As 2019 came to a close New Jersey was facing the classic employers’ dilemma.
As the state was enjoying one of the lowest unemployment rates on record – 3.5 percent - six of ten employers reported that a shortage of skilled workers was beginning to negatively impact the business.
Employers were concerned about losing experienced technical, sales and managerial employees in a hot labor market, reporting various retention strategies, including flexible schedules, creating positive work cultures and offering better health benefits.
In fact, 63 percent members of the Employers Association of New Jersey (EANJ) said that creating a positive work culture was their primary way to retain employees, although larger employers were considering significant pay increases to retain valued employees.
So as 2020 approached, New Jersey’s full employment economy was facing a significant challenge - a limited supply of skilled workers to drive the business forward.
On March 3rd of this year, I was a panelist at a workforce development conference held at the Federal Reserve Bank in Philadelphia.
As a virus was raging in China, there was little concern about social distancing in the filled to capacity Fed conference room and attendees were still shaking hands even as the World Health Organization declared an international public health emergency in January, and the Centers for Disease Control and Prevention said in February that it was certain that the virus would spread in the United States. In fact, New York City had confirmed its first known case of the virus.
My comments focused on the Annual Gallup Workplace Engagement Report which recorded that a staggering 67 percent of employees worldwide were not engaged in performing their jobs. I said that many employers were experiencing a crisis of engagement and most of the time, were not even aware of it.
The problem, I pointed out, was that this “engagement gap” burns out good workers as mediocre and poor workers often get a free ride at the expense of better performers.
I decried the mediocrity that employers were seemingly willing to accept.
And finally I challenged the employers in the room. If you say you want skilled workers then invest in new equipment and skills training, stop crying the blues and asking the government to subsidize your low wages and lack of capital investment with taxpayers’ money.
That was then.
Soon, all non-essential retail open to the public had been closed. The Association’s staff was working remotely, as were tens of thousands of others.
A flurry of federal and state laws were swiftly enacted - emergency family and medical leave, emergency sick pay, emergency unemployment compensation insurance, emergency job protection and more All this happening at a time when employers were scrambling to establish telework protocols and to ensure the safety of the workers who were still reporting to the worksite.
In an EANJ pulse survey completed last month, by far the biggest challenge faced by EANJ members was keeping up with the sheer volume of information applying to the workplace and to the workforce.
Within three weeks of my remarks at the Federal Reserve Bank warning of an employee engagement crisis, nearly 15 percent of the state’s workforce had filed for unemployment, over 600,000 people out of work, many of whom had lost, or were going to lose, their employer-provided health converge.
Since then, over 300,000 more unemployment claims have been filed. Total unemployment has now reached the levels of the Great Depression of the 1930s, nearing 20 percent of our civilian labor force. In more than 40 percent of households in the state, at least one person is out of work because of the pandemic.
By April, 88 percent of EANJ survey respondents said they had furloughed or laid off workers, reduced hours or cut pay.
And like the Depression of the 1930s the pandemic has triggered primal fears – fear for our lives, the lives of our loved ones, fear of our jobs, fear of losing our health and wellbeing, and fear of losing our financial security.
We humans can never totally eliminate fear as it is hardwired in our DNA for survival. But Charles Darwin never said that life was survival of the fittest. What he said was this:
“It is not the strongest of the species that survives. . . . It is the one that is most adaptable to change.”
We are not alone in this crisis, nor will we be alone in the great work ahead. Alone and isolated, all against all, we are sure to fail.
Nor is it us against them, another sure-fire road to failure. Rather, it is we, together - employer and employee, labor and management. Only through cooperation and goodwill can we survive this crisis and ultimately, thrive afterward.
And so we are adapting and cooperating together, as we always have. And in this moment, we take heart in the courage, decency and collective labor of our essential workers; and the goodwill and determination of the employers that support them.
The crisis is reminding us once again that in the best workplaces, each person, whatever the rank, is inextricably connected to the work of every other person, regardless of race, gender, religion, age or nationality.
We have honored the home front during wartime, the frontline workers who got the job done. And now during the pandemic crisis when many work to keep us safe and fed, there will be a time, we hope soon, to acknowledge and reward their efforts.
Who are our essential workers? From the cashier to the emergency room nurse to the drugstore pharmacist to the home health aide taking the bus to check on her older patient, the soldier on the front lines of the current national emergency is most likely a woman.
In fact, one in three jobs held by women has been designated as essential, from the emergency ward to the shop floor. Nonwhite women are more likely to be doing essential jobs than anyone else.
In normal times, men are a majority of the overall work force. But this crisis has flipped that. In March, the Department of Homeland Security released a memo identifying “Essential Critical Infrastructure Workers,” an advisory guide for state and federal officials. It listed scores of jobs, suggesting they were too vital to be halted even as cities and whole states were on lockdown. A majority of those jobs are held by women.
How our essential workers will be rewarded after the pandemic recedes will be one of the great issues of this new decade. From wages to healthcare to labor organizing, these and much more are on the table now.
The recovery, however, is likely to be slow and arduous. We must face the situation squarely. Some businesses have survived the immediate crisis by shedding workers now, but they face long-term costs, too: the loss of trained and experienced workers, the uncertainties of hiring new ones.
At some point, the schools will be reopened and tens of thousands of working parents will be looking to go back to their former jobs.
Return to work decisions will be difficult. Individuals in certain categories, older or with medical conditions may be advised to stay out of work for longer periods. Cross training workers will be key. At the same time, decisions about who to displace when workers with the right to reinstatement return will need to be made.
Ever more complex legal standards will be part of the new normal. Specifically, medical privacy.
Employers are acquiring and using medical information to direct self-quarantine and to administer family and sick leave. The best medical evidence suggests that people will not be returning to work with a flip of a switch. And that we may experience flare-ups of the virus as more people report back to the worksite.
Or, as what has been reported in Asia, the virus may linger dormant, waiting to be triggered at a later date, suggesting a second wave of the virus in the fall. In short, the virus will have a profound and unalterable impact in how and where we work for the foreseeable future.
As noted, workers who may be older or who have pre-existing medical conditions will have a legal right to return to their jobs. What kind of medical documentation will be required? A recent editorial in the Wall Street Journal suggests that we should reopen workplaces to healthy, younger individuals who don’t live with vulnerable people. That, of course, is a slippery slope to unlawful job discrimination and the specter of endless litigation.
And where are these healthy, young workers? Even as the economy had reached near full employment, the labor participation rate of prime working age individuals – ages 18 – 54 – was at historic lows, primarily because of the decline in middle-skill jobs, addiction to pain medications and other social ills. For example, job growth had occurred in all of New Jersey’s largest 15 counties over the last five years. However, in each of these counties, wages actually went down. In other words, even as hiring increased, wages in the aggregate declined. For many prime age adults, it just doesn’t pay to work.
In contrast, the percentage of people ages 55 and over in the workforce was at an all-time high, particularly in the small manufacturing shops in the state that stay in business primarily as niche players within a national supply chain. Not much has changed on these shop floors, a tweak here; a fix there. Older, long-tenured workers operate decades-old machinery producing essentially the same niche product.
So even if not a legally questionable practice, scrambling to find younger, so-called healthier workers in this environment, particularly as immigration has been curtailed, is a pipe-dream.
And, of course, there is the liability employers could face if employees were to get sick after returning to work or if they brought the virus back to their homes. Workers who feel that they were brought back too soon or were not placed in an adequately safe environment could have substantial legal remedies.
And physical health and safety, so closely tied to productivity and morale will forever be part of the work environment, both on and off site.
It is likely that the health and safety standards that are in effect now for every business that remains open will be required for the foreseeable future. Even the smallest business has the general duty of furnishing a place of employment free from recognized hazards are likely to cause physical harm to employees.
And, as we know, employees can refuse to work at a site that they reasonably believe is unsafe or unhealthy and they will receive compensation for many weeks after they have left the job.
Before the crisis, many EANJ members reported suffering from the malaise of low morale, low engagement and no remedial strategy even as the bottom line was being negatively impacted. No time, no resources.
This strongly suggests that leadership did not view a talent management strategy as sufficiently important to the business. If it was important to the business, time and resources would be allocated.
But in the months and years ahead, it seems to me that there is one basic reality. Employers will need to step up their game. Because the underlying challenges that existed before the pandemic have not gone away.
In fact, they are becoming more acute.
For example, it is likely that telework arrangements will be left in place for some time and, in some cases, may permanently alter how and where work is performed. It has been pointed out that working from home is a privilege for those higher paid employees who can perform work remotely while “essential workers” such as production workers, administrative clerks and others who make less money bear the costs of commuting. How these inherent inequities are harmonized will be important in setting the overall business culture and whether some employees feel less valued than others.
And similar to the aftermath of the September 11th terrorist attacks which greatly affected thousands of people with stress-related illnesses, it is not unexpected that prolonged shelter in place will impact many thousands of us, particularly those of us who were unemployed at the time. Before the pandemic, the World Health Organization reported that high levels of stress at work were causing unprecedented occupational illnesses. One in three employees stated that they had left a job because of mental health-related issues and 89 percent believed that the work culture should support employee mental health.
According to the most recent Kaiser Family Foundation survey, 45 percent of adults (53% of women and 37% of men) say the pandemic has affected their mental health, and 19 percent say it has had a “major impact.”
And many suddenly unemployed workers in one of the nation’s wealthiest states say they have been pushed to the edge of hunger, forced to ask for help for the first time in their lives.
Many returning workers will have depleted their savings or increased their debt burden, which we know has a negative impact on productivity and wellbeing. Prior to the pandemic, the average working family in New Jersey had only $3,000 in retirement savings; 40% of households headed by a 45 to 54-year-old have no savings at all. Several studies have reported that one in five workers lost substantial hours worked because of poor financial planning and limited savings. Many employers were beginning to incorporate financial planning and debt counseling within their wellness programs.
Further, many workers have decided that they are financially better off receiving enhanced unemployment compensation than getting a paycheck. Acting in the short-term, employees have asked to be laid off because many make more money getting an unemployment check than they do working a low wage job. However, we know what prolonged unemployment does to the mind, body and spirit. And we also know that once business and industry adapts to new efficiencies, getting more with less, there will be no going back from lean staffing. Selecting who returns and how much to pay them will require a careful strategy.
As we learned after 9-11, good employers become better when the chips are down. And that is why the board of EANJ invested and built a preeminent employers association – to support employers at all times, through boom and bust cycles, though good and bad times, and now at the moment of greatest need.
So what lessons can our members teach us from their responses and adaptation to the pandemic? How have they managed the crisis, or even used the crisis to nurture a more positive work culture.
To sustain morale at Concord Management Resources, staff were asked to submit profiles of family members performing essential work such as healthcare workers, police officers and people preparing meals for our most vulnerable residents. A portfolio of uplifting experiences was widely shared and enthusiastically embraced – a big lift during a difficult time.
Or consider Children’s Aid & Family Services that operates group homes, interacting with clients and their families, providing schools with anti-substance abuse programming even when schools are closed. They implemented financial incentives, particularly to employees working with COVID-19 positive residents who did not warrant a hospital stay. Does compensation count? You bet.
And Parker Interior Plantscape whose owner personally explained to each furloughed employee about how to apply for unemployment insurance so that they would not be set adrift and stay connected when it was time to return.
And there is much more to learn.
For at the end of the day, when the pandemic recedes, and the balance sheets are tallied and the profits and losses are counted, it will be the human values of shared service, sacrifice and teamwork that will endure.
We honor the past but can only do our best in the present to secure a future for ourselves, our families and our communities. We know that the impact of the pandemic will linger for quite some time but we also know - if history is any guide - that our determination and resiliency will prevail in the end.