Labour and employment in the post-COVID-19 world

COVID-19 RESOURCE HUB | Financier Worldwide

LABOUR & EMPLOYMENT

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The COVID-19 outbreak has had a transformational impact on companies, and will continue to do so for the foreseeable future. The coming of the coronavirus crisis sparked the biggest change in working practices in a generation, with entire workforces either furloughed, made redundant or sent to work remotely. The speed at which these changes took place has stretched companies, as well as their IT and human resources (HR) departments, to their limits.

Remote possibilities

According to FlexJobs and Global Workplace Analytics, there has been a major upward trend in the amount of people working remotely in the US in recent years. In the span of one year, from 2016 to 2017, the practice grew 7.9 percent. Over the last five years it has grown 44 percent, and 91 percent over the previous 10 years. Between 2005 and 2017 there was a 159 percent increase.

But the scale migration to remote working caused by COVID-19 has been truly remarkable. While some companies may have been resistant to remote working in the past, COVID-19 has made it a necessity. Even as national and regional lockdowns begin to lift, the shift for many could be permanent. In a recent PwC survey, 84 percent of employees said they felt able to perform their role just as effectively when working remotely as they would in the office.

There are also financial benefits for employees. According to a study by online recruitment platform FlexJobs, employees in the US can save as much as $4000 a year from commuting, office meals and other miscellaneous expenses.

Companies are gearing up to maintain remote working for the foreseeable future. According to a Gartner survey of 317 chief financial officers (CFOs) and business finance leaders, 74 percent plan to move their previously on-site workforce to permanently remote positions post-COVID-19.

Remote working has enabled many businesses to continue operating during the COVID-19 crisis, and to discover additional benefits. Sustainability and environmental advantages can be derived from reducing office space and less commuting and business travel. The mental and physical wellbeing of employees, including their work/life balance, has also come into sharper focus during the pandemic. Companies are assessing these issues as they consider long-term work policies.

Employment pressures

COVID-19 has caused widespread disruption, with little chance of a return to ‘normality’ in the short term at least. Many millions of jobs have already been lost, and millions more will follow as government support schemes come to an end and we move into the next phase of the crisis.

The United Nations International Labor Organization (ILO) estimates that quarantine measures affected almost 2.7 billion workers worldwide. It predicts that 195 million jobs will be lost due to COVID-19.

With virtually every G20 nation anticipating a deep and painful recession, displacement of workers looks set to continue. The COVID-19 crisis could herald a structural change in the labour market and demand for skills. Though some jobs will return as economies begin their slow recovery, certain factors will influence the shape and nature of those jobs.

Economic shocks create a period of uncertainty but can be a catalyst for companies to drive productivity and efficiency. Employers will look to shed less-skilled workers and replace much of what they do with technology. Simultaneously, many will invest in higher-skilled workers, which will increase labour productivity going forward.

Automation anxiety will become more common as organisations turn to technology to reduce costs, reduce reliance on human workers and improve work quality. Lower income workers, especially in developing markets, will be most vulnerable, with automation in areas such as production, food service and transportation likely to be affected.

COVID-19 looks set to spark greater adoption of automation, artificial intelligence (AI) and machine learning (ML), particularly as the cost of these innovations continues to decline. According to a survey by Pod Group, 73 percent of 500 UK business leaders surveyed believed that COVID-19 will spark a new wave of automation, with 62 percent expecting their company to speed up plans to use automation in some processes currently carried out by employees.

To reap the benefits, companies need a robust strategy when implementing technology. But according to Pod Group, 39 percent of business leaders do not have, or are unsure about, their strategy for using automation technology in a post-COVID-19 world.

As the economy and society changes around us, the nature of employment in the post-COVID-19 world also looks set to evolve.

Richard Summerfield