COVID-19: the changing dynamics and future of human capital management

COVID-19: the changing dynamics and future of human capital management

The first official cases of the deadly coronavirus were recorded in Ghana on March 12, 2020, from two individuals who had returned to the country from Norway and Turkey.

A pandemic that started in China’s Wuhan province, COVID-19’s dreadful impact on public health, economic and social systems has been felt deeply across the length and breadth of nations and continents around the globe (Asante & Mills, 2020).

In Africa, for instance, Asante & Mills (2020) notes major cities such as Lagos, Accra and Johannesburg recorded the highest number of COVID-19 disease cases in Nigeria, Ghana and South Africa respectively – altering their everyday social, economic and political lives.

According to a COVID-19 Business Tracker Survey conducted by the Ghana Statistical Service (GSS) in collaboration with the United Nations Development Programme (UNDP) and the World Bank and published on August 3, 2020, the tremor caused by the COVID-19 has had considerable impacts on the Ghanaian economy and businesses – forcing many organisations to cut costs by reducing staff hours, cutting wages, and in some cases laying-off workers.

Titled ‘How COVID-19 is affecting firms in Ghana – Results from the Business Tracker Survey’, results of the collaborative study between the GSS, UNDP and World Bank show that “46.1 percent of business establishments report that they reduced wages by 25.7 percent for their workforce (an estimated 770,124 workers)”. About 42,000 employees were further laid-off during the country’s COVID-19 partial lockdown. The pandemic also led to a reduction in working hours for close to 700,000 workers, notes the survey.

The COVID-19 pandemic, from the above, clearly illustrates the inextricable link between human health and organisational success: leading to the emergence of a complex and challenging environment for managers and human resource management (HRM) practitioners (Hamouche, 2021), who needed to find ingenious solutions to sustain their company’s business and help their employees cope with the challenges of this unprecedented situation.

Succeeding in these strenuous times as a company is almost impossible without well-established human capital governance frameworks; and companies with such well-oiled and bespoke frameworks are considered better investments, capable of creating more long-term value in this COVID-19 era. The pandemic is bringing a renewed focus on human capital and employees’ pay programmes in relation to employee wellbeing.

Hamouche (2021) argued that: “There are very few studies on the impact of COVID-19 on HRM, its challenges and potential opportunities for HRM in organisations; meanwhile, managers and HRM practitioners need relevant information that will help them to go through this crisis effectively and efficiently in order to allow them support their employees and sustain their company’s business”.

Human Capital/Resource and why it matters

Human capital or resource is considered an important factor in competitiveness and inclusive organisational growth. It is the stock of skills, competencies which the employees possess that are regarded as assets. Again, one can describe it as indefinable resources possessed by individuals and groups within a given population.

These resources include all the knowledge, talents, skills, abilities, experience, intelligence, training, judgment and wisdom possessed individually and collectively – the cumulative total of which represents a form of wealth available to nations and organisations to accomplish their goals.

In analysing the relationship between employee and organisation, two extreme standpoints can be distinguished (notes Marrewijk and Timmers, 2003).  According to them: “One school of thought claims that organisations do not exist (reification): there are only people (parts) working together to obtain specific goals. The opposite standpoint is the claim that separate human beings cannot function without a social context, such as an organisation, providing meaning to the life of individual employees.

Why does it matter?

Human capital is available to generate material wealth for an economy or a private firm. In a public organisation, human capital is available as a resource to provide for public welfare. How human capital is developed and managed may be one of the most important determinants of economic and organisational performance – thus Human Capital Management (HCM) must be considered one of the most important aspects of one’s business or organization, especially in this COVID-19 era.

If you cannot understand your employees, their needs and how they impact your business, your company will struggle to grow. One factor that makes companies great is the employees – hence effective HCM is critical in ensuring workers are happy, prepared and ready to tackle challenges which come their way.

“To retain the best people, organisational values need to meet the needs of existing employees so they feel fully aligned with the organisation’s vision, mission and values, and feel they can bring their whole selves to work,” (Marrewijk and Timmers, 2003) notes citing (Barrett, 2000).

In situations of a health crisis, like the current COVID-19, human resource managers must play an indispensable role in responding to the needs of workers as regards health and safety, but also handling issues of anxiety and stress “that are known to be exacerbated by the need for virtual work, long working hours, and the working conditions of the ‘virtual offices’, which are not always tolerable (Caligiuri et al. 2020; Roche et al. 2011) via (Gonçalves et al. 2021).

A better understanding of the pandemic’s impact at work and on companies has (Gonçalves et al. 2021 argues) “thus, become imperative to provide better guidance for individuals through this ever-changing situation.

What can be done to protect and invest in people beyond the pandemic?

  • Investment in Employees

There is no doubt that the financial impact on business due to COVID-19 has been immense, with almost daily headlines detailing how workers were being laid-off. Those lucky enough to be kept experienced low morale, as they had to grapple with salary cuts and many other negative developments.

In these challenging circumstances, one of the things management can do to protect and invest in employees beyond the pandemic is embark on wise investment aimed at preserving human capital.

Offering personal financial management education could be a relatively inexpensive way to start; also the introduction of health-based incentives must be considered, protecting the long-term healthcare cost of employees.

Again, management or employers must scout and look for various and alternatives ways to increase productivity as well as increase return on investment

  • Communication

Changes to the workplace environment and within organisations pose additional challenges to local leaders and managers to effectively lead their teams. On top of the day-to-day managerial tasks, leaders are responsible for establishing the organisation’s new direction, driving new changes, and managing internal and external stakeholders in this uncertain economic environment.

In addition to surmounting pressure, leaders are further expected to fulfil the aforementioned tasks both physically and virtually – this is where communication is crucial to organisational success. There is a business maxim that says: “When in doubt, over-communicate”. Communication is vital to all business organisations.

Lack of communication from leadership leaves employees to speculate about the future and creates insecurity. Proactively communicating with employees during these trying times builds trust and provides people with insight about potential changes on the horizon.

Choosing to err on the side of over-communicating rather than under-communicating while providing timely, transparent and clear information about the business, teams and individuals will often be appropriate in these circumstances.

Build a human-centric leadership culture – enhance employee-listening and enable human connection.

Leaders are responsible for establishing the organisation’s new direction, driving new changes and managing internal and external stakeholders.

In the absence of a physical work environment where the entire team is present, sharing similar physical and social contexts such as visual, auditory and informal information exchange requires more effort from leaders to align and integrate perspectives within and across teams.

Leaders will need to redefine, explore and iterate new ways to manage the business, teams and morale by actively developing empathy, trust and collaboration.

Employees need to see leaders ‘live’; and this might include weekly global town halls alongside smaller group meetings. Transparency and authenticity from leaders resonate.  It is good for employees to know that managers are also having to balance responsibilities, such as family and children, and there is no simple answer to those challenges.

Most importantly, a dynamic leadership assessment is required; beyond the normal structured annual or quarterly cycle, to assess how leaders are performing in the crisis – including pulse surveys to assess employees’ views – and provide the necessary support.

  • Employee pay: a focus on fairness

The COVID-19 pandemic expedited the speed at which organisations are changing their pay programmes through pay reductions, incentive resets and pay premiums. The crisis also reframed the way organisations segment their workforces to include essential and frontline workers. As it continues, organisations may need to consider long-term strategies to determine which changes will be temporary versus those that will be permanent.

In addition, serious conversations about racial injustice and fair treatment of all cohorts in society are raising further questions of whether pay programmes have other biases, beyond gender.

It is imperative, therefore, for managers of corporations and conglomerates to assess the effectiveness of their organisations’ fair pay strategies. The fairness of how pay practices and programmes are designed and administered will need to be a top priority, as pay issues can be symptomatic of broader talent diversity issues.

  • Future of work: fast-tracked

While the ‘future of work’ was well underway before the pandemic, COVID-19 has clearly hastened its arrival. Companies that expedited the future of work by fostering human capital into more efficient, agile and purposeful resources mitigated risk while sustainably increasing competitiveness and profitability during the pandemic.

COVID-19 has therefore provided managers and employers with an opportunity to recalibrate their organisations’ talent strategies (mid-and pandemic-adjusted era) to adapt to our evolving reality.

In sum, organisations must align new technology and skills or embrace technology for business transformation.

Organisations should link activities back to their workforce strategies by addressing the following:

Emerging areas requiring new talent by determining what I call the ‘build-buy-borrow-bot’ people strategies.

Evolving areas requiring new skills of existing talent through developing, reskilling/upskilling activities to ensure that the current workforce is well-prepared to grow with the organisation.

Declining areas resulting in a surplus of talent by assessing current skillsets, identifying skill adjacencies and determining alternate career pathways/redeployment opportunities within or beyond the organisation.


Asante, A.A. and Mills, R.O. (2020), “Exploring the Socio-Economic Impact of COVID-19 Pandemic in Marketplaces in Urban Ghana”, Vol 55, Issue 2, 2020.

Hamouche, S. (2021). Human resource management and the COVID-19 crisis: Implications, challenges, opportunities, and future organizational directions. Journal of Management & Organisation, 1-16. doi:10.1017/jmo.2021.15

Caligiuri, Paula, Helen De Cieri, Dana Minbaeva, Alain Verbeke, and Angelika Zimmermann. 2020. International HRM insights for navigating the COVID-19 pandemic: Implications for future research and practice. Journal of International Business Studies 51: 697–713. [CrossRef] [PubMed]

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