Any discussion of how Covid-19 changed the nature of work is hopelessly, hopelessly understated. But will the changes we saw over the past year — the great corporate dispersal, the rise of work from anywhere, the virtualization of everything — stick as we move past Covid-19? It appears, yes, to some degree, the nature of work is forever altered — but it depends on what jobs we are talking about. For example, those with the need for high levels of physical proximity or human interaction are seeing the most change.
Analysts with the McKinsey Global Institute (MGI) recently explored the implications of work in the post-Covid era ahead. “The impact of the pandemic on work with high physical proximity delivered a major shock to the workforce and will continue to influence its shape and direction in the years to come,” the report’s co-authors, led by Susan Lund and Anu Madgavkar, found. “Workers will face unprecedented transitions requiring wholly new skills to advance into the more highly paid jobs being created.”
Lund and her team urge businesses and policymakers to rethink retraining, and find new ways to help workers develop the skills they will need. “If a robot can learn to flip hamburgers, then a shop clerk can learn to be a nurse practitioner, a cybersecurity analyst, or a wind turbine service technician— with the right support.”
The following revelations have come to the fore:
Dense work arenas with constant customer or co-worker contact are seeing the greatest shifts. The Covid-19 crisis’s short- and long-term impact is concentrated in four work arenas with high levels of proximity, Lund and the MGI team conclude: leisure and travel venues, on-site customer interaction including retail and hospitality, computer-based office work, and production and warehousing.
At the same time, they add, “in less-dense work arenas such as outdoor production sites, the pandemic’s effects may fade quickly. Other work arenas such as medical care and personal care with high level of physical proximity may also see less change because of the nature of the occupations.”
The MGI team asserts that hybrid remote work is here today. They estimate that “20 to 25 percent of workers in advanced 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.”
Covid-19 has accelerated the decline of site-dependent work. Computer-based office work “has the lowest requirements for site-dependent work because the workers in it, such as accountants, financial managers, and legal secretaries, do not require special equipment, and human interactions can be conducted virtually. We estimate that 70 percent of time could be spent working remotely without losing effectiveness, compared to most other work arenas, where as little as 5 to 10 percent of work could be done remotely.” Even in medical care and classroom and training, both work arenas with high physical proximity, “the use of digital tools has risen significantly during the pandemic. The medical care arena has seen a sharp acceleration in telemedicine. In education, the classroom migrated to the laptop during the pandemic, but that is likely to stick only in higher education and workforce training after the pandemic.”
Covid-19 accelerated the decline of manual labor. These scenarios suggest that more than 100 million workers across eight countries “may need to switch occupations by 2030,” the MGI team states. This is “a 12 percent increase from before the virus overall and as much as 25 percent more in advanced economies. Workers without a college degree, women, ethnic minorities, and young people may be most affected. The share of employment in low-wage occupations may decline by 2030 for the first time, even as high-wage occupations in healthcare and the STEM professions continue to expand.”
Automation may also rise in the production and warehousing arena “as companies strive to maintain social distance, replace sick workers, and adjust to surges in demand for manufactured goods and delivery-based services from warehouses during and after the pandemic,” the MGI team reports. However, they note, “in outdoor production and maintenance, we see very little likely increase in automation.”
Covid-19 accelerated the growth of the e-commerce and the delivery economy. This sector, which was two to five times faster in 2020 than before the pandemic, is likely to continue seeing rapid growth, Lund and her co-authors conclude. “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.”
Companies have enlisted automation and AI “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,” they add.
Companies need to reimagine how and where work is done, thinking through specific work arenas and occupational activities, the MGI tram states. “Speedy and effective worker redeployment will be needed, for example by recruiting and retraining based on skills and experience rather than academic degrees. Policy makers might consider prioritizing equitable access to digital infrastructure as well as new ways of enabling occupational mobility. As the share of independent workers grows, more innovation may be required to secure benefits for them. The pandemic will eventually fade, but the agility and creativity of policy makers and businesses evident during the crisis will need to continue, to find effective responses to the looming workforce challenges.”