I recently glanced through portions of the “The Post-pandemic Economy: Future of Work Report After COVID-19” issued by the McKinsey Global Institute. According to the report introduction, “Since its founding in 1990, the McKinsey Global Institute (MGI) has sought to develop a deeper understanding of the evolving global economy.” The report is an excellent read on the current situation, which includes three major trends that will affect work and workers.
Stephanie Deese, Executive Director of the North Carolina Association of Workforce Development Boards summarized the 152-page report into three categories. COVID-19 has accelerated these three trends that could persist to varying degrees after the pandemic with different implications for work.
First, hybrid remote work could continue: 20 to 25% of workers in advanced economies and about 10% in emerging economies could work from home three to five days a week, mainly in the computer-based office work arena. That is four to five times the level before the pandemic and may reduce demand for mass transit, restaurants and retail in urban centers.
During the pandemic, policy makers, companies, and workers have adapted to new ways of work more quickly than previously thought possible, “out of sheer necessity,” according to MGI.
Second, the growth in share of e-commerce and the “delivery economy,” which was two to five times faster in 2020 than before the pandemic, is likely to continue. This trend is disrupting jobs in travel and leisure and hastening the decline of low-wage jobs in brick-and-mortar stores and restaurants, while increasing jobs in distribution centers and last-mile delivery.
Finally, companies have enlisted automation and artificial intelligence to cope with COVID-19 disruptions and may accelerate adoption in the years ahead, putting more robots in manufacturing plants and warehouses and adding self-service customer kiosks and service robots in customer interaction arenas.
The report indicates that seventeen million Americans will need to make occupational transitions in a post-COVID scenario. Our workers fare better than those in China. Fifty-four million Chinese workers are anticipated to have to make occupational transitions.
The reality, and ultimately the results of this study, show that the future of our workforce will be drastically different than the one we once knew. Retraining and reeducating the world’s population will play a critical role in our future success.
Will COVID‑19 change the geography of work? “Over the past decade, jobs concentrated in the world’s largest cities and people flocked to them, but remote work could dampen or even reverse that migration.” Prior to the pandemic, MGI research found that “the largest cities in the United States and Europe accounted for a disproportionate share of job growth after the 2008 global financial crisis, while many smaller cities and rural areas fell behind.” Some companies are discussing opening satellite offices in smaller cities, in part to attract talent there. Other smaller cities developed incentive programs to encourage remote workers to relocate.
It all remains to be seen, but there are certainly many areas of the workforce affected by the pandemic. Let’s hope that the majority of the changes are positive.