The pandemic offers an opportunity to build fairer societies and economies by investing in people: IMF's Kalpana Kochhar

Kalpana Kochhar was appointed Director of the Human Resources Department (HRD) at the International Monetary Fund in June 2016. Prior to that, she was Deputy Director in the IMF's Asia and Pacific Department. Between 2012 and 2014, she was Deputy Director in the IMF's Strategy, Policy, and Review Department.

Before starting her career at the IMF, Kochhar was Assistant Professor at George Washington University. She then joined the IMF’s Economist Program in 1988, assigned to the Asia and Pacific Department (APD). She worked on various country assignments in APD for six years before moving to the Strategy, Policy, and Review Department (SPR). In 1997, she returned to APD, where she was promoted to Assistant Director in 2003. While in APD, she led work on Japan, India, Sri Lanka, Maldives, Bhutan, and Nepal, and has also covered China, Korea, Malaysia, and the Philippines.

In 2004, Kochhar moved to the IMF’s Research Department (RES) as a Senior Advisor, working closely with then Chief Economist Raghu Rajan, before returning to APD in 2008. In 2010, she left the IMF to join the World Bank as Chief Economist for the South Asia Region. She returned to the Fund in 2012, joining SPR as Deputy Director to lead work on the Triennial Surveillance Review, and then moved back to APD in 2014.

Kochhar also has extensive institutional experience. She served as Senior Personnel Manager in RES for two years, and again in APD during the downsizing of the IMF in 2006–08. She is currently a member of the Diversity Council, and also serves on the personnel Review Committee—appointments she also held before her move to the World Bank.

She currently leads the Fund’s work on jobs and growth and has conducted groundbreaking research on gender inequality and its impact on the macro-economy. She will continue to co-lead the Fund’s work on gender from HRD.

Here are the excerpts of the interview:

The COVID-19 pandemic, which started as a health pandemic, seems to have long-lasting ramifications to the way we live and work. How do you see the impact of the pandemic on our lives and the global business scenario? Isn't a whole new ball game?

Indeed, this is a crisis like no other. The human costs of this crisis are immeasurable, but we can measure the economic fallout. From the start of the crisis until the end of 2021, the world economy is projected to face a cumulative loss of more than $12 trillion—equivalent to the combined annual output of Japan, Germany, Italy, and Spain. It is a dramatic loss.

Many countries will be deeply affected by the economic scars of this crisis.

In some countries, more jobs were lost in March and April this year than were created since the end of the global financial crisis in 2008.

School closings also impacted people’s ability to participate in the labor market, especially women. Bankruptcies also are becoming more common as firms exhaust their cash buffers. And human capital is at risk: the education of over a billion learners across 162 countries has been disrupted, for example. 

The bottom line is that the pandemic is likely to increase poverty and inequality, further painfully exposing the precariousness of work and the challenging prospects for the young of accessing opportunities they desperately need.

As countries struggle to keep their economies afloat in the midst of a global recession, how is IMF helping countries address the economic impact of Coronavirus?

At the IMF, we acted swiftly from the moment we saw this crisis coming. We have provided emergency financing on an unprecedented scale. We have already disbursed over US$30 billion to 75 countries (as of September 2). Never before have we done so much so fast.

Our total lending commitments are about $270 billion (as of end-July), with one-third approved since end-March. And we have an additional $730 billion in lending capacity that we could put at the service of our membership. Also, the IMF has approved immediate debt relief to all of our poorest members. We have continued with our important surveillance work—meaning we take the pulse of national economies and the world economy as a global public good. During the crisis did two new things—very fast. 

First, we merged epidemiological projections with our traditional macroeconomic modeling—so that we can project the likely developments of this crisis. We did our global and country-by-country projections in April, and these have been updated in June. 

Second, we created a new global and country-by-country-surveillance of measures countries have taken to respond to this crisis. So, for 193 countries, policymakers can immediately compare their actions to those of their peers. This is a transmission line of learning that we have heard is very valuable. It is being updated to included measures countries are taking to reopen safely and effectively. 

The pandemic has brought to fore the vulnerability of millions of employees and businesses across the globe. How can we together step up to resolve the problems especially the mounting job losses exposed by the crisis? How we protect and lift of those vulnerable and hardly-hit by the pandemic.

Across the world, countries have ramped up economic lifelines to individuals and workers. These safety nets must be maintained as needed and, in some cases, expanded: from paid sick leave for low-income families, to access to health care and unemployment insurance, to broader cash and in-kind transfers for those in the informal sector—with digital mechanisms often best for delivery. Encouragingly, countries with higher inequality have devoted larger shares of support to households, including vulnerable groups. 

The crisis will be transformational. Many jobs lost will never come back with the crisis triggering long-lasting changes in spending patterns. So, workers must continue to be supported, including through reskilling, to help them move away from shrinking sectors and toward expanding ones. 

As governments ramp up spending to support individuals, businesses, and communities, there is an opportunity to build fairer societies and economies by investing in people. That means spending more and spending better on schools, training, and reskilling. It means expanding social programs that are well-targeted to reach the most vulnerable. And it means empowering women by reducing labor market discrimination. 

The COVID-19 pandemic gripping the world has an especially devastating impact on women workers. What measures can we take that have a positive impact on them?

As I mentioned, women are one of the particularly vulnerable groups. For many women, teleworking is not an option, which makes them unduly exposed to the risks of the virus and the economic fallout. One reason is that women are more likely than men to be working in service sectors, including tourism, hospitality, and healthcare. These sectors, in most cases, require face-to-face interactions and are being hardest hit by the pandemic. Also, women disproportionately have lower access to technology, which puts them at a disadvantage. Another aspect that makes women vulnerable is that they do much more unpaid care work, which has increased with the pandemic. 

Women already make up the majority of the poor of the world. With the pandemic, they are more vulnerable to falling further into poverty. We made great gains in gender equality over the last two or three decades. But now we are at risk of undermining quite a lot of those gains and may even lose them. So, it is important to put in place policies that handle not just the health crisis, but also the post-crisis recovery that would help maintain or even advance those gains. We need measures that have a positive impact on women—for example, the provision of parental care and other leave policies. Now in many countries, public and private sectors are rethinking these policies. These are among the lessons that come out of this crisis.

A lot of experts today talk about adaptability, resilience, and agility in the context of the new workplace we all are in. How do you see the new normal both as an economist and as an HR leader?

We had spoken in the abstract about resilience and agility. But I would say that most organizations really started to practice what we had preached from mid-March when we had to change how we function almost overnight.

Speaking for the IMF, the speed with which we adapted to this new reality—not only in HR but across the institution—was truly remarkable. Of course, like everyone else, being in a virtual environment does come with downsides, including on relationship building and the spark of creativity. But I would dare to say that our productivity and efficiency have gone up. 

Like many other organizations, the IMF is seizing the opportunity to embed this as a new way of working. As you can imagine, here HR is playing a key role. For example, flexibility is in need given the difficult situation of schooling and childcare. So HR is working on social contracts between managers and staff on when and how they work in a flexible environment. Even if schooling and childcare were to go back to the pre-COVID period, we would still want to maintain this aspect of flexibility and have a greater focus on the quality and timeliness of deliverables rather than measuring hours worked or face time. 

How did you see the role of HR and talent managers as an economist in business transformation? And how do you see it today as an HR leader?

Since a lot of the new ways of working have to do with behaviors, HR is really ground zero for suggesting how things could be different. We see ourselves as a catalyst who sets policies, gives guidance, and provides incentives. 

But in the end, the behavior change has to take place across the institution. The actual success of new ways of working—including how people interact, deliver, and balance work and life—are in the hands of every single person of the organization. There needs to be a high level of trust between managers and employees and also transparency and clarity in communications between them. 

HR leaders have specific roles to be forward-thinking and forward-leaning to push the institution to move even further. And we also need to keep our eyes open on others and adopt the best practices relevant for us. And most important of all, we need to keep our eyes on our staff to make sure that they are coping well with the situation and to offer them options and opportunities to take care of themselves physically, mentally, and emotionally, especially when the frequency of face-to-face interaction is lower than before. 

To come out stronger from the COVID-19 crisis, there is a growing emphasis on workforce upskilling and reskilling. How do organizations decode the new-age learning techniques to equip employees for the larger digital transformation?

Indeed, workers need to be trained in different ways of working. We are very fortunate in the IMF to have a highly educated workforce, as well as good technology and connectivity, especially in headquarters, where most staff work. As we adapt to the new ways of working, we are thinking about how we can support staff not just in an interim way, but in a more permanent way—for example, by equipping them with home offices that allow them to maintain a high level of efficiency and productivity.

Separately, well before the COVID hit, we had embarked on a wide-ranging set of modernization initiatives in the IMF. This was not merely a technology upgrade, but also an improvement in the efficiency of our business processes. These projects touched almost all aspects of the IMF's work, including human capital management, the delivery of capacity development to our member countries, and the collection and dissemination of our knowledge and data. All these modernization initiatives will come together to create an integrated digital workplace, which is intended to be modern, secure, and fully mobile-enabled so that people can collaborate and work with each other from anywhere at any time. Despite the increased workload in meeting the demands of our membership, we are pushing ahead with these modernization initiatives because we believe that it will stand the IMF in very good stead both during the crisis and afterward, by laying the foundation for us to emerge from this situation stronger and more agile. 

The unfolding crisis brings with it profound lessons for the future of work. Working from home, for instance, is going to grow beyond its pre-COVID-19 norms, as many experts say. What's your take on post-pandemic trends like remote working, flexi hours and how will they impact the future of work?

Organizations are looking to turn the lessons they had been forced to learn into something that would bring benefits. For example, we have had policies on the books for a very long time to enable staff to work flexibly, in terms of the days of the week, hours of the day, part-time work, and job sharing. But they had been used very little in the past, partly because of the feeling that people who chose to work at home would be seen as less committed. Our new way of working during the pandemic has proven this false and largely removed the stigma of remote working. We hope we can carry the new mindset over to the future, where your performance is based on your deliverables, rather than where and when, and for how long you work. 

Teleworking means that we have to work harder to develop personal relationships. Managers need to go above and beyond to check in with their staff, look for signs of any distress or pressure they may face, and try to alleviate these stresses. It also means there should be planned opportunities to build team spirit, cohesion, and to jointly spark innovation and change.  Going forward, we will likely move into a hybrid mode, where some individuals would come into the office in the traditional way, some would work primarily from other locations, and some would choose a way in between. I am hopeful that we will be able to land a good, balanced model for how we work in the future.

It's widely acknowledged that organizations pursue diversity and inclusion not just for ethical reasons, but also to realize enhanced business results and better financial performance. But why is the ground reality not changing much and why are CEOs and boards not taking cognizance of this?

Since IMF is an international organization, we are required by our Articles of Agreement to have staff of a broad geographical representation. So in a way, we are enjoined by our founding agreement to have a diverse workforce. 

But even an organization like ours has work to do on diversity. For the past 15 years, we have sensitized the institution about the importance of diversity in various dimensions. Our clients are the entire world, so our staff also need to look like the entire world to have credibility with our membership. Because of these efforts, I am happy to say that the business case for diversity is no longer in question in the IMF. 

Several years ago, we started to set diversity benchmarks for certain groups of staff where we wanted to see an increase in representation.  These benchmarks include gender representation across the institution, gender representation in management roles, as well as representation by geographic region. In particular, we identified regions that are underrepresented and have been working to improve representation from those regions. 

In the IMF, attention to diversity actively features in every step of the talent process from recruitment to internal promotions and other aspects of career development.  We have even further strengthened the incentives by having all our departments submit action plans for the next three years to improve diversity and inclusion, and have set up mechanisms to hold the leadership accountable to achieve these plans. 

Like everyone else, we have work to do on unconscious bias, or sometimes even overt bias, about the different skills that different people bring. Also, as an institution, we have to continue to talk openly about race and racial injustice. I'm very proud to say that since May, we have embraced the opportunity to bring in experts from outside to educate us about the basis of racial tensions in the United States and elsewhere in the world. There is a firm commitment in the IMF to continue that education process. More than that, there are conversations in departments and smaller teams about race, bias, and privilege. I am grateful that we have opened that space for people to talk about their experiences so that we all understand what others may have experienced and that strengthens our commitment to do whatever we can to prevent such actions from continuing. 

COVID-19 seems to be accelerating digital transformation in the workplace across industries. Do you see a new tech infrastructure in the making that will help economies rebound after COVID-19?

Those who have access to technology—the so-called white-collar workers—have been able to work from home and are better off during the pandemic. So what role can technology play in the future? There will always be roles where some jobs lend themselves to benefiting from technology more than others. But even in the roles that require more face-to-face contact, technology can help. For example, many of us are now visiting doctors virtually. Tech companies can play a huge role in spreading digital infrastructure, access to devices, and access to content. They should be incentivized to expand access including in developing countries.  In fact, this is in their interest, because it can create more consumers for their services. If we can broaden technology infrastructure for better access to finance, healthcare, education, and information, that would be a game-changing possibility in the world ahead. Also, building and more creatively using more digital infrastructure has the potential for building a more climate-friendly economy. We have heard the slogan “Building Back Better”. I think the goal of universal access to digital technology will be the cornerstone of that strategy.

How do you see the overall role of HR and people managers evolving amid the pandemic? What is your advice for global HR and talent leaders as they prepare for the post-pandemic world?

The first attribute has to be humility. Nobody knows what's ahead. Leaders need to have humility, courage, and self-confidence to admit that we don't know. Leaders also have to promise to do several things. The first is to communicate clearly and often, about what we do know, and what actions we will take to address the uncertainties we face.  Second, leaders need to have the courage to make decisions without complete knowledge of what the future holds but also to be agile in pivoting and adapting as new information becomes available.  

We will be the ones who push managers and leaders throughout our organizations to think positive, to push past the old practices even if they had been successful, and to keep people at the center of the whole exercise. This pandemic has shown how vulnerable we all are. So, for whatever we do, we should keep in mind that people are our biggest resource while balancing it with serving our clients. In the end, we cannot serve our clients well if we don't serve our staff. That is why HR becomes central to the whole effort, even if it is not the only ingredient. 

Also Read: Companies that succeed amid COVID-19 will be those that prioritize people: Walmart’s Donna Morris

Read more such stories from the October issue of our e-magazine on 'Reimagining Workplace Learning'