In a post-pandemic world, we need a new social contract

Almost three years since the onset of COVID-19, pandemic-related disruptions have made us rethink so much of how we live and catalyzed great change in the workplace. Companies emerging from the pandemic entered a new world, where the metrics for measuring an organization’s effectiveness, competitiveness, and quality have shifted.

Over the past few years, employee wages have been steadily outpaced by inflated living costs–a divergence only exacerbated by pandemic-related supply chain issues and labor shortages.

Meanwhile, workplaces have struggled with COVID-19’s silent counterpart–a widespread mental health crisis worsened by the pandemic’s isolation, virus anxiety, and societal upheaval.

Across industries, the pandemic has also widened the digital divide and accelerated automation, requiring workers and employers to develop new skills and capabilities.

This week, leaders from across government, business, and civil society are convening at the World Economic Forum’s annual meeting to address global issues and find ways for us to cooperate in an ever-fragmented world.

The challenges facing today’s workforce must be a part of these conversations, as businesses come to terms with the lessons learned from the pandemic and work to transform their organizations to become more resilient and in line with the needs of modern workers.

Fair pay and the war on talent

In our post-pandemic world, it’s more important than ever for companies to develop new social and psychological contracts with their employees.

To reconcile the needs of their shareholders, their employees, and other stakeholders, many companies will need to create new ways to meet demands for profitability while still ensuring they’re offering competitive rewards and benefits that attract and retain great talent.

Forward-thinking companies will ensure they’re supporting employees’ physical and mental health, protecting their financial well-being, and preparing them for the future of work.

And employers will rethink their approach to work itself, continually asking the questions: How can we make work more flexible for our people? What barriers can we remove to make work more seamless? How can we overcome the obstacles that stand in the way of becoming a more agile organization?

In many cases, it will mean abandoning or transforming traditional work structures in favor of decidedly more fluid and flexible work models.

Mental health crisis

COVID-19 has also exposed the mental and physical toll work can exact on employees, especially as businesses continue to navigate hybrid work and employees deal with the aftershocks of the pandemic.

Prior to the pandemic, nearly 21% of American adults were already experiencing mental health challenges. Since then, pandemic-related disruptions have contributed significantly to employees’ ongoing mental health challenges, with several U.S. companies reporting indications of burnout.

With these compounding crises, companies must find ways to adequately address mental health concerns to avoid employee burnout and continue attracting and retaining talent, particularly as workers cite mental health support as an important factor in their future work and career decisions.

Most organizations have established support systems to address employees’ mental health concerns. According to Mercer’s Global Talent Trends report, 86% of surveyed businesses provided mental health support, including increasing accessibility to assistance programs, offering access to mental health apps, and providing on-demand virtual care.

Sufficient mental health benefits should take a holistic approach that considers the impacts of physical health on mental well-being. Measures such as predictable working hours, fair compensation, and flexible work arrangements, can all be utilized to support workers’ mental well-being.

Reskilling revolution

Pandemic-related disruption has also accelerated existing trends in automation and digitization, which requires both workers and employers to align with demands for new skills. According to the World Economic Forum’s 2020 Future of Jobs Report, required job skills are likely to change significantly over the next few years, with a majority of workers estimated to require reskilling by 2025.

As technology advances, providing workers with resources for acquiring new skills will become increasingly necessary for organizations looking to build agile, adaptive, and resilient teams with up-to-date capabilities.

Opportunities for re-upskilling, or “job crafting,” whereby employees can create their own job descriptions that are aligned with their skills, are also among the top demands for prospective employees. Companies looking to remain competitive in the labor market and attract top talent must adapt to these new metrics–and align with the needs of the future workforce.   

Fostering a culture that embraces continuous learning and providing employees with professional development tools and resources will be key to remaining competitive by avoiding outplacement, hiring, and knowledge-loss costs.

The nature of work has been changing since before the pandemic. Just as COVID-19 has permanently impacted our personal lives, it has also expedited these existing trends, and in many cases, increased their impact on today’s workplace.

To help create a fair and inclusive future of work, Mercer and a coalition of like-minded companies have joined with the World Economic Forum in the Good Work Alliance, a global cross-industry initiative leveraging private and public sector, academic, and civil society expertise and input.

While we may not have seen the end of COVID-19’s influence on our world, it has become clear that we cannot move forward without addressing the issues that have arisen from the last two years and adjusting our perspective on how to promote quality workplaces.

Martine Ferland is the president and CEO of Mercer, the world’s largest firm consulting on issues relating to workforce, retirement, and employee health.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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