Life after Covid

In Alberta, we are optimistically anticipating a complete “opening up” mid-July. And we are hearing mixed feeling across the board!

“I am nervous about going back to normal. It’s too soon.” “It’s high time, and I cannot wait to go back to normal”, etc.  The opinions, concerns and excitement cover a wide range of perspectives.

While many are nostalgic about going back to normal, our normal may not be what it was.  We have seen quite a few practices and trends being adopted at a much faster pace (by necessity).

Four trends which accelerated significantly during Covid are expected to continue trending and change the shape of the business landscape indefinitely.

Hybrid Remote Work

According to a study by McKinsey hybrid remote work and virtual interactions is set to  continue: 20 to 25 percent of workers in advanced economies could opt to work from home three to five days a week, mainly in the computer-based administrative and remote customer support work arena. That is an increase of four to five times above the level before the pandemic. Remote work will have a strong ripple effect on the economy;  it may reduce demand for mass transit, restaurants, and retail in urban centers. There is speculation that it may even eventually result in a trend toward de-urbanization. Imagine working from your lake lot or cabin in the mountains long term! This idea is supported by the trend that urban rents declined, but increased in suburbs and small cities in the US.

E-commerce and the “delivery economy”

The uptake of online shopping and dropping it on the porch within a short period of time accelerated  two to five times faster in 2020 than before the pandemic, and will probably continue. 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 the needs for logistics businesses, and related jobs in distribution centers and last-mile delivery will increase.

Automation and AI

Developing lean processes supported with automation and AI to cover business disruption, is expected to continue in the years ahead. The use of robots in manufacturing plants and warehouses as well as  adding self-service customer kiosks and service robots in customer interaction arenas.

Labour market

The demand for skills and attributes in labour going forward will probably be the most difficult to manage. The McKinsey study proposes that the need for entry level, low skills low pay labour may disappear completely by 2030.

 “Before the pandemic, we found that nearly all low-wage workers who lost jobs could move into other low-wage occupations; for instance, a data entry worker could shift into retail or home healthcare. But given the trends accelerated by COVID19, now we estimate that to remain employed, more than half of the low-wage workers currently in declining occupations would need to shift to occupations in higher wage brackets that require different skills.” (McKinsey)

The skills required for emerging positions are demonstrated in the chart below.

(Extract from the McKinsey Global Institute report on The Future of Work after Covid-19)

Jobs most likely to be affected are office support, food service, and customer service and sales.

Workers with less than a college degree will have to re-skill and retrain to remain part of the workforce or to enter the workforce into the future. New skills to focus on are higher cognitive skills, emotional and social intelligence and technological skills.

This trend will have a lower impact on older people, who have an established career and will start moving out of the workplace between 2030 and 2040. Younger generations and unskilled labour will be hard hit by this trend. It is a socio-economic impact that will have to be planned for by government policymakers, and the education system alike. Will we see the emergence of universal wages in the next 10 years?

Sage & Summit is hosting a Lunch and Learn panel discussion on the topic. Please click below to reserve your spot:

Eventbrite https://www.eventbrite.ca/x/lunch-and-learn-june-30th-2021-tickets-158014424397