Retail’s Return to Work Post COVID-19

Two years ago, “working from home” was a stigmatized statement. Being in the office was thought to be critical to productivity, culture, and development.¹ Companies fought for prime office space in major urban centers and worked tirelessly to increase collaboration through open-office designs and communal spaces. However, the COVID-19 pandemic changed our way of life in a way that no one could have predicted. With shelter-in-place orders put into action, organizations were forced to act fast and completely change the way they operate. Retailers, specifically, grappled with how they could support both their remote corporate employees without alienating their front-line workers who did not have the option to work remotely. Now, two years later, business leaders are more convinced about the productivity gains of this monumental shift to work-from-home in the corporate suite, but many are not giving up on the office.

As organizations seek to adapt to the changing work landscape, many have adopted new models for their corporate employees. Across our ongoing conversations with leaders across the c-suite, we spoke in depth with four Chief Human Resources Officers at publicly traded retailers ranging in size from regional players to national and global brands, to better understand the spectrum across which organizations are implementing these new models.

At the most basic level, retailers are choosing among three primary options for returning to the workplace: calling everyone back to the office, developing a hybrid model, or implementing a fully remote working structure. However, there are many nuances these three categories don’t address. Throughout our conversations, RRA learned that hybrid and flexibility mean different things to different people. One HR leader told us they are going fully remote and have begun piloting and leveraging AI/VR technologies. Some have developed a framework based on the needs of different categories of roles, giving autonomy to managers and using travel to convene on a specified basis. Others have created satellite offices across the country, requiring visits to headquarters on a specific and intentional cadence. Lastly, some are establishing “hard hybrid” guidelines, dictating specific “in office” days for specific teams. As organizations seek to navigate the changing tides of the pandemic, figuring out the right working model is top of mind for executive teams and boards.

How does leadership feel? 

At the start of the pandemic, more junior level employees relished in the flexibility of “working from anywhere,” while the more senior leadership struggled both with managing their teams’ newfound autonomy while also adapting to their own leadership style. To many in the c-suite, CEOs, and board members, being in the office was an integral part of their career development. These leaders grew up in organizations that valued arriving early and leaving late as the picture of dedication and hard work.

“Those who are most resistant (to the work-from-home model) may be the most distant from the action.”  

CEOs did not expect to change the way they lead, which ultimately led many to wrestle with their longstanding beliefs regarding “how to work.” There has been a lot of discussion about generational views of work and how many CEOs and other top leaders have had to wrestle with their belief that to be effective you have to be “present” and in-person. This was articulately reflected by one HR leader who said those who are most resistant tend be the most distant from the action.  In other instances, CEOs were pushed to be more strategic and less hands-on, given the physical distance from their teams. Instead of spending time in the office going from one tactical meeting to another, one CEO noted that he had more time to take external meetings, meet with stakeholders, and holistically think about the business and its growth from a more strategic vantage point.

To further understand how the c-suite was feeling, we spoke to approximately 50 CEOs across the globe and found that while some struggled with this new balance others have found silver linings from a quality of a life perspective. One example of a more traditional CEO at a $2B specialty retailer, who firmly believed being in the office was the crucial for the business, ended up relocating to a more temperate climate for the winter months. However, after experiencing working from this new place while also maintaining productivity and increasing quality of life, this CEO’s perspective changed, realizing that working elsewhere did not mean working less effectively.  Research from consulting firm PwC found that fewer than 1 in 5 executives want to return to the shared workplace as it was before the pandemic.²

As the pandemic has continued, Cushman & Wakefield reported that 70% of millennial and generation ‘X’ workers have struggled with the challenges of working from home, as work environment in small apartments, shared spaces, or even while working from their parents’ homes has proved difficult and exhausting.3 These employees are ready to return to the office – albeit with a less rigid schedule. This change in attitude has required CEOs to lead through uncertainty. Unable to mimic the environment they grew up (in person and in office) CEOs have learned to lead in new ways, ultimately focusing more on outcomes than process.

Linking strategy to your culture and business objectives: 

How and when companies bring back their employees will have long-standing implications for their culture. Table stakes are high, especially when firm lines are drawn in the sand. Insisting that employees return to the office creates the risk of losing talent, while enabling remote working options makes maintaining a consistent culture much more difficult. There is no ‘one-size-fits-all’ solution, as an organization’s strategic priorities and cultural norms will ultimately dictate the direction and speed of change. However, organizations that have embraced an intentional in-person approach with a ‘test-and-learn’ mindset have proven to be more agile throughout this iterative process.

The model that organizations choose cannot only be a decision based on the executive team’s opinions. Like any other business strategy, it needs to be intrinsically linked to the fabric of the organization. In speaking to several retail brands, the ones that seemed to have had the smoothest transition to this new paradigm were the ones that articulated and linked their approach to their overall guiding principles of culture.

One HR leader began the process of pandemic policy development by first re-stating the company’s well-known mission and values. In turn, their COVID response protocols were tied specifically back to these guiding principles. This ensured clear alignment and consistency across the organization, while re-enforcing the culture they had worked carefully to build over the years.

Another CHRO used the pandemic as a catalyst to help transform their more traditional, legacy-minded corporate culture into a more agile and entrepreneurial mindset. Before COVID, few had laptops or leveraged Webex or Zoom. In-person and in-office interactions were essential and central to the way the company operated and given their geographic location, also hindered the access to talent. COVID-19 required the organization to quickly change norms. Investing in technology capabilities and opening up locations for talent to work remotely also lowered barriers to accessing more diverse and highly qualified talent pools.

Navigating global complexities and access to talent  

As retailers navigate how to be supportive of their employees that are on the front-lines while developing a separate, yet inclusive hybrid policy for their corporate employees – it is clear that remote work is not just something you can tack on but something that needs to be intentionally implemented.

Furthermore, it is well recognized that the talent market is incredibly tight at the moment. It is a seller’s market for high-caliber candidates, especially those with in-demand functional experience. Many of these talented leaders are resistant to relocating at the present time, given the uncertainty of the past two years. Companies and leaders who continue to be intentional in the demands they make of their teams, recognizing the difference between when presence is needed versus when someone is merely present, will have better access to the best talent. Recognizing that the needs and desires of employees have shifted and working to build policies, approaches, and protocols around these new priorities will enable organizations to attract and retain the best talent.

Conclusion

It has been over two years since the start of the pandemic and organizations have been through many iterations of working models. No one organization would state that they have designed a permanent solution. Some have benefited from better access to talent, others struggle with how to be flexible around flexibility. There are two key points that leaders should keep in mind: 1) norms are still evolving and organizations should keep innovating their approach, and 2) employees lives and attitudes towards work have changed substantially.

To be successful in the war on talent, leaders should lead with empathy and embrace a test-and-learn approach across technology and tools, development and learning, on-boarding and mentoring, and building culture. Organizations that embraced this early in the pandemic are now spending their time innovating and iterating, instead of setting (and re-setting) new dates for the return to the office.

Authors

Caitlin MacNamara leads Russell Reynolds Associates' Americas Retail practice. She splits her time between Toronto and New York.
Katelyn Schoenholtz is a member of Russell Reynolds Associates' Consumer Knowledge team. She is based in New York.

Sources

_{Reimagining the office and work life after COVID-19, McKinsey & Company, June 2020
The future of work after COVID-19, McKinsey & Company, February 2021
After COVID-19, work will never be ‘normal’ again, Berkely News, March 2021}