an Assistant Professor of Management within the Paul and Virginia Engler College of Business at West Texas A&M University University of Oklahoma) is an Assistant Professor of Management within the Paul and Virginia Engler College of Business at West Texas A&M University. His research focuses on workplace recruitment and selection, worker personality and styles, ethical decision making, social media's influence on personnel decision making, and leadership University of Utah) is an Assistant Professor of Management and Human Resources in the College of Business at the University of Wisconsin Oshkosh. His research focuses on a variety of issues related to business ethics, trust, status, leadership, and small group relations. His research has been published in the Auburn University) is the J.C. Penney Company Chair of Business Leadership in the Michael F. Price College of Business and a Professor of Management and Psychology at the University of Oklahoma. His research interests include decision making in the selection interview, feedback processes in organizations, performance appraisal, organizational socialization processes and issues surrounding unethical behavior by students