The last few months have been a significant challenge for most employers both in Ireland and across many global financial centres.
When lockdowns hit, we saw the immediate reaction within many companies being temporary layoffs and furloughs to conserve cash. The next phase was redeployment of staff from heavily impacted areas to other roles or functions within businesses. Those businesses hit hardest had to progress to permanent layoffs. The recovery stage is starting to roll out, with organisations adding staff. Both to address any expertise gaps identified, so they can transact in a new world post-pandemic and rebuild growth potential. This recovery is occurring unevenly, dependent on sector and geography.
At Azon, we saw our clients based in Asia were more advanced through recovery stages. COVID-19 arrived earlier on their doorsteps, and they were exiting lockdown as Europe was in the midst of harsh preventative measures. For example, by the month of April, two Asian headquartered fintech clients commenced the build out of European platforms from Ireland. Similarly, Continental European companies with global operations also advanced their own hiring plans from Ireland throughout May and June. Ireland and the UK generally lagged these countries as we were later going into lockdown.
FAANGS at work
Often seen as the leaders in work/life balance and flexibility, west coast US headquartered MNCs have a strong presence in Ireland. Their reaction, and the change in the mood music regarding these issues will be a key element to track.
At the outset of the crisis, these companies were quick out of the traps to comment that employees did not have to work from an office for a considerable period of time. Twitter even went so far as to say that they are happy to support employees’ remote working ‘forever’. Google recently announced that their blanket WFH policy will extend to July 2021.
The people agenda
To understand what is driving these pronouncements by Big Tech, you have to go back to the Global Financial Crisis where Tech companies honed in on the ‘war for talent’. Securing the right personnel was a key determinant in their ability to scale the business and ultimately, meet shareholder expectations. As a result the people agenda became their primary focus, with onboarding and retaining employees becoming cornerstones of every day operations and long term strategy.
This ‘war for talent’ brought lavish employee benefits (when compared to what employees benefits existed in Ireland before then) and higher employment engagement. This helped Tech companies to support their ambition to attract and retain sufficient talent to scale their operations internationally. These employees were now buying into the overall proposition and corporate environment as opposed to just the role responsibilities itself. Companies trying to differentiate from their competition in this space out-hired each other with Michelin star chefs onsite to woo and retain employees and where responses to employee engagement surveys in one big tech company included a request that green grapes be separated from red grapes in the in-house restaurant!
These direct and indirect employee benefits also resulted in a significant number of bright and ambitious employees willingly taking on more siloed roles than they would have entertained previously. Suddenly a global finance reconciliations project didn’t seem as mundane as previously thought to high performing finance professionals and was embraced as opposed to cursed at!
The focus on employee benefits and perks has proven to be a very effective strategy where year-on-year revenues have been significantly growing within these Big Tech companies.
What happens now?
Behind each of these companies are shareholders and venture capitalists who of course want to see significant returns from their investments. Ultimately, these are the people who will determine when employees will return to office based work if expected revenues do not materialise. Will there be a push to get back to ‘normal’ if this WFH experiment proves unsuccessful, once conditions allow for safe return to offices?
Some Big Tech companies have recently announced redundancies that impact employees in Ireland. The conflict between some employees being let go while others still enjoy 3 meals a day delivered to their door is one that will be examined both by employers and employees. We are entering a cycle of uncertain Revenue prediction, and the people agenda might change course as it tries to reconcile itself with a new economic reality.
The FAAMNGs of the world have set the tone for how businesses approach recruitment, retention and HR. Even, the environment created by these companies was heavily focused on large and inclusive employee social gatherings as a means of maintaining high staff morale and gaining staff commitment. Undoubtedly, the health issues around hosting such events mean they are likely to be severely curtailed for the foreseeable future. We are all watching for what they do next.
What about the rest of us?
On a wider scale, all kinds of firms are watching each other. Who of the Big 4 Accountancy/Consultancy and Top 5 Law firms here will be the first to head back into the office? How will more comprehensive WFH solutions be integrated into a new normal? How does the sales function move forward in a travel and event constrained world?
On the candidate and employee side, the normalisation of WFH has been rapid. Once a niche arrangement to now being a matter of course in preliminary negotiations. If challenges mount on how to manage, scale and train a majority WFH workforce, turning back the clock might be a challenge. The cascading effects on office space, team construction, project management are significant.
Hopefully, thanks to the amazing work of frontline healthcare workers, and collective action to reduce potential outbreaks of COVID, we are on a steady path back to recovery. That recovery will take us on a path to a much different world of work.