The COVID-19 crisis has had a grave impact on jobs worldwide. With lockdowns resulting in workplace closures across the globe, the number of working hours that have been lost is equivalent to about 345 million jobs being lost.
In the recently released The Future of Jobs Report by the World Economic Forum, its founder and executive chairman, Klaus Schwab, writes: “After years of growing income inequality, concerns about technology-driven displacement of jobs, and rising societal discord globally, the combined health and economic shocks of 2020 have put economies into freefall, disrupted labour markets and fully revealed the inadequacies of our social contracts.”
“Millions of individuals globally have lost their livelihoods and millions more are at risk from the global recession, structural change to the economy and further automation,” he adds.
The true impact of the pandemic on jobs
The pandemic has been all pervasive – impacting every sector and industry. However, some have been hit harder than others. For instance, the hospitality, tourism and retail sectors have faced tremendous damage – so have many small- and medium-sized companies with smaller cash reserves.
COVID-19 and its ensuing disruptions have caused a spike in unemployment in most economies and has displaced many workers from their jobs. To understand the severity of the current crisis, we need to only compare it to the last global recession. At the peak of the financial crisis in 2010, unemployment stood at 8.5%. Whereas, in the current crisis it is expected to peak at 12.6% by the end of 2020.
Many countries, such as Germany and Italy, have used policy to implement job retention schemes and wage support measures. While such measures have saved jobs for the time being, it has also subsidised the wages of millions of workers. Moreover, there remains a big question mark over the sustainability of jobs in these economies in the long term, once such measures are lifted.
Take the US, for example. Unemployment grew from 3.5% in February 2020 to 14.7% in April 2020. It currently stands at around 10%. In fact, in two months of the COVID-19 crisis, the US lost more jobs than it did in two years of the Great Recession.
Three categories of workers have emerged through the COVID-19 crisis, according to the World Economic Forum.
First, essential workers such as delivery personnel, healthcare workers and caregivers, food shop workers, and workers engaged in agriculture and manufacturing of medical goods.
Second, remote workers who have the ability to perform their jobs from any location and will therefore most likely retain their jobs.
Third, displaced workers who have either already lost their jobs or may lose them in the future. This third group of workers is from the hardest-hit sectors – such as travel and tourism, retail, service work and hospitality.
The COVID-19 crisis will have dire social consequences as well, especially for those communities that are already disadvantaged. It is estimated that due to the COVID-induced recession in 2020, between 88 to 115 million people could fall back into absolute poverty and will further deepen existing inequalities.
“COVID-19 has accelerated the arrival of the future of work,” according to Saadia Zahidi, managing director, World Economic Forum.
She adds: “Accelerating automation and the fallout from the COVID-19 recession has deepened existing inequalities across labour markets and reversed gains in employment made since the global financial crisis in 2007-2008. It’s a double disruption scenario that presents another hurdle for workers in this difficult time. The window of opportunity for proactive management of this change is closing fast.”
Labour market evolution, 2020-2025
The adoption of new and emerging technologies was already picking up before the pandemic, but COVID has accelerated their adoption – the areas expected to see quick uptake are cloud computing, bid data and e-commerce. The increased use of technologies is also associated with threats, and areas like encryption are expected to see growing interest, along with the increased adoption of non-humanoid robots and artificial intelligence.
While disruptions caused by new technologies will displace many jobs, they will also create demand for new job roles and skillsets. Organisations and workers have to upskill and reskill themselves to meet the demand of the new future of work. One of the findings from the 2018 edition of the same report remains consistent this year, where “by 2025 the average estimated time spent by humans and machines at work will be at parity based on today’s tasks”.
In the 2020 survey, employers expect the share of redundant roles to decline from 15.4% today to 9% by 2025. Meanwhile, emerging professions will grow from 7.8% to 13.5% in the same time frame. This means that, by 2025, although 85 million jobs will be displaced due to a shift in the division of labour between humans and machines, 97 million new jobs will emerge.
Several roles will see growing demand, including emerging technology roles – while several other roles will be displaced by new technologies. Reskilling and upskilling will be key to remain relevant in the new future of jobs.
What the future demands
Through the ages, humans have had to adapt to changing environment. It is critical that governments, organisations and individuals plan well to be prepared with the right skillsets for jobs of the future. For this to happen, reskilling and upskilling need to become priority.
Which is why, writes Mr Schwab, “We find ourselves at a defining moment: the decisions and choices we make today will determine the course of entire generations’ lives and livelihoods. We have the tools at our disposal. The bounty of technological innovation which defines our current era can be leveraged to unleash human potential…If this opportunity is missed, we will face lost generations of adults and youth who will be raised into growing inequality, discord and lost potential.”
