Jobs after Covid-19: business not as usual

When it comes to employment after the pandemic, there are clear winners and losers

The hospitality industry is in decline all over the world. EPA

This will be a significant week in terms of job prospects for millions around the world. In Britain, Wednesday's annual budget will include £126 million ($175.6m) in new funding for 40,000 traineeships and "flexi-job" apprenticeships. In the US, the employment report for February is expected to show the strongest pace of hiring since November. And China's annual work report for 2021 will lay out its job creation target.

Job creation, not just retention, is becoming the focus in the second year of the Covid-19 pandemic even as the world of work continues, inexorably, to change. In 2020, it was all about WFH – working from home. Now, it is metamorphosing into WFA – working from anywhere.

Last month, Spotify, the music streaming company, joined a lengthening list of employers to adopt a WFA policy for its 6,500 workers in 73 countries. Software giant Salesforce and tech firms Dropbox, Facebook and Microsoft have already announced similar plans for the post-pandemic era.

The implications for big cities, not least the property market, transport network and the coffee shop ecosystem that nourishes and is nurtured by office complexes, is unclear. So, too, the more long-term effects on the urbanisation trend.

What is crystal clear though is that the biggest effects of the pandemic have been on service sector jobs, those that can’t use WFH or WFA models. Even in Israel, which has been able to deliver more Covid-19 vaccines per capita than anywhere else in the world, the restaurant industry’s workforce has dropped by 80 per cent.

Unsurprisingly then, economists say it can't – and won't – be business as usual even in a fully vaccinated world. New analysis by the US government predicts a boom of at least 10 per cent by the end of the decade for a clutch of white-collar jobs in medicine, health-science and technology. Epidemiologists, medical scientists, web developers, biochemists, biophysicists and computer systems administrators will be in demand. But the job of restaurant host, bartender, travel agent, hotel clerk and server will be increasingly imperilled, with the need for these occupations declining by at least 16 per cent by 2029.

A new report on the future of work by the McKinsey Global Institute echoes the general tone if not the specifics of that forecast from the US Bureau of Labour Statistics. Like the American economists, McKinsey's research looks at the emerging picture for this decade. It goes beyond the increasing undesirability of restaurant and retail jobs and discerns a broader swing altogether, well away from low-skilled occupations. In assessing the workforce skills required in eight countries that account for almost half the global population and 62 per cent of GDP, McKinsey says "workforce transitions may be larger in scale than we estimated before the pandemic".

The report, which studied three Asian countries, four in Europe, and the US, found that 100 million workers in those eight countries – or one in every 16 – will need to transition to a quite different occupation by 2030. In India and China, the research saw a decline “in the share of agricultural occupations as well”. What’s most striking is the report’s prediction of leaner days ahead for workers without a college degree and the grim assessment that “more than half of the low-wage workers currently in declining occupations may need to shift to occupations requiring different skills in higher-wage brackets to remain employed”. It discerns a common trend across countries. While net job losses before the pandemic were concentrated in middle-wage manufacturing occupations, which were affected by automation, now, low-wage, low-skill jobs will literally vanish.

Whatever the reason – increasing automation, the pandemic-accelerated digitalisation of commerce and altered patterns of business – the McKinsey report is making the same point as the US government analysts. Low-skilled workers need to be re-trained and upskilled as quickly as possible. It seems a vast, possibly bottomless endeavour. How does this even come to pass?

Businesses can start some of the heavy lifting by redesigning tasks and working practices and using mentorship and internal academy schemes to enable their workers to train for higher-skilled jobs with career pathways. Walmart, the American supermarket chain, already uses a version of this. Last year, IBM, Bosch and Barclays started something similar.

But governments have the biggest and most significant role to play. Early on in the pandemic, many advanced economies instituted furlough schemes, some of which continue. But with the future of work itself in transition, more may need to be done. Workers – and the companies that employ them – may need assistance while they retrain in order to catch up with the real needs of the emerging labour market.

Meanwhile, national legislatures have a duty to consider better laws to govern the shifting nature of work. In the initial months of the pandemic, gig workers received help from some governments. It was the first time they were recognised alongside regular employees as legitimate beneficiaries of unemployment provisions. Perhaps the time has come for legislation that allows the “precariat” – freelance workers who exist in an unpredictable system – to accumulate social security benefits even as they work across multiple platforms and in different companies.

There is no guarantee any of this will happen. It is worth noting that the Biden administration did not include funding for worker retraining programmes in its $1.9 trillion coronavirus aid package, which was approved by the US House of Representatives and is currently under consideration by the Senate. However, it is entirely possible that Congress could correct that lapse.

That said, this is not an American issue. It goes much further. Governments and the private sector in every part of the world must now work together to respond to the largest structural recalibration of work since the farm-to-factory migration of the early industrial revolution.

Rashmee Roshan Lall is a columnist for The National