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Imperatives on post-COVID-19 reskilling

A McKinsey study on eight different countries reveals a post-pandemic labour market primed to change even faster than expected. By 2030, as many as 100 million workers will need to find a different occupation, acquiring new and more sophisticated skills to remain relevant on the market

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"The pandemic accelerated existing trends in remote work, e-commerce and automation, with up to 25% more workers than previously estimated potentially needing to switch occupations". The underlying premise of the McKinsey report "The Future of Work after COVID-19" leaves no room for doubt: the impact of COVID-19 on labour markets will be disruptive and press harder on the accelerator of change even as the pandemic recedes.

Translated into figures, 100 million workers will need to find a different occupation and acquire new skills by 2030. The company reached this estimate by analysing data from eight countries with different economic and labour market models: China, France, Germany, India, Japan, Spain, the United Kingdom and the United States.. Together, these eight countries account for almost half the world's population and 62% of its GDP.

In broader terms, the McKinsey report concludes that jobs with higher levels of physical proximity are most likely to see the greatest transformation, which has thus far rang true during the pandemic: medical and personal care services, in-person customer service and many professions related to leisure and travel activities. In some cases, such as on-site customer service in shops, banks and other services, the shift will be digitised at least partially. This will result in fewer jobs in these fields, and also for some jobs in airports or in catering, for example.

In contrast, office work, naturally the most widespread within advanced economies (amounting to one third of all jobs), has been and will be able to adapt more easily to remote forms of work, also in the future. Outdoor production and maintenance jobs, such as construction sites, will be the sectors least affected by the long-term impacts of COVID-19 because of the low level of personal contact and the very nature of the activity, which takes place mainly outdoors.

After the pandemic, about 20 to 25 percent of the workforces in advanced economies could work from home between three and five days a week.

In general, McKinsey explains, the pandemic has triggered three broad trends that will remain even after the end of the emergency.

The first is obviously remote work, which will continue after the pandemic, albeit to a lesser extent. McKinsey estimates that roughly 20 to 25 percent of the workforces in advanced economies could work from home between three and five days a week after the pandemic subsides. This would mean four to five times more remote work compared to the pre-COVID-19 situation, a change that would also have significant geographical consequences, in terms of more and more people leaving the big cities and moving to smaller, more affordable towns and cities.

However, not all work done remotely can be as effective as work done in person. McKinsey concludes that activities such as negotiations, critical business decisions, brainstorming and onboarding new employees could be undermined when done remotely. Nevertheless, many companies intend to focus on reducing office space by up to 30% in the near future, leading to a reduction in demand for food services near offices and even business travel (leisure travel and tourism, however, are expected to pick up after the pandemic).

While e-commerce services and other virtual transactions such as telemedicine, online banking and streaming have surged with the virus, physical services such as home delivery, transport and storage have also been booming. McKinsey also explains that, overall, the work arenas with the highest levels of human interaction are most likely to undergo the greatest acceleration in adopting artificial intelligence and automation.

In this light, the pandemic's impact on the type of work available worldwide will be even greater than anticipated before the advent of the coronavirus. In particular, the heaviest negative impact will be felt not only among food and sales service jobs, but also across office support professions.

In the United States, for instance, customer care and food services could fall by 4.3 million, while transportation services could increase by 800,000. Demand for workers in healthcare and scientific fields is likely to grow even faster. The first in response to the needs of increasing longevity, the second to feed the growing demand for people who can create, use and maintain new technologies.

McKinsey looks down the road and sees that more than half of low-wage workers may need to shift to occupations in higher wage brackets

Due to the impact of the pandemic on low-wage jobs (where the greatest losses will occur), the strongest growth is expected to occur among high-skilled jobs. McKinsey looks down the road and sees that more than half of low-wage workers may need to shift to occupations in higher wage brackets, with a need to acquire different and more advanced skills to remain employed.

In short, 100 million workers can be broken down to 1 in every 16 worldwide. 12% more than before the pandemic, and up to 25% more in advanced economies. The most disadvantaged workers are the ones who will face job transitions to a greater extent, especially because they are employed in sectors most affected by the virus. The groups most likely to change jobs after COVID-19 in Europe and the United States include workers with no university degree, ethnic minorities and women.

In conclusion, McKinsey finds that companies and policy-makers can play a prominent role in facilitating transition processes and upskilling for workers. Specific training programmes can be promoted mainly by companies, which should also analyse how to organise remote work on the basis of specific functions rather than entire professions. Some employers are already focusing on the skills they are looking for when selecting new resources, rather than on educational qualifications. This adds another dimension to facilitate the transition. The possibility of working remotely could also tap into new workers who could not, regardless of the reason, have moved close to their place of work, perhaps to a big city.

Finally, on the side of the decision-makers, the development of digital infrastructures is one of the tools that can most help companies in the transition. McKinsey points out that, even in advanced economies, nearly 20% of workers in rural areas lack access to the Internet. Governments can therefore use legislation to find new forms of social and professional protection for the self-employed and those undergoing training, with a view to consolidating the new labour market. The aid and recovery packages for post-COVID-19 economies, in this regard, provide a unique opportunity to support and promote the successful transition to the world of work of the future. Provided, of course, that the money is well spent.

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