What will life be like for business once the coronavirus crisis is over?

This article is from FRA's sister company, Compliance Week.

Experts predict companies will finally embrace remote workplaces, because they will see that the advantages outweigh the drawbacks.

“Technology has allowed us to operate in a world that seems smaller, even smaller than it did during 9/11,” said Jim Casella, founder of Compliance Solutions Strategies and a serial entrepreneur. Many companies, he said, may consider keeping at least part of their workforce working from home, even after stay-at-home orders are lifted. He said, “They’ll be asking themselves, ‘Do we need to pay rent on an office? Could we keep operating remotely?’”

Casella said some smaller companies could convert to completely virtual, with all employees working from home. Reducing expenses like rent could help small, nimble companies keep their current employees and perhaps even find new ways to take advantage of being virtual.

Already, online-only companies are enjoying a huge advantage over more traditional companies during the pandemic, particularly in the retail industry, according to Wall Street Journal story. Advantages of remote work for other industries will become more apparent the longer the pandemic lasts.

But while more employees working remotely may cause businesses to reassess the need for so much brick-and-mortar real estate, it also creates new risks, particularly revolving around data privacy and cyber-security.

“There’s no playbook for this. No living generation has experienced a pandemic,” said Keith Darcy, a compliance consultant. “Businesses need to continually assess what are the most sensitive risks and figure out what they need to guard against.”

Productivity of remote workers has long been a concern among corporate leadership. But there are more tools than ever to measure the productivity of a remote employee, and more ways for managers to check in, assess, and redirect the work of remote employees, he said.

“There are so many good examples out there of what works. Seek them out,” he advised.

Preparing for a ‘second wave’

One thing businesses are going to have to figure out in the near term is how to deal with what some are calling the “second wave” of the pandemic. In a Compliance Week survey of 365 compliance professionals, only 24 percent said they do not have a plan in place to handle a second wave.

But compliance professionals who said their companies stumbled during the first phase of the pandemic, with self-described “poor” or “very poor” performances, said they are probably doomed to repeat their failures in the next wave. Over half of these companies (51 percent) reported that they do not yet have a plan in place to handle a second wave.

Conducted from March 24-26, the survey captured a moment in time for the coronavirus pandemic, which began in December 2019 in Wuhan, China. Over those three days, 130,000 new coronavirus cases were discovered worldwide, according to the World Health Organization. About 10 days later, the number of cases has ballooned to more than 1 million.

Now is the time for companies unprepared for the first wave of coronavirus infections to pick themselves up, gather the pieces, and prepare for the next wave, compliance professionals said.

“One of the things we’ve learned is that there is an arc to every crisis,” said Darcy. “We need to distinguish what was, what is, and what will be. And the ‘will be’ is changing right in front of us, every day.”

Charles Senatore, a former risk oversight manager at Fidelity Investments who retired last year, said the firm’s preparation for the first wave will “serve us well in the event of a second wave, particularly if the second wave can be mitigated by increasing test availability and benefit of learnings from the first wave.”

But all respondents to the survey did not agree on when operations might return to “normal,” or when this “first wave” will finally ebb. Thirty-four percent said two to three months, while 29 percent said three to six months.

“I think companies are holding up very well, all things considered,” said Casella. “Basically, the whole world shut down. Who can really be prepared for that? Returning to normal is going to be difficult, maybe impossible. It’s going to be a process, and it won’t be resolved in weeks, it will be months or more.”

More value for compliance?

According to a recently released study by the Enterprise Risk Management Initiative at North Carolina State University, 42 percent of 563 companies surveyed have hired a chief risk officer, up from 32 percent five years ago. The survey is based on data collected in the fall of 2019.

Among the NC State study’s key findings are that “most respondents perceive a much riskier business environment now compared to five years ago. COVID-19 has probably increased that perception exponentially for most business leaders.”

The study also found that few executives would describe their organization’s risk management process as mature. “COVID-19 has most likely highlighted even more limitations in their organization’s risk oversight capabilities than previously considered,” the report said.

Over the past decade, the compliance industry has grown in importance, compliance experts said, buoyed by dramatic and varied changes in the regulatory space, record penalties for transgressions, and outside forces demanding more accounting of an organization’s risks. The trend has moved compliance officers up the corporate ladder in terms of status and pay.

The pandemic will continue to raise the compliance industry’s profile, but for a different reason. This time, its value will be proved by its advice and guidance in areas of enterprise risk management and business continuity plans, said Carrie Penman, chief compliance officer at NAVEX Global.

“I suspect we will be judged on how well we all collectively rise to the challenge,” she said.