We explore the changes in the labour market brought about by the pandemic and analyse the 5 trends that will shape the future of work after Covid-19.
Covid-19 has triggered major changes in how we work. The emergence of a new modality —teleworking— is probably the most notable transformation. However, the pandemic has led to other permutations that will further alter the status quo of the labour market in the future.
The global pandemic caused by Covid-19 has changed many aspects of our lives. One of the most significant transformations has occurred in the world of work internationally; involving new ways of working, the reinforcement of trends already in the pipeline and the exacerbation of difficulties particularly complex for some industrial sectors.
2020 has been economically challenging for most. However, the pandemic has been beneficial for certain sectors of activity that have grown strongly thanks to the contextual conditions linked to the health crisis. Globally, however, the consequences of Covid-19 on the world of work have been tragic, leading to millions of dismissals.
The metamorphosis of the labour market has fast-tracked trends that will shape the future of work after Covid-19. The US technology consultancy McKinsey has conducted in-depth research on the subject. We analyse the most important trends that will shape the labour market after Covid-19.
5 trends that will shape the future of work after Covid-19
1. Remote working is here to stay, but with conditions
The permanence of telework has been a topic of debate in public opinion since the lifting of the harshest confinement periods. Many studies have long been announcing that telework is not going to disappear, at least not entirely.
Although many workers in Spain have already returned to their jobs and McKinsey predicts that remote working and virtual meetings will continue, but with less intensity than during the height of the pandemic, research by Gartner concludes that 75% of workers say their expectations of flexible working have increased. Even more, 4 out of 10 say they would leave their jobs if forced to return to full on-site working. According to this, it seems that while some senior managers may be reluctant to embrace remote working once the pandemic is over, teleworking has already been established in people's minds and they do not seem to be willing to leave it behind.
McKinsey has gone a step further by making a prediction about the extent of telecommuting after the pandemic. After analysing more than 2,000 common tasks in over 800 professions in 8 countries around the world and focusing only on those jobs that can be performed remotely without affecting productivity, the consultancy firm concludes that between 20% and 25% of workers could work from home 3 to 5 days a week, which is 4 to 5 times more remote work than before the pandemic.
The consultancy also points out that some of the jobs or tasks that can be done remotely are best done face-to-face. These include decision-making, meetings and negotiations with customers or suppliers, the exchange of sensitive information, brainstorming sessions and the onboarding of new employees.
It seems that neither face-to-face nor remote working are going to disappear and that not all jobs or sectors have the capacity to work remotely without it having a negative impact on efficiency. Indeed, there are a large number of jobs that cannot be carried out remotely. For those that can, the flexible mode looks set to be the winner of the battle, allowing employees to work without the need to travel on a daily basis, but without completely dismissing the benefits of face-to-face working.
2. Physical spaces and business trips decrease
The popularity of remote working has prompted many organisations to consider reducing the size of their physical spaces, opting for smaller and flexible workspaces that are suited to a mix of face-to-face and remote working. A McKinsey survey conducted among 278 employers in August 2020 concludes that, on average, employers plan to reduce the size of their offices by 30%.
Likewise McKinsey predicts that remote working, the digitisation of meetings and the confirmation that certain tasks can be performed without being physically present, will lead to a significant decrease in business related trips. Specifically, the consultancy announces that 20% of business trips —the most lucrative segment for airlines— could disappear.
This, in turn, could have negative consequences for airlines, hotel companies, shops and services in urban centres and passenger transport.
3. Further automation and artificial intelligence in business environments
The economic crisis caused by the virus has hit the vast majority of organisations hard. Historically, during economic downturns, companies tend to reduce costs and mitigate market uncertainty by reshaping work processes, especially through automation and integration. Automation reduces the number of routine tasks and cuts unnecessary costs. In addition, artificial intelligence —especially machine learning and deep learning— increases the analytical and automation capabilities of processes and reduces the number of business operations required.
McKinsey's July 2020 global survey among more than 800 executives reveals that more than 66% of companies are increasing their investment in automation and artificial intelligence. The US consulting firm also notes that the adoption of automation and artificial intelligence will be especially significant in workplaces with high levels of human interaction.
4. The rise of e-commerce
Los períodos de confinamiento, marcados por la imposibilidad de realizar compras de manera presencial, fueron increíblemente beneficiosos para las compañías de e-commerce, cosa que parece que no va a cambiar tras el fin del confinamiento.
Lockdown periods made it impossible to buy things face-to-face. This was incredibly profitable for e-commerce companies.
During the pandemic, many people were introduced to e-commerce and discovered the advantages and convenience of this shopping experience. McKinsey predicts that the growth of e-commerce and other virtual transactions will continue and the results of their survey leave no doubt: 3/4 of the people who made purchases or other transactions through a digital channel for the first time during the pandemic will continue to do so once the situation has normalised.
In turn, the rise of digital transactions has fuelled the growth of jobs related to product delivery, transportation and warehousing.
5. Decline of physical work and lower paid jobs
The digitisation of transactions, the adoption of artificial intelligence and process automation and the acceleration of the transformation to virtual will reduce tasks involving basic cognitive skills by 3.4% and physical tasks by 2.2%. In contrast, tasks involving social and emotional cognitive skills will increase by 3.2% and those involving technological skills will rise by 3.3%, according to McKinsey.
This implies that, after Covid-19 and in the coming years, the concentration of employment will grow in higher-paid jobs and fall in the case of lower-paid jobs. In the same vein, the demand for jobs requiring less education will decrease and the demand for university graduates will increase.
This trend may exacerbate economic difficulties for those in lower-valued jobs and increase social inequality.
McKinsey predicts that 6.25% of workers will have to change jobs and look for a higher paid job. According to the consultancy, this transition will particularly affect workers with low or no qualifications, ethnic minority groups and women.
Transformations in work are constant and progressive. In many ways the pandemic has accelerated the transition to virtualisation, which has already begun to produce significant changes in the workplace. According to experts, these changes will persist once the situation normalises, prompting companies to adapt to the new context and reshape their work routines, processes and operations to fit in a more digital world.