The Difficult Questions Employers Must Answer as COVID-19 Continues to Spread

Health and safety first, always. It is a message shared frequently in recent weeks – and it is encouraging to see how many businesses are truly living it. In many sectors of our economy, we have seen businesses proactively close to protect employees, customers and communities, often committing to pay employees during the initial closure window, despite the lost sales, or reimagining the way they do business to allow employees to continue to work. Businesses that cannot close because they provide essential services have stepped up to protect workers in new ways and go even further to make their employees feel valued.

In many ways, we have seen the very best in our society as we face the challenges of COVID-19 together, and there is every reason to expect these trends will continue. As the weeks continue to pass, however, the questions leaders must answer grow increasingly complex. What they want to do may not align with what they are able to do in this changing landscape. Three key factors facing companies today are as follows:

1. Interpretations of what it means to be an essential service provider change almost daily, may vary considerably state to state and may not be intuitive to the general public.

For healthcare workers, first responders, utility workers, grocers and others providing life-sustaining services, the distinction is clear – and the key communications challenges center around the continued evolution of safety precautions and ever-present risk of infection. For businesses further down the supply chain, the interpretation of “essential” is more complex. The leaders of these companies feel a responsibility to serve their customers, are confident in their ability to protect workers, and know the only way they can continue paying their employees is to keep operating. However, the public interest being served may not be as clear. Criticisms are, in some instances, getting louder as new government orders tighten the interpretation of “essential” and new cases of COVID-19 come to light. Ongoing education about the company’s mission and reinforcement of the health and safety commitments they have made are critical to protect corporate reputation over the long term.

2. Financial pressures are increasing as many of the initial closure windows near expiry.

As companies close for longer periods, many will not be able to sustain employee pay, and in some instances, may also make the difficult but necessary decision not to continue benefits for furloughed employees. Some companies will also need to reduce headcount more permanently to address the current economic environment. No one wants to be the first to make these decisions – or to make them at all – yet many are beginning to foreshadow that cost reduction will be necessary and are even taking pay cuts at the most senior levels of leadership knowing what is ahead.

3. As the crisis continues, specific disruptions will create ripple effects.

Reported cases of COVID-19 will require some sites still in operation to, at least temporarily, close for cleaning and potential quarantines. A single site closure could lead to work stoppages at other locations due to supply or distribution challenges and may, over time, impact the operations of customers or suppliers. Companies have been actively working on contingency plans to mitigate this risk but will need to remain nimble in managing through an evolving and unpredictable environment.

Decisions are not as black and white as many stakeholders would like them to be, and new best practices continue to be written every day.

We’ve summarized key actions companies communicating through varying operating conditions will want to consider as they take these next steps.

Scenario 1: Essential Service Providers Maintain Ongoing Operations

• Continue to reinforce that employees’ most important responsibility is their own health and safety and that of their colleagues – and be specific about the policies they need to continue to follow.
• Use the “essential” designation to reinforce a sense of pride across the organization. Reaffirm the critical nature of the services provided, sharing customer appreciation and recognizing specific contributions by local teams through storytelling.
• Ensure senior leaders remain at the forefront of communications. While local managers are often the most trusted ambassadors, it is important that employees know C-suite leaders are thinking of them and value their contributions.
• Actively monitor online chatter to understand any shifts in employee or public sentiment. Consider pulse check surveys and/or other feedback channels to reinforce that employees’ opinions are valued.

Scenario 2: Changing Interpretation of “Essential” Forces Sites to Close to Comply with New Government Mandates

• Prioritize providing immediate guidance to employees about whether they should report for their next shifts. Information may be iterative as specific policies are finalized, but it is important for the company to act decisively in responding to new government directives intended to protect employee health.
• Understand that all decisions will be seen as precedent-setting should additional sites be forced to close. If policies regarding employee pay and benefits while sites are down are being communicated for the first time, share the messages broadly across all employee groups to minimize rumor and misunderstanding.
• Prepare for questions about whether other sites will also close based on the new interpretations of essentiality put forward by individual states or cities. Know that decisions to keep other sites open may be positioned by critics as going against government recommendations.

Scenario 3: COVID-19 Outbreak Forces “Essential Services” Sites to Close

• Have a communications toolkit in place to pre-empt the vocal critics likely to challenge the company’s operating decisions and/or safety measures with the benefit of hindsight.

Provide as much clarity as possible on topics such as:

• When the infected individual was last onsite
• Which areas of the facility or departments may be most at risk
• Need for / length of shutdown
• Need to quarantine
• Whether employees will be paid when not working
• How customers and suppliers may be affected
• Engage on external channels selectively to reinforce messages communicated internally in ways that reaffirm the company’s commitments.

Scenario 4: Company Proactively Closes Sites, but Continues Paying Employees

• Communicate closures/extensions of initial closing periods directly to employees with a continued focus on health and safety above all else.
• Set expectations for when decisions will be re-evaluated and how employees will receive updates.
• As appropriate, begin foreshadowing impacts to the company’s go-forward strategy, including the potential need to postpone certain initiatives or otherwise cut costs. This will help establish a reputation for transparent communications
• Find ways to regularly engage with employees while they are not working to reinforce how highly they are valued. Build new channels if necessary or leverage public websites and/or social channels to reinforce commitments to employee health and safety, which are relevant to all audiences in the current environment.

Scenario 5: Company Proactively Closes Sites, but Cannot Pay Employees

• Consider all closing strategies listed above, understanding that messages about the go-forward strategy and other cost-cutting initiatives become even more important when some or all employees are not being paid. Affected employees need to understand they are not the only ones asked to make sacrifices to protect the company’s long-term interests.
• Proactively answer top-of-mind questions such as:
  • Will health and medical benefits continue (including the company’s ongoing contribution, if applicable)?
  • Can I apply for FMLA if ill?
  • Am I eligible for unemployment?
  • Should I apply for benefits through COBRA?
  • Will I still have a job when this is over?
• Point to internal employee assistance programs and/or other services that can support employees through the transition, including links to or phone numbers for organizations focused on mental health.
• Be ready for questions about what the company’s senior leaders – and particularly the CEO – are doing to help the company and/or its employees. Many CEOs have already announced their decisions to take pay cuts. Employees are very likely to ask the same from their leadership.

While there are undoubtedly difficult days ahead, those companies that put people first in their decision making and communicate those decisions with empathy and transparency will create opportunities to strengthen their culture, leadership and stakeholder relationships through the recovery. We at FTI Consulting are encouraged by the trends we have seen to date and remain optimistic as we enter this next chapter.