Riding the wave: The labour market post-COVID19
On Purpose Associate, midway through her second placement at digital career coaching social enterprise, Stay Nimble, having spent 6 months at Big Society Capital for her first placement.
As social distancing measures begin to ease and we witness train carriages and restaurants filling up once more, we’re left wondering — what’s in store for the labour market? Here I take a look at the trends, predictions and suggestions for staying afloat in the next phase.
Right now, one in three working-age adults is either unemployed, furloughed or receiving income support for the self-employed. That’s more than 13 million people.
Let’s allow that number to settle in for a moment.
That’s the population of Ireland, New Zealand and Wales combined. Or the festival-goers of over 65 Glastonbury events. It’s huge.
Some 5 million of these worked in sectors that have fallen prey to lockdown, with many businesses grinding to a halt when social distancing measures were put in place. In March and April alone, we saw 2.5 million applications for Universal Credit, and experts are saying that ‘five years of employment growth was wiped out in one month.’
Within a matter of weeks, we watched the government spring into action to support employers and employees alike (at a launch rate much faster than we’re accustomed to). The furlough scheme enabled businesses to retain staff and avoid redundancies, with 8 million employees granted a steady (albeit reduced) income, during these particularly unsteady times.
However, with the scheme coming to an end in October, the responsibility will fall once again to the employer to foot the bill. And with that, the same anxious questions are resounding everywhere we turn: Am I going to lose my job? Will I be able to find a new one? When will everything be ‘normal’ again?
The hardest part is that no-one really knows. And this uncertainty is going to be a huge catalyst for anxiety, not to mention the other mental health challenges that have been sewing their roots during isolation. Sure, we can compare the numbers to the crash in 2008 and attempt to map out the recovery period, but as economists keep reminding us — the circumstances we’re in are not the same as they were 12 years ago; the recession we face today was triggered deliberately following a series of unfortunate events (and not the Lemony Snickett kind, unless Count Olaf is yet to reveal Corona as his latest guise). This means that the slump we’re in now has entirely new conditions, and we need to navigate these muddy waters using different vehicles to those that drove us out of the 2008 swamp.
The labour market is facing a unique set of challenges, and once again the distribution of these has fallen disproportionately and unfairly to certain groups and areas of the UK as set out below.
Please note the following nuances have been lifted from this report by the Learning & Work Institute, supported by Stay Nimble.
Young people:
- …in their early 20s were 2.5 times more likely to work in a shutdown sector than other workers.
- One in five 18–24 year olds, some one million, may be NEET in the next year (not in education, employment or training).
- Long-term youth unemployment could rise as much as fourfold to 200–500,000, compared to a peak of 420,000 after both the 1990s and 2008 recession.
The north of England:
- Areas of the country that had the highest pre-crisis unemployment rates saw the largest percentage point rises in unemployment. For example, the claimant count rate in Blackpool rose from 7% to 10.9%, whereas in Guildford it rose from 1.1% to 2.2%.
- The North East saw a 2.5 percentage point rise in the claimant count in April 2020 compared to March, compared to a 1.7 percentage point rise in London and the West Midlands.
Increased inequalities:
- Those on higher salaries and based in London and the south east are most likely to be able to work from home.
- Those most likely to lose their jobs as the furlough scheme unwinds (such as sectors still subject to lockdown or significant constraints on customer numbers) are those working in retail and hospitality and on relatively low wages.
- The Government’s ‘track and trace’ system will require people to self-isolate for 14 days each time they come into contact with someone confirmed to have contracted coronavirus. Again, this will be easier to do if you are a well-paid professional able to work from home than if you are a self-employed worker or on a zero-hours contract relying on Universal Credit or Statutory Sick Pay.
A recent McKinsey & Co article, COVID-19 in the United Kingdom: Assessing jobs at risk and the impact on people and places speaks to similar issues;
- ‘The people and places with the lowest incomes are the most vulnerable to labour market challenges… Nearly 50 percent of all the jobs at risk are in occupations earning less than £10 per hour.’
- ‘Only around 24% of employees in the hospitality, retail, and construction sectors have a higher-education qualification… At the other end of the spectrum, between 55–70% of people working in information and communication, financial services, or professional services have a degree or higher education qualification.’
- ‘Unemployment rates are significantly higher among poorly educated people and the number of vacancies is correspondingly lower — for example, elementary construction workers in 2016 faced an unemployment rate of 10 percent while engineering professionals’ unemployment rate was a tenth of that, at 1 percent.’
- ’45 percent of the most vulnerable jobs are held by younger people aged 35 years or less.’
- ‘Young women in particular score the highest on jobs at risk of all age and gender groups, partly because of their high representation in jobs such as sales and retail assistants, receptionists, cleaners, and waiters. Women are also six times as likely as men to be lone parents, another demographic category that holds a disproportionate share of jobs at risk.’
- ‘Asian ethnicity accounts for 7 percent of the United Kingdom’s total workforce… making up 13 percent of cooks, chefs, catering, and bar managers and driving instructors. Black workers, whose share of employment overall is 3 percent, make up 6 percent of such vulnerable jobs as dental nurses, workers in the apparel trade, and cleaning occupations. Jobs at risk among mixed and other ethnicities include housekeepers and actors, entertainers, and presenters.’
The fate of these groups rests upon the withdrawal of government support, temporary constraints in business operations, and shifts in consumer behaviours. Not forgetting however, long before COVID19 the shift to automation was already reshaping the world of work as we know it, placing the livelihoods of millions in danger. Lockdown has significantly accelerated this transition toward AI, as companies have been forced to reconsider the cost of a human workforce.
So what can we do?
Michael Bernick’s recent article for Forbes quotes Matt Sigelman, CEO of Burning Glass Labour Market Data, who offers the notion of The Lifeboat Job:
‘Unemployed workers need to cast off resistance to taking jobs that are below their educational level, or background level, or skill level. The Lifeboat Job can provide structure and income right away, and will often lead to a better job as the economy recovers… When employers start hiring back up, they won’t necessarily hire the workers they let go. Instead, they will be looking for people with the skills that will be needed for the future. Whether to stay relevant or to get back to work, you are going to need to develop the skills needed to differentiate yourself. For example, marketing people who build data skills are much more highly sought after than those without them. Now is the time to build those skills.’
Dominic Atkinson, CEO of digital career coaching platform Stay Nimble, explained to me the importance of reconnecting with our unique personal strengths when preparing for the challenges that lie ahead;
“Skills are one dimension of our working lives which get focus from employers, governments and academics as these are the tradable elements that have market value. However, work, tasks and skills are performed by people. We aren’t just vessels of skills for creating economic activity. We all have inherent and unique combinations of strengths which can be directed to achieving remarkable things. These strengths help us acquire new skills and perform new tasks. They are the foundation of our behaviours and understanding these strengths gives us an advantage when considering how to respond to rapid changes in our environment. Knowing the connection between your strengths, tasks and skills can help people to identify these “Lifeboat Jobs” and how these can take you to Next-step Occupations. Many of us will need to change into entirely new careers to get through this next stage of the pandemic, which in turn will need support for people to think differently, especially employers. Less off-the-shelf, box-ticking recruitment, and more “hiring-to-develop” people approaches are needed.”
As organisations begin to re-emerge on the other side of lockdown, a surge in redundancies is inevitable following the impact of COVID19 on profits. After numerous businesses had to throw in the towel, the lucky ones who managed to cling on these past 3 months will still need to cut costs in drastic measures if they want to be in with a chance of survival going forward. The knock-on effect this will have on the mental health of employees is significant.
‘It’s vital employers consider the part they can play to help people going through redundancy.’
Dominic Atkinson implores employers, ‘to consider extending safeguarding beyond the life of the employment contract in order to support our communities to ride out the next wave of this crisis.”
“Badly handled redundancy can also have a knock-on effect on ‘surviving’ employees. In the north west alone, our study showed 65 per cent of those avoiding redundancy felt they were negatively affected by the experience of their co-workers.
“From feeling like their own job was no longer safe to believing that their employer didn’t care about its people, the findings painted a bleak picture for the entire post-furlough workforce.”
Stay Nimble has recently launched a white-paper, Best Practice Offboarding, to offer employers advice for navigating post furlough redundancies. In addition to this, as part of their social impact partnership with Accenture, Stay Nimble is offering up to 2hrs of free coaching calls for those who have been made redundant as a result of the pandemic.
So although we can’t be sure what the second half of 2020 holds for the labour market, it feels increasingly important that we embrace the unfamiliar. Approaching the next phase with an openness and a willingness to learn and adapt is going to be essential when working in places that fall outside of our comfort zone, and outside of our original plan.
This is an opportunity for us to try something different; to add new skills to our inventory.
Grab a paddle, and I’ll see you on the other side.
