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April 7, 2020

How Does COVID-19 and a Remote Workforce Impact the Future of Employee Engagement?

MHT Partners  | Business & Information Services Investment Bank

Many people claimed that 2020 would be the year of the distributed workforce. In the wake of unprecedented events in modern history, even the most optimistic believers could not have anticipated that the majority of the country would be currently working remotely. With COVID-19 rapidly spreading across the nation, leaders in the public and private sectors have been left with no choice but to require employees work from home. Prior to the crisis, a mere 3.6% of the U.S. workforce worked at home half or more of the time. Preliminary estimates show that as a result of COVID-19, anywhere from 25-30% of the U.S. workforce will continue to work remotely at least half of the time(1). What was once purely a social experiment, a distributed workforce may now be the reality for a number of Americans.

A typical employer can save approximately $11,000 per year for each person that works remotely half of the time(1). Thanks to workflow and communication tools offered by providers such as Microsoft(2) and Zoom(3), employers have quickly harnessed the power of technology in the transition to and adoption of a remote work environment for enhanced productivity. As the distributed workforce becomes more broadly utilized, the nation’s employers, particularly small- and medium-sized businesses (“SMBs”), will also need to maintain strong employee engagement and recognition programs to continue fueling productivity. For this reason, MHT believes that employee engagement and recognition providers will see increasing demand for the design, implementation, and management of tech-enabled solutions that ensure employees remain connected to both the social and productivity aspects of working in a remote environment.

Research has shown that companies that successfully engage employees achieve earnings-per-share growth that is more than 4x their peers(4). The social aspect and comradery of the workplace is important to employees and is one of the main drivers of producing meaningful work. However, establishing engagement and recognition programs for a distributed workforce presents materially different challenges than an in-person program. Managers might not know how to organize and lead a remote workforce, employees may be less recognized for work done remotely, and it may be more difficult to accurately assess the productivity and overall sentiment of a distributed workforce.

Similar to outsourcing workflow and communication needs, SMBs can outsource all engagement and recognition needs to tech-enabled providers instead of spending unnecessary time and money on developing a program internally. Providers such as ITA Group(5) and Workstride(6) offer a suite of cloud-based software solutions, including the design and implementation of a virtual community through social communication channels directed at engaging employees in a non-work environment. Additionally, the providers offer a platform for peer-to-peer employee recognition and a website to redeem rewards from the recognition earned. Even more compelling, the providers offer analytical platforms and reporting dashboards that track workforce mood and engagement through pulse surveys, crowdsourced data, and company assessments. Taken together, employee engagement and recognition providers offer a unified, holistic set of solutions to managing engagement and recognition for a remote workforce.

MHT welcomes the opportunity to discuss how the influx of demand for distributed workforce solutions will continue to draw investment interest from strategic and financial parties for employee engagement and recognition providers. Please contact Mike McGill (mmcgill@mhtpartners.com) or Kevin Jolley (kjolley@mhtpartners.com) for more information.

(1) https://globalworkplaceanalytics.com/work-at-home-after-covid-19-our-forecast
(2) https://www.microsoft.com/en-us/
(3) https://zoom.us/
(4) Source: https://news.gallup.com/poll/241649/employee-engagement-rise.aspx
(5) https://www.itagroup.com/
(6) https://www.workstride.com/

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