With the lessons learned from the recent pandemic, Lloyd's said major themes are emerging, such as an increased emphasis on worker health and well-being. (Photo: Shutterstock)
A new report out of the United Kingdom outlines ways that the pandemic has shifted the conversation on employer/employee relationships. The report, "Safeguarding Human Capital," by Lloyd's, underscores many points that American employers are also seeing: more acceptance of remote or hybrid work situations, a growing emphasis on employee wellness and work/life balance, and the importance in corporate culture and leadership from the top in setting the tone for healthy work relationships.
The Lloyd's analysis points out how insurance benefits and data analytics can be important tools for companies in protecting and expanding their human capital, which it defines as the collective abilities and skills of employees.
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"Human capital is key to company value, and whilst insurance solutions already exist to protect this intangible asset, the past two years has highlighted the need for insurers to work with risk owners to manage the new risks that have emerged as work practices change and evolve," said Dr. Trevor Maynard, head of Innovation at Lloyd's.
Human capital vs. human resources
According to the report, companies are re-thinking their relationship with employees, and as a result, their way of managing human resources. "There is a distinction between human resource management – which encompasses the systems, processes and policies required to hire, train, and enable employees – and the growing field of human capital management – which aims to optimize the value of an organization's workforce," the study said.
With the lessons learned from the recent pandemic, Lloyd's said major themes are emerging. One is the increased emphasis on worker health and well-being: the study quotes a recent survey that found 60% of adults said their mental health got worse during COVID-19 lockdowns. Companies are also adjusting to the shift in remote work: in the UK, employers expect the proportion of people working from home regularly to increase to 37% from 18% (pre-pandemic). With that shift in work habits come other issues: workers said they missed socializing with other workers, for example. And trust is still an issue, with 34% of employees saying that supervisors have expressed a lack of confidence in employees' work skills.
Considerations for the new normal
The report noted that employers make significant investments to help keep workers healthy, happy, and engaged. Measuring those qualities can be a challenge, but metrics on employee churn and absenteeism can be a starting point, the report said. Analytics of internal communications might also be helpful, if privacy concerns are addressed, the report added.
Four key actions recommended by the report were:
Ensure leadership champions a culture that truly empowers employees in hybrid working conditions. The challenge here is providing a clear sense of direction while empowering and trusting employees, the study said. "This is particularly critical in a remote working setting, as the usual culture amplifier – the office – might not be present."
Use data to hire and manage your employees. "Strong data analytics will be critical to help organizations hire the most skilled, diverse and compatible employees, help manage their performance (including productivity, innovation, influence on internal networks, alignment with organizational culture etc.) and identify early warnings signs showing potential risk factors," the study said.
Prioritize the needs of employees but also reduce the reliance on any one individual. Supporting the well-being of employees and providing development and career opportunities enhances human capital, the Lloyd's analysis said. "At the same time, reliance on any one individual can lead to an adverse impact on an organization's competitive position," the report added. "It is, therefore, critical that the right processes are put in place to share and codify any business-critical individual knowledge."
Horizon scan and be prepared to continuously adapt to change. Preparing for the future is a key to success, the analysis said. "Organizations should be flexible and prepared to adapt to the future needs of their employees, as well as continually upskilling employees to ensure they are equipped to deliver in this fast-paced world."
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