Lockdown Lifted, Economy Shifted: Workforce Resilience for the New Normal
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This article is part of a series in which OECD experts and thought leaders – from around the world and all parts of society – address the COVID-19 crisis, discussing and developing solutions now and for the future. It aims to foster the fruitful exchange of expertise and perspectives across fields to help us rise to this critical challenge. Opinions expressed do not necessarily represent the views of the OECD.
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A cross-sector approach to reskilling employees will play a crucial role in the economic recovery ahead.
As we emerge from the COVID-19 pandemic, we are getting the first glimpses of the new normal. Lockdown measures have successfully slowed infection rates in most parts of the world, but they have also frozen economic activity across many sectors. As restrictions are lifted, it is clear that the global economy has fundamentally shifted.
What began as a public health emergency has mutated into an employment crisis. The most recent OECD data projects workforce unemployment will more than double by the middle of this year, reaching around 11.5%. Assuming we are able to avoid a second wave of infections, employment levels are expected to gradually improve. However, even the most optimistic readings of the figures confirm we are not yet through the worst of it.
For instance, we know that levels of employment will remain substantially below last year’s figures. Already, job losses are significantly higher than during the 2008 global financial crisis and we will not understand the full impact until wage and employment support schemes come to an end later this year. It is clear, though, that the job losses will not be spread evenly across industries.
The service sectors including hospitality, retail, entertainment and travel have all suffered disproportionately, and for obvious reasons. German airline Lufthansa, for example, announced 22,000 job cuts at the start of June, despite receiving government support the previous month. It may take years for the worst-hit industries to regain confidence and start hiring again.
It is encouraging to see that other sectors have continued to succeed under lockdown. Logistics operations have adapted to protect supply chains. Food distributors have stepped up to keep supermarkets stocked. Governmental support services such as call centres have scaled to handle an unprecedented number of welfare and relief claims.
The evolving nature of work
As a bellwether of the labour market, Randstad has experienced this crisis from the front seat. We have been hard hit in many sectors, however, we are seeing some countries and sectors pick up speed. We have seen how COVID-19 has accelerated many of the longstanding workplace trends that we have tracked for decades. Remote work, for example, has been perfectly feasible for years, but mass adoption seemed unlikely.
Last year, just 3.2% of employees in the EU reported that they usually work from home, presenting only a modest increase from 2009 when the figure was at 2.7%. Now, some of the world’s largest tech companies such as Facebook and Twitter have embraced distributed work as the new normal and intend to keep many of their staff working remotely for good.
Read the OECD Policy Response: Capacity for remote working can affect lockdown costs differently across places
At Randstad, we have spent the past five years investing actively in digital transformation. This positioned us well to respond to the crisis. We were able to transition 38,000 employees across 39 countries to virtual work in just three days. But we know from discussions with our clients that our experience is not typical.
Returning safely back to work
The switch to remote work was relatively seamless for many software and knowledge companies. It posed a more significant challenge to traditional service providers in events and hospitality. The short-term viability of an organisation has become determined by its capacity to embrace new ways of working. This will shape where job opportunities emerge as the economies continue to reopen.
According to the OECD, there is a 50-50 chance a second wave of COVID-19 will occur later this year. We must not be complacent. We must do everything to ensure people feel able to return to work safely.
We know that both workers and employers are aware of the dangers the virus still poses. According to the OECD, there is a 50-50 chance a second wave of COVID-19 will occur later this year. We must not be complacent. We must do everything to ensure people feel able to return to work safely.
With this in mind, Randstad began working with an alliance of leading companies in HR services to shape a vision for how businesses can safely return to work. Together with companies including Adecco, GI Group and ManpowerGroup, our focus has been on sharing best practices for health and safety protocols, and on developing or updating them for the physical distancing economy.
Building resilience in the workforce
The HR services industry plays a vital role during turbulent times. In 2018, 160,000 agencies placed approximately 58 million people in jobs across a great variety of sectors. That already feels like a long time ago. The jobs market is much more volatile than it was then. While many people are now returning to work, many others have been left without jobs to go back to.
As a sector, we will need to work harder than ever to ensure we can continue connecting people with productive opportunities. Labour demand is shifting in ways that reflect how industries have fared during the crisis. Businesses may be able to increase or downsize teams relatively quickly, but it takes much longer for the labor market to adapt.
Connecting with Employees at a Time of Unprecedented Change: Preparation, Adaptation and Empathy by Scott Frisch, Executive Vice President & Chief Operating Officer, AARP
A McKinsey survey in February found that 87% of executives were either already encountering skill gaps in the workforce or anticipated them in the years ahead. Despite this looming threat, fewer than half of respondents had a clear sense of how to address the problem. This is where we must focus our attention.
Agile and effective reskilling
Randstad is active in global efforts to make a larger number of effective and high-quality reskilling and training opportunities available. Randstad US has committed to reskilling 40,000 workers through 2021 and we have also committed to train more than 10,000 people through Randstad NL Boost. This part of our mission has become even more crucial in the context of COVID-19.
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With unemployment surging, such initiatives are an effective mechanism to ensure the labour market doesn’t leave people behind in the recovery. The HR services industry already provides millions of agency workers with access to training. For example, the French Social Fund for Agency Workers (FAFTT), governed by trade unions and agencies, provided almost 60,000 training courses to agency workers in2018. Similar funds exist in the Netherlands, Belgium, Italy and Switzerland. Wherever possible, these must be supported and scaled as part of the recovery.
It’s clear that the new normal will not be as normal as many of us hoped. While the challenges that we face today are significant, let’s meet them head on and turn them into opportunity.
Since we were founded 60 years ago, Randstad has championed new models of work. We know they will be more important than ever in the period ahead. Through a focus on training and reskilling, we have an opportunity to future-proof workers and companies alike, increasing their resilience and effectiveness for the long term. The value of this in response to automation was well understood before the crisis. Now it is a matter of urgency and necessity.
It’s clear that the new normal will not be as normal as many of us hoped. While the challenges that we face today are significant, let’s meet them head on and turn them into opportunity. By applying the lessons learned we can capture the momentum we need to not only restart the economy, but also to revitalise our workforces for good
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