Significant unemployment recovery due to the Covid-19 crisis is expected to begin in 2022, according to the Organisation for Economic Co-operation and Development (OECD). Besides, technological advances are calling for new roles while debilitating others.
Covid-19: Work in crisis
The pandemic measures, such as cessation of business operations, have shaken the labour market globally, not long after its recovery (in some countries partial) from the 2008 financial crisis. Between March and April 2020, almost 55% of the world's economies shut down all but essential businesses. A year later, very few countries are allowing businesses to operate as they were before Covid-19. As we speak, some of the world's biggest labour markets such as the UK, Germany, France, Spain, and Canada are under strict lockdowns.
Covid-19 has led to the formation of three groups of employees: essential workers (e.g., health workers, medical equipment manufacturers, agriculture workers, and supermarket employees); remote workers, and displaced workers who may face long-term unemployment or return to their work, often under less beneficial conditions (e.g., a lower payment, smaller or none package, etc.). Currently, displaced workers are mostly encountered in the Covid-19 hardest-hit industries: travel, hospitality, tourism, and retail.
Remote and hybrid work
One of the most blistering effects of the pandemic is the instant adaptation to remote work with precipitous work-from-home arrangements. Without warning, ready or not, millions of people turned their homes to offices, and started coming face to face with unprecedented practical and mental health challenges. Hence, employers are sceptic about the efficacy of remote work in the long run. Some of the questions that come forward are: “How are cross-functional collaboration and communication maintained when the majority of employees work remotely?” and “What is the work environment at home for parents whose children also study from home?”
According to the World Economic Forum, 44% of employees can work remotely, whereas 24% cannot perform their current role unless physically present in their work environment. Under the existing circumstances, it doesn't surprise that the global job market vision and mission is to increase the percentage of remote employees. The trend won't find resistance in high-income countries. However, developing economies and countries with limited internet access cannot catch up with the meteoric rise to remote work. Disparities are also observed within same-scale economies but different roles. For example, the finance, information, and services sectors show themselves docile to the influence of remote work. On the other hand, the hospitality, retail, construction, and transportation sectors cannot find their way around remote work, and workers face higher risks of unemployment.
Governments' support
For the past year, governments have been taking action to prevent a Covid-19 work crisis turning to a social crisis. Germany and Italy have established unfixed job retention schemes and wage support measures for employees who cannot go to work due to lockdowns. While these measures are meant to stop unemployment levels from rocketing, we cannot say with certainty whether unemployment rates will remain stable when the assisting measures are lifted.
Japan has made access to the Employment Adjustment Subsidy more manageable by reducing restrictions and requirements for businesses. Lost working hours due to Covid-19 are paid fully to small and medium-sized enterprises, and non-regular and uninsured employees are also covered. In the United States, short-time compensation schemes (not to be confused with the unconditional Paycheck Protection Program) are in place, but their efficiency is dubious due to administrative blockages, lack of awareness, and weak financial incentives. Unemployment in the US is currently much higher than before the pandemic, but not because job seekers are more than the job openings. Many unemployed people aren't actively looking for work either because they expect to regain their lost jobs or because of the lack of childcare. Hence, women are participating less in America's labour force, as well as people aged 65 and above, who fall into higher Covid-19 risk groups.
Online learning and workplace training
According to the World Economic Forum, there has been a severe increase in demand in personal development, well-being, and self-management (e.g., mindfulness, meditation) online courses from employed people. Unemployed learners prefer courses related to data analysis, computer science, and information technology.
Regarding training at work, employers are mostly relying on internal departments and in-house coaches for informal training and online learning platforms to maintain physical distancing. Ninety-four per cent of business leaders who participated in the World Economic Forum's survey reported that they expect employees to upskill and expand their capabilities while doing the job. Two years ago, the percentage of employers who held this view was 68%. Official training on new skills is endorsed for jobs that require the use of technology.
The future of the labour market
Technologies are the cornerstone of labour market changes. The implementation of cloud computing, e-commerce, and data analytics is not that new. However, according to the World Economic Forum, more and more companies are leaning towards artificial intelligence (AI) and robotics. Depending on employees' roles and skills, some workers will be more likely to lose their jobs due to new technologies. On the other hand, new task-specialised and tech-related jobs will pop up. In any case, some roles can (still) be performed only or better by humans, and these are management, advisory, communication, and decision-making roles.
The industries with the most emerging occupations are the automotive industry, e-commerce, renewable energy, FinTech, genetics, and biology. Many jobs in these sought-after industries can be obtained by candidates who don't have the full set of skills, or their skills are easily transferable, while other jobs will require expertise. Speaking of skills, the top skills among employers are critical thinking, problem-solving, self-management, resilience, stress tolerance, and flexibility.
Hear from a Dutch expat in Poland
We spoke to a Dutch expat in Poland, who prefers to remain anonymous. He is a senior director at the financial department and has been living in Poland with his wife and children for almost a year. Through “regular attrition and smart reorganisations,” his company used the Covid-19 crisis as an opportunity to reset. We asked him how he sees the future of remote work, and he replied: “I would say that 60/40 (remote/office) would be a good balance. Working from home is perceived as fairly effective (no commute, no more running to the next meeting, etc.), but it has proven difficult to start-up projects or onboard new employees. In addition, the social aspect and networking have gone down substantially. Consequently, a sense of belonging and connection with the company is less prevalent, making it easier for employees to switch jobs if an opportunity opens up. Furthermore, management styles, communication forms, staying tuned in, etc. has been going through a redesign process to keep performance on the required levels and keeping employees engaged and motivated.”
