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The Future of Work after COVID-19: What Will Happen Next?

The Future of Work after COVID-19: What Will Happen Next?

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It’s been a year since most U.S. colleges and businesses shifted to an online, study-from-home or work-from-home mode in order to reduce the spread of the COVID-19 virus. Our work and home lives were disrupted, and it’s safe to say that until the country reaches the herd immunity level, our disrupted state will continue.

I covered two of the most recent articles predicting future changes in higher education in a blog post last week. Since most students attend college to get a better job, I thought they might have an interest in a recently published report from McKinsey and Company titled “The future of work after COVID-19.”

Authored by seven McKinsey partners and consultants, the report attempts to identify the lasting impact of the COVID-19 pandemic on the market demand for labor, occupational mix, required skills for the future workforce, and the future implications for workers, business executives, and policymakers.

Among McKinsey’s findings is a conclusion that “the physical dimension of work is a new factor shaping the future of the work, brought to the fore by health and safety considerations.” By grouping occupations based on physical closeness and the frequency of human interactions, analysts found that the work arenas impacted the most by the pandemic are leisure and travel venues, computer-based office work, production and warehousing, and on-site customer interaction businesses.

The pandemic accelerated three trends that could persist after countries achieve herd immunity. First, hybrid remote work will continue – McKinsey estimates that 20-25 percent of workers in advanced economies and 10 percent in emerging economies could work from home three to five days a week. These jobs are primarily in the computer-based office work arena.

This change is four to five times the level prior to the COVID-19 pandemic. McKinsey points out that this shift to more remote work will reduce demand for mass transit, restaurants, and retail in urban office centers.

The second trend that will be accelerated is e-commerce and the delivery industry. During the COVID-19 pandemic, e-commerce grew two to five times faster than before.

Jobs in travel and leisure have been disrupted by this trend, as have low-wage jobs in brick-and-mortar stores and restaurants. Conversely, jobs have increased at distribution centers and in the number of delivery drivers transporting products from distribution centers to homes and businesses.

The last accelerated trend includes the corporate utilization of automation and artificial intelligence (AI) to lessen the impact of disruption. More robots are expected to be installed in warehouses and distribution centers, and more self-service customer kiosks are expected in customer interaction arenas. Two-thirds of 800 senior executives surveyed by McKinsey in July 2020 indicated that they were increasing their investment in automation and AI “somewhat or significantly.”

McKinsey’s team found that the four work arenas most affected by physical proximity account for approximately 70 percent of the workforce in the six advanced economies they analyzed. The largest impact may be in large cities as the demand for these occupations decreases. Smaller cities may benefit, thanks to the increased numbers of computer-based office workers able to work from home.

Depending on how long these trends continue, McKinsey estimates that more than 100 million workers in the eight countries analyzed may have to switch occupations by 2030. This is 25 percent more than estimated prior to the pandemic for the six advanced economies and 28 percent for the U.S. The report also notes that workers without a college degree, women, ethnic minorities, and young people may be most affected.

Lower-paying jobs are expected to decrease in office support, customer service and sales, production, and food services. Higher-paying jobs are expected to increase in transportation services, science, technology, engineering, and mathematics (STEM) workers, health professionals, and health aides and technicians.

Companies will need to redeploy workers quickly. In order to accomplish this objective, McKinsey suggests that they consider recruiting and retraining based on skills and experience rather than academic degrees.

Also, policymakers should consider investing in digital infrastructure to ensure equitable access to this occupational mobility. As the numbers of independent workers increases, policymakers should consider innovative ways to obtain benefits for them.

Workers will need to learn more technological skills as well as social and emotional skills in order to advance forward to the higher-wage brackets. Companies will have to develop practices and programs to keep employees connected and on a career path while more and more of them work remotely.

Whether you access the 28-page Executive Summary or the 150-page detailed report, there are many detailed charts to review and ponder. From my perspective, the data and analyses presented by McKinsey support the points made by Allison Salisbury in her Forbes article.

If we want more people to enroll in college, colleges need to increase the number of stackable credentials offered and create more pathways to earning a college degree. McKinsey points out the future growth of jobs in technology and healthcare. The creation and proliferation of coding academies can be traced to the lack of practical IT training offered by colleges. Similarly, enrollment limitations in entry-level healthcare training programs at community colleges have led to increased enrollments at vocational schools.

Economies are complex. McKinsey’s Global Institute has collected and analyzed millions of data points and synthesized them in ways that business leaders, educators, and policymakers can understand. For post-pandemic strategic planning, I highly recommend including this report in all participants’ advanced reading packets. Those who ignore these trends will likely be on the losing side in the shifting economy.

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Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In September 2019, Dr. Boston retired as CEO of APEI and retired as APUS President in August 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. For four years from 2009 through 2012, APEI was ranked in Forbes' Top 10 list of America's Best Small Public Companies. During his tenure as president, APUS grew to over 85,000 students, 200 degree and certificate programs, and approximately 100,000 alumni. While serving as APEI CEO and APUS President, Dr. Boston was a board member of APEI, APUS, Hondros College of Nursing, and Fidelis, Inc. Dr. Boston continues to serve as a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), a member of the Board of Overseers of the University of Pennsylvania’s Graduate School of Education, and as a member of the board of New Horizons Worldwide. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. In August 2020, the Board of Trustees of APUS appointed him Trustee Emeritus. In November 2020, the Board of Trustees announced that the APUS School of Business would be renamed the Dr. Wallace E Boston School of Business in recognition of Dr. Boston's service to the university. Dr. Boston lives with his family in Austin, Texas.

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