COVID-19 has accelerated three broad trends that may reshape work after the pandemic recedes
The pandemic pushed companies and consumers to rapidly adopt new behaviours that are likely to stick, changing the trajectory of three groups of trends. We consequently see sharp discontinuity between their impact on labour markets before and after the pandemic.
1. Remote work and virtual meetings are likely to continue, albeit less intensely than at the pandemic’s peak
Perhaps the most obvious impact of COVID-19 on the labour force is the dramatic increase in employees working remotely. To determine how extensively remote work might persist after the pandemic, we researched its potential across more than 2,000 tasks used in some 800 occupations in the eight focus countries. Considering only remote work that can be done without a loss of productivity, we find that about 20 to 25 percent of the workforces in advanced economies could work from home between three and five days a week. This represents four to five times more remote work than before the pandemic and could prompt a large change in the geography of work, as individuals and companies shift out of large cities into rural areas and small towns. We found that some work that technically can be done remotely is best done in person. Negotiations, critical business decisions, brainstorming sessions, providing sensitive feedback, and onboarding new employees are examples of activities that may lose some effectiveness when done remotely.
Some companies are already planning to shift to flexible workspaces after positive experiences with remote work during the pandemic, a move that will reduce the overall space they need and bring fewer workers into offices each day. A survey of 278 executives by McKinsey in August 2020 found that on average, they planned to reduce office space by 30 percent.
Remote work may also put a dent in business travel as its extensive use of videoconferencing during the pandemic has ushered in a new acceptance of virtual meetings and other aspects of work. While leisure travel and tourism are likely to rebound after the crisis, it is estimated that about 20 percent of business travel, the most lucrative segment for airlines, may not return. This would have significant knock-on effects on employment in commercial aerospace, airports, hospitality, and foodservice. E-commerce and other virtual transactions are booming.
Many consumers discovered the convenience of e-commerce and other online activities during the pandemic. In 2020, the share of e-commerce grew at two to five times the rate before COVID-19 (Exhibit 2). Roughly three-quarters of people using digital channels for the first time during the pandemic say they will continue using them when things return to “normal.”
Other kinds of virtual transactions such as telemedicine, online banking, and streaming entertainment have also taken off. Online doctor consultations has grew more than tenfold between April and November 2020. These virtual practices may decline somewhat as economies reopen but are likely to continue well above levels seen before the pandemic.
This shift to digital transactions has propelled growth in delivery, transportation, and warehouse jobs. In China, e-commerce, delivery, and social media jobs grew by more than 5.1 million during the first half of 2020.
2. COVID-19 may propel faster adoption of automation and AI, especially in work arenas with high physical proximity
Two ways businesses historically have controlled cost and mitigated uncertainty during recessions are by adopting automation and redesigning work processes, which reduce the share of jobs involving mainly routine tasks. In a global survey of 800 senior executives in July 2020, two-thirds said they were stepping up investment in automation and AI either somewhat or significantly.
Many companies deployed automation and AI in warehouses, grocery stores, call centers, and manufacturing plants to reduce workplace density and cope with surges in demand. The common feature of these automation use cases is their correlation with high scores on physical proximity, and research finds the work arenas with high levels of human interaction are likely to see the greatest acceleration in adoption of automation and AI.
3. The mix of occupations may shift, with little job growth in low-wage occupations
The trends accelerated by COVID-19 may spur greater changes in the mix of jobs within economies than we estimated before the pandemic.
We find that a markedly different mix of occupations may emerge after the pandemic across the eight economies. Compared to pre-COVID-19 estimates, we expect the largest negative impact of the pandemic to fall on workers in food service and customer sales and service roles, as well as less-skilled office support roles. Jobs in warehousing and transportation may increase as a result of the growth in e-commerce and the delivery economy, but those increases are unlikely to offset the disruption of many low-wage jobs.
Demand for workers in the healthcare and STEM occupations may grow more than before the pandemic, reflecting increased attention to health as populations age and incomes rise as well as the growing need for people who can create, deploy, and maintain new technologies.
Before the pandemic, net job losses were concentrated in middle-wage occupations in manufacturing and some office work, reflecting automation, and low- and high-wage jobs continued to grow. Nearly all low-wage workers who lost jobs could move into other low-wage occupations—for instance, a data entry worker could move into retail or home healthcare. Because of the pandemic’s impact on low-wage jobs, we now estimate that almost all growth in labour demand will occur in high-wage jobs. Going forward, more than half of displaced low-wage workers may need to shift to occupations in higher wage brackets and requiring different skills to remain employed.
