The April 2020 Jobs Report from the US Bureau of Labor Statistics shows that the unemployment rate jumped to 14.7 percent, possibly putting the US in the deepest recession since the Great Depression. The report also shows a staggering loss of 20.5 million jobs, the largest monthly loss in recorded history. If this crisis is similar to those in the past, we can expect it to have a long-lasting impact on the economy and businesses. While many businesses will reopen eventually and millions will return to the workplace, we expect recovery will be far from complete for quite a while, especially for industries severely affected by social distancing (e.g., entertainment, hospitality, travel, and food services).¹

To gauge how organizations are reacting to the changing business environment in the context of their workforces, The Conference Board conducted an online survey in April 2020 with more than 150 human capital executives, mostly in large companies. Our accompanying chartbook shares the survey findings about remote work and the cost-reduction actions that have already been taken, as well as HR priorities for the recovery phase.

Insights for What’s Ahead

More employees are likely to work remotely after the COVID-19 pandemic. Postcrisis, remote working rates are likely to remain well above prepandemic rates. Less than 1 in 10 organizations in our survey indicated that the share of full-time US employees working primarily from home before the pandemic was higher than 20 percent. Now, 77 percent of survey respondents expect an increase in the number of employees working primarily from home (at least three days a week) a year after the pandemic. Occupation groups where remote working rates were highest prior to COVID-19, such as information technology and financial services, lend themselves to permanent high rates of remote working.

An increase in remote working could become the most influential legacy of COVID-19. We expect that remote working will become the norm, or at least a widely practiced solution, for many employers. In addition, there could be important implications beyond how we work. Fewer people are commuting to city centers for work during the pandemic; accordingly, spending on food services, retail, and other services in these areas will be harder hit than most other geographies. The lower level of spending in city centers is likely to persist even after COVID-19.²

Most employers have implemented some form of workforce cost reductions, and many plan to continue to do so in the next 1 to 3 months (May through July 2020). Through the end of April 2020, organizations responded to the crisis with actions that are easy to implement and reversible, such as deferring pay increases or bonuses, reducing hours worked, freezing hiring, and implementing furloughs. Less than 10 percent of organizations have already conducted permanent layoffs or implemented a major restructuring of the organization. However, these last two more drastic measures are likely to occur more often over the next three months for some organizations, and we expect some of the restructuring will occur during bankruptcy procedures. Not surprisingly, organizations that had declining revenues pre-COVID-19, or those not expecting to recover within 12 months, were already much more likely to use layoffs or major restructuring.

Some organizations are optimistic about recovery from COVID-19. With the background of the current catastrophic unemployment statistics, our respondents provided some optimism: 3 in 4 organizations in our survey did not plan to lay off any workers during the COVID-19 pandemic. And when the survey was conducted in late April, over 55 percent of respondents expected their organizational revenue to return to pre-COVID-19 levels within 12 months, a reminder that the COVID-19 recession will be devastating for the industries and small businesses most disrupted by social distancing, but perhaps less so for many other industries.Finally, organizations that had more employees primarily working from home (10 percent or more of their workforce) before the pandemic were more likely to self-report an increase in productivity during the pandemic.

Additional workforce cost reductions are more likely in organizations that employ primarily industry and manual services workers. These organizations have had more significant workforce cost reductions and are more likely to be forced to react to the new market conditions than organizations with a majority of professional and office workers. The latter are more likely to be able to keep operating in a more constrained environment by working remotely. Professional workers are also more likely to have unique skills or institutional knowledge, which makes it more difficult to adequately replace or rehire them when the economy improves.

Prior to returning to the workplace, over 85 percent of all surveyed organizations are prioritizing workforce health and office safety. Ensuring office preparation for return to work, creating a sequence and timing of return, and addressing worker health and safety concerns topped the list of priorities as organizations plan for a return to the workplace. Other important considerations include developing a policy for handling worker illness, reviewing travel policies, offering mental health and well-being services, and determining worker sentiment for a return to work.