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How has productivity and efficiency been impacted by the coronavirus crisis?

How has productivity and efficiency been impacted by the coronavirus crisis? 1

By Dr.Luke Carrivick, Research & Information Director at ORX, the world’s largest operational risk association.

To support its membership of over 100+ banks, insurers and asset managers with responding to the challenges posed by COVID‐19 (coronavirus), ORX has hosted two discussion calls each week where senior operational risk professionals meet to share insights, ideas and practice.

The consensus view is that productivity within operational risk through the crisis is as high, if not higher, than in normal times. Firms are managing to support specific crisis activity, but also maintain underlying essential management. In some cases, this has been made possible by finding more efficient streamlined ways of operating, or by prioritising the most value-add activities.

There is evidence that some institutions are beginning to restart longer‐term strategic activities that were paused during the crisis. A key question here is, are prior assumptions still correct, or do we need to re‐evaluate what is needed long term given the change that the pandemic has accelerated?

Despite an optimistic view of short‐term productivity, the long‐term sustainability is a concern for all organisations. Many are nervous about individual people risks, such as stress and wellbeing, and institutional people risks, such as recruitment and long‐term nurturing of talent, which are heighted as a consequence of working remotely.

Current priorities

  • Evaluating which practices or changes can be carried forward beyond the pandemic
  • Assessing and resuming paused and deferred activities
  • Assessing long‐term individual people risk, for example impact on staff wellbeing
  • Considering wider aspects of institutional people risk as a consequence of widespread remote working.

People risk within new ways of working

One of the key questions we addressed when discussing productivity and efficiency was whether the current operating environment, with large portions of the workforce working remotely, is sustainable moving forward. There was industry‐wide consensus that, while things have been working surprisingly well up to this point, it is not a sustainable model long‐term.

Where it works well – flexibility and focus

There are, however, some elements that can be adapted and kept. Several spoke to how the past few months have underlined that for some employees, working from home has actually increased their productivity – perhaps due to fewer distractions at home, shorter commute times, and more flexible work patterns. Several members concluded that there is a broader set of employees who could continue to benefit from agile working once the crisis is over.

Other efficiencies mentioned by ORX members include more disciplined meetings, where organisers are required to set an agenda in advance and carefully consider if the invitees are truly required.

More broadly, employees have been asked to think about whether a meeting is even necessary at all, or if email or instant messaging could function just as well.

Where it is a challenge – fatigue and engagement

For others, working from home has been a struggle. This can be due to other commitments such as childcare, or the lack of a routine separating work from personal lives, or simply missing the social aspect of working together and collaborating. A concern that was mentioned by several firms is the blurring of working hours, with meetings being scheduled very late in some cases, which did not happen when teams were working from offices.

Other downsides to the remote working environment include difficulties in implementing new policies that require employee buy‐in. It is tougher to sell a new idea over telephone or video conferencing since it is harder to gauge people’s levels of engagement.

Institutional people risk – longer term challenges

Dr.Luke Carrivick

Dr.Luke Carrivick

As well as the individual challenges and benefits of working in a more distanced way, there are also longer‐term people risks that institutions will face on how they will recruit, nurture, and retain talent.

Training and progression in a new environment

Some reported that training has proven to be very difficult in the current remote environment. It is more challenging to share knowledge with colleagues through the use of collaborative software.

Instead of asking for support from those around them, as employees would typically do in the office, there is now a need to schedule meetings for when colleagues are available. There is also an increased dependence on experienced employees to provide guidance, as well as support business as usual activities.

Progression and nurturing have also been hindered with a lack of networking and limited training opportunities. There is a risk that there is a perception that career opportunities may be limited for employees that choose to work from home instead of going into the office, which could lead to contradictory incentives when returning to the office in a phased approach.

Recruitment and onboarding

Participants reported mixed experiences of recruitment during the crisis. Several were pleasantly surprised at how quickly new senior employees fitted into a virtual team.

However, being physically present in the recruitment process goes a long way in getting to know prospective employees, and gauging whether a prospect is the right fit for the organisation.

Members agreed that being visible during the remote working recruitment process can partially offset these challenges and improve the prospects of a candidate. Once a new starter has been visually introduced, it is much easier for them to integrate into the team.

Due to capacity constraints, some recruitment cycles have been paused or shortened, which includes certain internship programmes.

Reaching a turning point

So far, institutions have deferred some strategic activities to prioritise more immediate business continuity and client facing activities. However, there is a sense that several are reaching a turning

point and are now looking to start, or re‐start, longer‐term IT projects and operational risk framework change activities.

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