How can COVID-19 pandemic affect your employment?
Reducing office workers by one-third, the final retreat of retailers online and the radical renewal of healthcare and education are just some of the changes that await us
The world economy has experienced several global crises over the past 30 years, but none of them has changed our lives so rapidly. The coronavirus pandemic is destroying transport and production chains at an incredible speed, forcing states to return borders and rebuild key public institutions, universities are rapidly moving to distance learning. But this is not a step into the abyss, it’s the path to a new reality, which is based on the technological revolution, on the achievements of the industry. However, the road will not be easy.
Cost Savings and the End of Office Plankton
Thousands of companies around the world are moving their employees to remote employment. The trend to expand work outside the office, which has been discussed over the past few years, at one point has become a reality for millions of employees around the world. Most likely, this forced global experiment will be successful, which will inevitably lead to a radical reformatting of the labor market and, therefore, the emergence of new social challenges.
The main thing that leads to a reduction in the number of employees working in the office is cost savings. It will be possible to reduce rental costs, reduce staff (secretaries, security guards, drivers), as well as move from the hierarchical structure of the company to a cloud-type structure. We see the upcoming simplification of business organization, the simplification of large organizations in general, and quite severe savings in organizational costs for controlling employee behavior – the time of arrival at the office, the duration of the lunch break, and dress code will not be so important. Only the results of labor will be monitored.
This will get rid of such fetishes of the past as a workweek or workday. After all, if a transition to a new labor relationship is possible, where the product is essential, then the time spent on the production of the product and the place are of no interest to anyone. However, this is also a massive chance for mothers and fathers with young children. The birth and upbringing of a child cease to be the basis for interrupting a professional career.
The cloud-based organization, control of results, simplification of labor agreements will make the maintenance of bloated back-offices unnecessary. As a result of all changes, the number of office employees may be reduced in some cases by one third.
In a number of countries, this will sharply raise the question of what to do with unclaimed people. It is possible that even the American economy, which had previously avoided substantial unemployment, would face this problem. But the quality of unemployment will also change. Until now, it was believed that if you are educated, smart, and ready to work, you will find work anyway. Well, if you are unemployed in a big city – this is your choice.
In the new reality, everything will be tougher. There will be losers who are not bad workers, but who just turned out to be slightly worse than other workers of the same kind. The phenomenon will become very similar to the unemployment of industrial workers in the first half of the twentieth century when job loss was perceived as a social challenge. And this time, it will be seen in the same way. Because it’s one thing when a person voluntarily chose not to look for work, and another thing when the narrowed demand for workers increases the likelihood of “bad luck” for them.
Trading without rent
A couple of years ago in Beijing, I was struck by the emptiness in the shops – a couple of buyers roamed the entire huge floor, and these were foreigners. Chinese colleagues enlightened – so we have been buying everything online for a long time. American and European stores resisted longer.
The crisis will push noticeable changes in retail. Compare the prices of electronics (yes, anything) in online stores and regular retail chains or company stores – the difference starts at 20 and often ends at 50%.
E-commerce will finally replace the traditional one, leaving it with separate niches such as expensive boutiques or supermarkets. But in parallel, the delivery industry will grow sharply. It will become more convenient and more accurate because people will not agree to wait for orders for hours at the expense of their time. The system of clothing and shoe sizes is detailed, and the fitting will take on a simple digital dimension – the virtual fitting engines have already been developed. If today the chains still resist labeling of goods, tomorrow they will realize that this is their advantage over the “wild” sellers.
The city expects a drop in demand for office and retail real estate; these markets will shrink by 25 and 50%, respectively. The fate of shopping centers is to become family entertainment centers, food courts, and coworking. Yes, they will continue to be interspersed with showrooms, where you can “touch” new things and devices. But buyers at least will not carry what they bought with them. And coworking in shopping centers and on-site stores will be especially in demand in residential areas: not all workers staying at home can afford to set aside a separate room for work.
Savings in retail spaces and partly in sellers will reduce costs by 20-30%, even taking into account the increased costs of the delivery system. It will increase the profitability of the business or entirely go to lower prices. It will be decided in the struggle of significant retail for survival. On the side of big players, reputation, guarantees, and prompt service will play against unknown companies. For durable goods – life cycle contracts. Instead of buying and delivering a TV – connecting and using it without problems for five to seven years, timely updating of the model. Who will own the item “TV” in this case is not so important.
In my opinion, large retail chains will not only survive – they will win.
Tectonic shifts in the labor market can lead to a completely different structure of social relations. It is quite possible, even to new social battles, similar to the struggle for the socialism of the first half of the twentieth century.
An alternative could be a softer European model of the distribution of “no work” for everyone. In fact, in one form or another, a guaranteed income model may start to function, in which, on the one hand, you do not work and get relatively decent money, on the other, unemployment is distributed among all members of the society by legislatively restricting working hours, for example, four working days. But such a maneuver is ineffective in the long run. When removed, the line between working and non-working time is conditional, and the employer will hire only productive people.
The state will have to deal with the problems of citizens who lose their jobs and their usual way of life. A real reboot awaits him. Today we relate to the state as a kind of regulator of what we are doing. Or we perceive it as something not very necessary. In the second case, a kind of spontaneous liberalism manifests itself, which has developed in our societies. Neglect of the state applies to Europe, and Russia, and the United States.
If the crisis associated with coronavirus lasts more than a year, in the public mind in many countries of the world, a policy of sustainability will become more important than a policy of growth. The state will be in demand primarily as a guarantor, a mechanism for ensuring sustainability. Such an increase in the value of the state will be associated with an increased willingness of people to obey it, to give up part of their rights in a crisis.
The state as a stabilizer and state policy aimed not at growth, but at sustainability, not at changes, but at reproducing predictable living conditions for people who themselves will continue to set goals, can be the strongest result of the current crisis. Growth will become a problem for individuals, a common goal – sustainability.
The new medicine, new moral
The coronavirus pandemic has demonstrated humanity’s readiness for solidarity; peoples and governments made an important choice between economic growth, income generation, and the preservation of the lives of older people. Such a decision is no less historically important than the formation of a pension system and public medicine in the first half of the last century.
The value of a person is absolute; it is not limited to human capital – its ability to work and generate income for its family, employer, and state. These words materialized in mass behavior, and they became an economic fact of the beginning of 2020. For the first time in history, the world can be proud of the decline in GDP. Let’s hope that in a few months, this reason for pride will disappear.
Nevertheless, medicine will receive a serious impetus and a change in the focus of its development. If today in developed countries this is largely a private matter, everyone’s private responsibility for their health, where you buy insurance depending on your income, then a shock from a pandemic is likely to lead to an expansion of the area and scale of public responsibility for the life and health of citizens. Moreover, the digital revolution provides fairly affordable solutions in this area. Early diagnosis and remote monitoring of the condition of chronic patients – the projection of the “Internet of things” on the “Internet of the body”; free or preferential provision of medicines – all this ultimately can change the ratio of insurance and state (charity) medicine in favor of the latter.
Global University, Distributed University
Incredible changes are taking place in the field of education, which has been at the forefront of the global crisis transformation. In full view of almost a few days, full-time formal education completely stopped, but universities and schools in most countries did not stop, but continued to work remotely or were preparing to do so.
The changes have been accumulating for almost ten years. Global MEP platforms are snowballing – massive open online courses. The number of their students is already comparable with the number of university students. People, wherever they are, can take courses at Harvard, Yale, London School of Economics, Moscow State University. In advanced universities in the world, the curriculum contains hundreds of online courses, mainly “alien” professors. Digital platforms are being developed in schools that offer many options for lessons and independent work.
The new methods, with all their effectiveness, were rejected or ignored by the traditionalists from the threshold, and the majority of traditionalists in education. Work in the conditions of crisis and forced isolation will force everyone literally to master modern technologies in practice. Upon overcoming the crisis, the school will no longer return to its traditional state.
The crisis will push the abandonment of obviously obsolete forms of teaching. First of all, lectures, the form of which does not change from the XVI-XVII centuries. Before the crisis, they were visited on average by 15% of students. Today it is already obvious that an online course is a much more mobilizing form than a standard lecture. It has more built-in controls, and the development of the material is more sustainable. The main advantage for the student is that you can listen to such a course at any convenient time. Many educators claim that even in online workshops provides a better concentration of participants.
Online technologies will allow people within their educational program not only to choose courses of eminent universities but also to mark them.
This kind of marking can be called a micro degree, which a person wants to indicate in his resume, along with an indication of the degree of undergraduate or master’s degree from a university of lesser prestige. A new signal will appear in the labor market, which will significantly affect the selection of workers.
As the next step in the development of education, a kind of composite degree will arise when a student independently chooses online courses for himself from a set of possible ones and finds an educational institution that recognizes them and issues a bachelor’s or master’s diploma. In the field of mass higher education, universities-integrators will appear.
But neither the university nor the school will leave the stage. Man is a social being, and the quality of education directly depends on the quality of the educational environment, which cannot all be virtual. Coworking and laboratories instead of lecture halls and classrooms. A significant increase in the recreational and sports component of educational spaces. In the coming decades, humanity will invest in the construction of new campuses.
New technologies will make education less formal and more distributed. Educational giants will enter educational content production. Educational products will lose university (school) academic status, and interactive digital systems will take the place of traditional textbooks. An educational environment will appear where the difference between primary and secondary education will disappear. As a result, when this crisis does end, the world around us will turn out to be completely different.