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December 10, 2021

Shifting Priorities: How Norwest Portfolio Companies are Responding to Today’s Changing Workplace

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“The only constant in life is change.” – Greek philosopher Heraclitus. Since the start of the COVID-19 pandemic, people all over the world have been forced to embrace change like never before. Companies large and small have felt the weight of uncertainty as they attempt to navigate a new office normal, including a tectonic shift to remote work and a slew of continually evolving federal, state, and local mandates that make even the most seasoned human resources veteran’s head spin. Although we were made the de facto subject matter experts, we all knew we were operating with no precedent to learn from.

Harnessing the collective knowledge and perspectives from across our portfolio of more than 200 active companies, the Norwest Portfolio Services team continually strives to address pain points that our portfolio companies are facing – including navigating through a pandemic! A pillar of our ongoing commitment to our companies’ success is our annual Talent & People Practices Benchmark Survey, a comprehensive review of how companies are approaching people operations, talent acquisition, organizational development, and systems. The survey results offer our companies a peek into how other companies foster culture, retain talent, and tackle shared challenges.

The sixth annual survey of North America-based portfolio companies, conducted in Q3 2021, surfaced several key takeaways, including the top five, broken down below.

1. Covid’s Effect on Remote Work Will Be Long-Term

53% of the portfolio companies we surveyed added (or already had) fully remote workers, and 14% said they closed all offices to go to a fully remote workforce. Looking at the full picture, only 7% of companies indicated they made no change in terms of remote work, with a whopping 93% of responding companies adjusting their remote work policy in some capacity.

The pandemic forced many employers to adapt to a remote-first workforce, and in doing so perhaps discovered something they weren’t expecting: employees were not only still productive while working from home, but productivity spiked in many cases, often creating an unanticipated challenge to work-life balance. One of my favorite characterizations of this phenomenon (that I can certainly relate to) is “I don’t work from home; I live at work.” While it is too early to tell what the remote work landscape will look like 5-10 years from now, it’s safe to say that heightened flexibility around remote work will continue to play out.

2. Geography-Based Compensation Adjustments Are a Contentious Topic

56% of responding companies indicated that they do not plan to adjust compensation based on employee geography, while 39% said they had plans to modify cash but not equity.

Undoubtedly a heated topic, tech companies weighed the options and came out on both sides of this compelling issue. Zillow announced it would do away with location-based pay, citing that an employee’s “long-term earning potential is determined by how they perform, and will not be limited by where they live.” Google, on the other hand, told employees it would cut salaries of remote workers to align with the cost of labor where the employee lives, with a few commute-based caveats.

While Zillow’s approach may be aimed, in part, at avoiding retention issues during this war for talent, a survey conducted by WorldatWork found that 67% of employees expected their compensation to reflect their geographic location. We don’t foresee this issue being resolved anytime soon, but we do expect employers to factor geography-based compensation into their recruitment strategies.

3. DEI Programs Are Front of Mind for 2022

Almost 50% of responding companies say that diversity, equity, and inclusion programs are a priority for 2022. DEI initiatives that our portfolio companies have already begun to implement include hiring practices (such as those that reduce unconscious bias); employee resource groups; and financial sponsorships of underrepresented minorities’ networking groups.

Norwest is committed to supporting our portfolio companies with achieving their DEI goals in 2022 and beyond. We have internal teams in place building out a strategy for hiring, wiring, and ways to support our portfolio companies, including aligning with external partners to offer resources and tools to strengthen DEI efforts across the portfolio. Norwest is also committed to working with values-aligned founders and entrepreneurs because we believe the best way to build great companies is to grow great leaders. We strive to ensure that our portfolio reflects the integrity of our worldview every day. Our work on DEI will continue, and we are ever committed to creating greater opportunities and impact.

4. Employee Perks Are Evolving

Employee perks that made an appearance in our survey results for the first time include a therapy platform, a charitable giving match program, and fertility benefits. Other perks and benefits that are popular among our portfolio companies include covering costs for continuing education, tuition, or other L & D activities (23% of respondents); health, wellness, and fitness-related stipends (22%); and WFH or home-office reimbursements (21%).

We were delighted to see portfolio companies adding therapy platforms as a health and wellness perk. A survey by the U.S. Census Bureau found that more than 42% of people reported experiencing symptoms of anxiety or depression, an 11% increase from the previous year. Norwest portfolio companies like Calm (an award-winning meditation, sleep, and relaxation app), Torch (an integrated platform for Learning and Development leaders to deliver, manage, and measure employee growth), and Talkspace (a leading virtual behavioral health company) offer a variety of technology-enabled health, wellness, and employee development tools.

5. Increased Equality in Parental Leave Policies

A growing number of portfolio companies are choosing not to differentiate between primary and secondary caregivers when offering paid parental leave, and 50% of companies we surveyed offer at least 11 weeks of paid time off to care for a new addition to the family.

As more companies remove the words “primary” and “secondary” from caregiver labels, it points to a larger overall trend that promotes equality for co-parenting couples, even as 79% of U.S. workers still do not have access to paid family leave.

Our survey results point to an encouraging pattern as Norwest portfolio companies focus on the overall well-being of employees, extending beyond the workday. Whether it’s a shift to increased autonomy with remote work or employee perks that highlight health and wellness, or inclusion-based parental leave policies – we are inspired and proud of the work our companies are doing to bolster culture and provide an equitable, family-oriented workplace.

Read a full list of the top 10 takeaways, and watch the video below to see my presentation and lively fireside chat with CMO and Operating Executive Lisa Ames. We delve deeper into the ways that our portfolio companies are navigating through workplace disruption and what factors will impact their long-term plans.

Further Reading

Here is some of the notable research that went into my presentation. They’re worth reading for more perspectives on the changing workplace.