Pandemic effect on Human Capital

It has been said that there are decades where nothing happens, and there are weeks where decades happen. This could not be more apt today.  The pandemic has disrupted the global HUMAN CAPITAL environment, and organizations are facing particular challenges related to: talent flow; the managing of two generations of employees, viz., older or mature workers and younger workers; managing Gender/Diversity balance, and a shortage of needed competencies. It has also sped the arrival of technologies and new ways of working and learning, moving organizations almost overnight into a new era. 

The topic of Talent Management has received a remarkable degree of interest. This represents a paradigm shift from more traditional human resource related discussions, towards the management of talent specifically suited to today’s dynamic competitive environment. An organisational talent management strategy has activities and processes that involve the systematic identification of key positions which differentially contribute to the organisation’s sustainable competitive advantage.  The development of a talent pool of high potential and high performing incumbents. And the development of a differentiated human resource architecture to facilitate filling these positions with competent incumbents and to ensure their continued commitment to the organisation. CEOs explicitly argue that talent management was too important to be left to HR alone, and identified talent (HUMAN CAPITAL) management as the main challenge in this dynamic new era.

Along with Talent/Human Capital Management, Research shows that Compensation and Job Satisfaction are interrelated. Gender/Diversity has been shown to influence the relationship between compensation and job satisfaction; and the overall productivity. In addition, compensation and job satisfaction have been shown to play a role in outcomes such as work motivation and performance. It is necessary to revisit some common relationships while exploring and adding clarification to other potential factors of satisfaction. Specifically, to differences in earnings across various sectors for the same role, such as middle management roles in F&A vs Data Center. 

In conclusion, the pandemic & the findings of this study will lead to additional questions for each organization.  What is the true relationship between Talent Management & Higher earnings levels and Job Satisfaction? What is the effect on productivity of an unbalanced Gender/Diversity profile?  Is attrition based on better job offers (pay or different role); or is it based on other factors?  What is the impact of WFH/WFA on productivity, morale & team spirit? 

In the deepest crisis are born great opportunities. This is such a moment- In weeks to come, decades can happen. 

The Risk of WFM – Working From Home

Facebook, Fujitsu, Nationwide, Otis, Siemens, Twitter, and other major companies have announced that large portions of their workforces may or must work remotely from now on. It saves money and may increase productivity, managers say. Many employees prefer it. A recent survey by Korn Ferry found that 64% of workers feel that they’re more productive at home. 

But a group of hyper-successful contrarians—Apple, Amazon, Goldman, Google, and others, have pointedly not offered the indefinite WFH option. They want employees back physically together. Considerable evidence supports their stance. It also shows that when employers offer indefinite WFH, they’re messing with something more powerful than they may realize.

Some closings are imperative for public health. But employers who have a choice should keep in mind that the costs of WFH are high and may not be obvious.  The stiffest penalty may be lost creativity and innovation. Every company is desperate for good ideas in this environment, and it would be hard to design a worse policy for finding them than unnecessarily requiring or encouraging employees to stay apart.


Creativity and quality of teams’ ideas were rated by peers on a scale of one to five. The results show strikingly what a deeply human experience it is to be creative in a group. The more that group members faced each other, the more creative their output was. The more they looked into each other’s eyes, the more creative they were. The more willing they were to confide in one another, the more creative they were.

Facing each Other, looking into the eyes, confiding—all those behaviors reflect and build trust. The researchers measured trust within the groups and found that it was crucial to the whole process. Their conclusion: “There is no substitute for face-to-face interaction to build up this trust.” 

Those high-achieving contrarian employers have understood all this for years. For example, Google’s free top-quality cafeteria meals aren’t merely a perk. They’re a way to bring together employees who might otherwise never see each other, and to make them wait in lines, where they’ll talk. Long, narrow cafeteria tables increase the odds of sitting next to or across from—and thus talking with—strangers. Such chance interactions are where successful innovations often originate. Gmail, Google News, and Street View came from engineers chatting at lunch.

Apple’s Steve Jobs obsessed over face-to-face meetings. There’s a temptation in our networked age to think that ideas can be developed by email and iChat,” he told WalterIsaacson, author of a bestselling Jobs biography. “That’s crazy. Creativity comes from spontaneous meetings, from random discussions.” When asked by Fortune to recount the birth of the iPhone, Jobs said the earliest ideas arose from informal gabbing: “We all had cell phones. We just hated them, they were so awful to use.” That “watercooler talk” is the “one part of the iPhone mythology that everyone tends to agree on,” author Brian Merchant reports in his book ‘The One Device’.


Shaking hands is literally an electric experience: Brain imaging shows that we energize the region associated with reward sensitivity—that is, we feel rewarded—by shaking hands, or merely by seeing other people shake. 

There is a similar physical response when we converse with someone face-to-face. The pupils of our eyes constrict and dilate in parallel with the other person’s. Neither of us is aware it’s happening, but it builds trust. When we’re physically together, we unconsciously mimic one another’s posture, gestures, and tone of voice, which builds trust and empathy.


Togetherness is in our deepest nature. Michael S. Gazzaniga, a leading researcher in cognitive neuroscience was asked what’s being lost as millions of workers remain at home, he says: “The feeling of connection and being a member of a team, and all the incidental conversations and nonlinguistic cues that get people on the same page and aligned, as well as the serendipity that is the source of most innovation.”

Companies adopting large-scale indefinite work-from-home policies will certainly save some money—an important consideration now—and they may get along just fine for quite a while. The downside will accumulate only slowly and will be harder to appreciate fully. What these companies gain can be quantified much more easily than what they lose. But while they may take time to show up on the P&L, the losses could be much greater.

Excerpts from Fortune Magazine August/September 2020