How to rebuild and reimagine jobs amid the coronavirus crisis

A summary of McKinsey’s publication that can be found here

COVID-19 is the most serious health crisis the world has experienced in a century — and it could also be one of the biggest destroyers of jobs in human history.

The International Labour Organization has forecast that the pandemic could reduce global working hours by nearly 7% in the second quarter of 2020 — equivalent to 195 million full-time jobs. The loss of work will disproportionately affect those who can least afford it, including lower-wage earners and small enterprises.

Worldwide research on emerging strategies and best practices suggests that governments and their partners need to take urgent action in the following two key areas:

1. Create a granular view of who needs help to keep their jobs/find new work;
2. Build cross-sector solutions to maximise employment and protect against new infections in terms of global guidelines and local health regulations.

3 Key Dimensions

1. Industry sector and occupation:

Each occupation can be assessed according to the level of disease exposure inherent in the role and the degree of demand shock that the occupation has experienced during the crisis.

2. Demographics (income, education level, age)

3. Enterprise size

Smaller businesses, including those in the informal sector, typically have smaller balance sheets/cash buffers than do their larger counterparts.

Another challenge among informal enterprises and gig-economy workers is that they are typically not registered with the government and regulatory agencies, making it difficult to ensure that help will reach them. Compounding the issue further, small businesses often have a disproportionately large share of the economy in rural areas.

Interventions

• A sector- and occupation-level heat map can be a key tool
• Stimulate consumer demand and rebuild confidence

Reskilling across three dimension

1. Physical distancing causes traditional formats to be replaced online, calling for creativity in delivering effective training (specifically for soft skills, such as teamwork).
2. Rapid reskilling requires much shorter interventions and a different system to recognize those skills. Microcredits will replace traditional degrees in many cases.
3. Third, a crisis of this degree calls for a mindset shift toward the greater good of society as opposed to focusing on competitive advantage for a specific company. Companies that otherwise would be business competitors will need to collaborate and provide reskilling opportunities at an industry level.

3 key ideas for action:

1. Rapidly build online “talent exchanges” to create transparency on job openings and facilitate redeployment.
2. Reskill at speed and scale.
3. Design effective, government-backed incentives for redeployment and reskilling.

Ideas for action to restart and sustain the SME job engine include the following:

• Help SMEs take advantage of online talent exchanges.
• Build alliances among large and small businesses.
• Protect the most vulnerable segments of SMEs.