COVID & the Future of Work:INSIGHTS FROM PAYCOR’S C-SUITE

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In just a few months, everything changed:• 30 million unemployed and counting

• An economic contraction that might extend through 2021

• Remote employees juggling work and family under the same roof

• On-site workers faced with temperature checks and health screenings

INTRODUCTION:

unemployed

31M+ Recession until

2021?

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Talent Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Workforce Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Benefits Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Employee Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

The long-term future is impossible to predict, but what might all this mean, and how will work change, over the next year?

These last few months have been challenging, to say the least, for everyone. I’m an optimist by nature though. I really am. After every crisis, financial or otherwise, we’ve always come back stronger, smarter, more innovative. We’re going to do it again.

– Raul V il lar, CEO, Paycor

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Talent ManagementRecruiting, hiring, onboarding

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Talent Management in 2020.Whiplash doesn’t even accurately describe the last few months. In January there were more jobs than workers . By May, economists were

forecasting 20-25% unemployment . Ten years of U .S . job growth got nearly wiped

out in a month . Recruiting in 2020 will be all over the map . Hiring in the retail,

tourism and airline sectors will continue to plummet . But there will be bright

spots, too . Paycor is seeing hiring activity for HR, finance and IT roles, as many organizations fast-track business transformation and digitization.

of U.S. job growth got nearly wiped out in a month.

Ten years

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It’s all about intentional messaging. The labor market is on the rebound . Thousands of companies will

once again vie for converting the most exceptional profiles into

candidates . Intentional messaging will separate the have’s from the

have not’s as far as sourcing is considered . It’s as critical now as ever

to pull at the heart strings of candidates while crafting individually

targeted messages through your ATS (vs . a one size fits all message) .”

– Bil l Neese, SVP, Talent Acquisition

See How the Right ATS Helps You Hire Chevron-Right

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For companies that are not hiring…

Now is the time to build a recruiting pipeline. Even if reopening proceeds in fits and starts, the job market will

come back, fast in some geographies, slow in others, but when

hiring comes back, we may find competition for top talent in

certain industries comes back just as intense as ever . I do believe voluntary turnover will come back with a vengeance. The reality is no matter what an employer does to encourage

career development and loyalty, there’s always going to be a

certain percentage of people who took a pay cut in April who

will start looking for opportunities in July . This is a golden opportunity to leapfrog your competition. If your competitors

aren’t building a pipeline now, they might never catch up .

If you’ve got a talent pipeline in place, it could be a decisive

strategic edge for your business in the coming months .

– Karen Crone, CHRO, Paycor

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ENTEveryone needs to be on

the lookout for poachers .

There’s a much larger talent pool available, great qualified candidates who through no fault of their own are out of work.

For people who have kept their jobs, recruiters will see them as

top talent, so there’s going to be a lot of poaching in the coming

months . And an interesting side effect of working from home is,

it’s a lot easier for a recruiter to get in touch with a candidate and

have a long phone call in the middle of the day .”

– Jon Toelke, Senior Manager, Talent Acquisition

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Employers will make testing for the virus part of the hiring process.

The CDC is actively encouraging temperature checks as an important first line

of defense . The Equal Employment Opportunity Commission (EEOC) recently

released guidance on testing job applicants for coronavirus “to reassure

employers that they may screen job applicants after making a conditional offer,

as long as the employer does so for all entering employees in the same type of

job .” Keep in mind though, any testing you do must be kept confidential, just as

you would all medical records .

Look for many organizations, especially those in states that will see coronavirus caseloads peak this summer, to follow the lead of Amazon, Walmart and others and require on-the-job medical screening and temperature checks.

COMPLIANCE WATCH OUT

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Workforce PlanningLabor costs, analytics, forecasting

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Workforce Planning in 2020.HR and Finance will no longer work in silos. In a more forgiving business environment, HR and Finance could live in their

respective bubbles . But in the new COVID world of work, SMBs are being

forced to run both more efficiently and more creatively . A 2019 Paycor study found that the typical HR professional spends only 15% of their time on labor costs. Forty-three percent of HR teams aren’t involved in

managing costs at all . Look for this legacy division of labor to give way to a

new, necessarily more collaborative reality in 2020 .

of HR teams aren’t involved in managing costs at all.

43%

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Waste of any kind is no longer an option .

To solve problems and grow, HR and Finance need to share a brain.

For most SMBs, waste of any kind—time or money—is no

longer an option . That’s one reason you need the Finance

brain . Similarly, for most SMBs, talent—skilled workers

who feel good about their careers and proud of their

companies—is a key driver of success . That’s where HR

comes in . Bring both disciplines into the decision-making

process and you’ll arrive at much better outcomes .

– Adam Ante, CFO, Paycor

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Businesses need a complete picture of labor costs . When HR and Finance share a brain, they can better diagnose and solve complex talent-related problems. But first, they need to share data. For many businesses, data is

spread across disparate, incompatible systems that don’t talk to each

other . For growing companies that still rely on manual workarounds,

the data they need may be practically inaccessible . For example, when

your company faces tough questions—to drive better performance and

outcomes, do we tweak salaries, benefits, training or our hiring profile?—

HR and Finance can’t even talk about possible scenarios if they can’t

locate and agree on what data is driving the decision .

To overcome the data gap, HR and Finance need a core HR solution for all employee data. (If you have to switch platforms,

log-in to multiple systems, re-key information or open multiple

spreadsheets to find data, you don’t have a core HR solution .)

Learn Why and How to Switch HR & Payroll Providers Chevron-Right

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The next big challenge will be the skills gap . HR & Finance will tackle big problems in 2020 and beyond, starting with the skills gap, a fundamental feature of the talent landscape that COVID hasn’t changed.

In 2019, the World Economic Forum reported that 54% of all employees will require significant reskilling and upskilling in just three years. Add to that the stark demographics of an aging U .S .

workforce . The U .S . fertility rate is 1 .6 . compared to 3 .5 in 1960 . (See Japan’s

decades-long stagnation for an example of where low birth rate leads .)

And while there are 61 million potential Gen Z workers in the pipeline,

they’re not an instant fix . More than half of HR leaders told SHRM they

fear a skills shortage and believe schools have done little or nothing to

make up the skills gap . And attracting highly skilled young (or young-ish)

people, assuming you can find them, isn’t easy (just ask manufacturers .)

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INGSMBs will create,

not just recruit, talent .

We see organizations of all sizes investing in a learning culture.

Over the years, employee development has evolved from

basic instructor-led classroom training to full-on experiential

learning . Self-directed, easily accessible training is such a win/

win . If your people are constantly learning, it’s good for them,

good for their careers and their confidence, and it’s good for

the business, as you’re training your highest-potential employees to be more versatile and valuable, and

ultimately to fill those job reqs of the future .”

– Greg Goold, Director, Talent Development & Learning, Paycor

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State tax implications Let’s say your office in Ohio went virtual and you have employees working

from homes in a neighboring state, say Kentucky . The taxing jurisdiction where

the employee is working from home might expect you, the employer, to

withhold payroll taxes for their state, not yours . Your payroll software should

automatically adjust accordingly, though there are exceptions . Some states

have reciprocal agreements that allow a business to withhold only in the state

where the employee lives . Others make a distinction between employees who

choose to work from home versus ones who do at the request of an employer .

COMPLIANCE WATCH OUT

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Benefits StrategyHealthcare benefits, employee wellbeing, open enrollment

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Benefits Strategy in 2020.What employee wellbeing means now. A third of Americans show signs of clinical anxiety, according to the Census

Bureau . And a recent SHRM study found similar numbers: 35% of employees

report feeling depressive symptoms often . By some estimations, that’s nearly

a twofold increase year over year . To make matters worse, sixty percent of

counties in the U .S . lack a single psychiatrist, according to research from New

American Economy .

of Americans show signs of clinical anxiety.

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I think HR will work with their brokers now more than ever before on mental health and wellbeing. Insurance carriers are extending EAPs [Employee Assistance

Programs] at no cost and some offer free trials . In the past, EAP

might have had a negative connotation, but not anymore .

There are great apps that can be part of a wellbeing program,

apps for sleep, for meditation and some programs even offer

online therapy . For business owners, the key is to work with a broker who can match you with an EAP with a top-notch network of specialists.

– Shaun Scott, SVP, Paycor

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At Paycor, we define ‘wellbeing’ broadly and generously to include more than just health and wellness.

Providing comprehensive support for our employees is core to our

mission and values and it makes good business sense, too .

The components of holistic well-being:

– Jennifer Gessendorf, Senior Director, HR, Paycor

Mental health – Condition of psychological and emotional well-being

Financial health – State of personal and family financial security

Social health – Ability to form satisfying interpersonal relationships with other

Physical health – Level of illness, injury and general lifestyle

Source: Metlife, 2020

Defining wel l being

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YV irtual healthcare is here to stay . The practice of meeting with a doctor online through video chat or over the phone was catching on slowly but surely before COVID. AMA reports that telehealth increased by 53% from 2016 to 2017, but

it still had a long way to go . In 2018, 96% of large employers offered

telehealth but only 20% of those companies said that at least 8% of

their workforce used the services . Fast forward to today: a recent poll

by the Kaiser Family Foundation found that 23% of adults have used

telehealth services in light of the pandemic . In March 2020, the White

House lifted Medicare requirements for telehealth visits to make it

easier for patients and doctors to use the technology . Now, more

providers accept Medicare payments for virtual visits .

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There really is a tremendous upside with telemedicine and I feel like we’ve just scratched the surface with what’s coming.

It’s cost-efficient for the employer, as you’re reducing fees,

especially from high-cost events like ER and urgent care visits .

You’re also going to realize productivity gains . Just think of how

much time an employee saves when they don’t have to drive to a

doctor’s office . I’ve seen studies that show a routine primary care

physician appointment takes about two hours and an urgent care

visit takes four . A telehealth visit takes an average of 5 minutes .

That alone is a game-changer .

– Jennifer Gessendorf Senior Director, HR, Paycor

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PPP & HSAIn response to COVID-19, the federal government issued new rules that allow employed workers to use HSA funds to cover telemedicine. If the employee is laid off, they can use HSA to cover COBRA premiums

tax-free . Employers that received PPP loans can use some of the PPP funds

to begin or increase contributions to their employees’ HSA accounts .

However, the employer can’t deploy those funds selectively; if you do it for

one employee, you have to do it for everyone . Talk to your broker before

you make a move, as PPP has been notoriously complex and accurate

documentation is key to getting your loans forgiven .

COMPLIANCE WATCH OUT

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Employee ExperienceCareer development, company culture, internal communications

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Employee Experience in 2020.Don’t let company culture be a casualty of COVID. No matter if your company is on-site, virtual, or a little bit of both, your

company culture is changing . COVID disrupted everything, especially

your employees’ relationships with each other, their managers, and the

organization . Don’t let company culture be a casualty of COVID . In a time of rapid change, Paycor’s Chief HR Officer Karen Crone believes the most important thing HR leaders can do is listen.

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You can’t reassure your team, much less get them excited and engaged again, until you know how they’re feeling. And in many cases, they might not even know how they’re feeling

until someone asks . Here’s where HR can really help .

We recommend surveying your team frequently. Ideally,

surveys are anonymous because you’ll want to ask sensitive

questions and track how sentiment changes over time . How engaged are they? How satisfied are they with their career growth, their job challenge? Are they confident in company leadership? You might even ask questions that under normal

circumstances might seem too personal, like if they have the

right support network outside of work . Gather continuous input

and design interventions and communications based on data .

Leaders need to inspire trust now more than ever, and listening

is the first and most crucial step toward creating that high-trust

environment .

– Karen Crone, CHRO, Paycor

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Companies that get remote work right will have an edge .

If your organization can develop and maintain a virtual environment that is healthy, productive and enjoyable, you’ll be much more effective in recruiting and retaining top talent. But that’s easier said than done. Fifty-three percent of at-home

workers told Gallup they want to continue to work remotely after

shelter in place orders are lifted, although it’s interesting to note

that a month ago, when remote work still felt new, that number

was 62% . Global Workplace Analyitics estimates that when the

pandemic is over, 30% of us will work from home at least part of

the time . Before the pandemic, less than 10% worked from home .

Bottom line: most organizations are not prepared for remote work .

It’s one thing to quickly stand up a virtual office and take all your

calls on Zoom . It’s another thing to get an entire organization to

be as productive virtually as they were in-person, and to do so

consistently for the long haul .

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The way forward is to invest in learning

Before the crisis that was true as a general principle, but now training has taken on a whole new dimension. There’s an

immediate need for technical training, how to use remote work

tools, how to maintain network security, how to set up your home

office . Step two is how to thrive . How to have really effective

online meetings . How to collaborate with coworkers online,

sometimes in real time, sometimes asynchronously .

– Mark Wilson, VP, Organizational Development, Paycor

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What if an employee is afraid to come back to work?

There are exceptions, so you’ll need legal advice on a case-by-case basis . The

key in most cases will be to determine why exactly the employee is reluctant

to work on-site . If the employee (or, here’s where it gets complicated, a family

member) has a disability as defined by the Americans with Disabilities Act or

has a documented comorbidity that makes them more suspectable to serious

illness as a result of COVID, they could have legal justification for not returning

to work . Whether an employer can be held liable for an employee’s exposure

to COVID-19 is unclear . The first COVID-19 related lawsuit, Toney Evans v .

Walmart, Inc ., is working its way through court now . Big legal issues are at

stake, including how causation can be established and what reasonable care

looks like in a pandemic .

In general, employers are not required to allow employees to work from home, so long as the company has complied with all federal and state workplace safety guidelines.

COMPLIANCE WATCH OUT

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How Paycor HelpsFor 30 years, we’ve been listening to

and partnering with leaders, so we

know what they need . That’s why

40K+ SMBs trust Paycor to help them

achieve their goals .

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