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What will the jobs market look like after Coronavirus?

What will the jobs market look like after Coronavirus?

The jobs are gone forever. Tweeting on Thursday evening, former presidential candidate Andrew Yang suggested that 42% of the jobs lost due to Covid-19 are not coming back. In the United States that equates to 15 million people who will likely struggle to get back into the jobs market after this crisis.

The situation is more complicated in the United Kingdom, with the furlough scheme put in place by the government largely keeping unemployment low and helping companies remain solvent. However, despite the extension of the scheme through until October, the long-term impact to the jobs market will likely be stark.

Economic crises often prove a catalyst for wholescale economic change; the 2008 financial crisis saw the loss of many manufacturing jobs that have since been outsourced or been replaced by automation. The trend is clear throughout history, with the jobs market fundamentally realigning following the major economic shocks.

Coronavirus is likely to cause a shift starker than many previously seen, with many companies rapidly changing the way they operate to stay afloat, with these changes unlikely to simply snap back when the economy recovers.

Evidently the big winners of this crisis have been the online and technology companies, with Amazon taking on an estimated 175,000 workers during the crisis so far. Many brick and mortar businesses have equally seen their online presence surge, with the likes of Waterstones and WHSmith seeing a surge in online sales as their shops have remained closed.

Estimates by Alvarez & Marsal have shown that for two-thirds of British retailers, a 10% reduction in sales would result in negative cash flow, threatening the viability of these businesses.

This is against a backdrop of a 70% fall in cashflow for retailers, meaning that almost all UK businesses are likely in a negative cash flow situation, even with 7 out of 10 British firms furloughing staff.

Without an ability to move online, even with government protections, the long-term viability of these companies is clearly in jeopardy, whilst many online retailers are seeing their businesses thrive. The Coronavirus pandemic is perhaps providing a disquieting foreshadow for brick and mortar shops, with the economic crisis likely to catalyse a shift online.

The workplace will also significantly change following the pandemic. Although most businesses currently plan to move staff back into offices after the pandemic, the ability for many service sector workers to work from home suggests a clear future in which this will become more commonplace.

For some workers, this may be beneficial. Flexible working hours might become more frequent with the workforce staying at home, perhaps benefitting those with at-home commitments and responsibilities that might usually make in-person working more difficult.

The new video-conferencing technologies such as Zoom and Google Meet have proven how successful remote working can be for teams, perhaps making it more likely that team members can work not just in different locations, but across different time zones and remain efficient.

Despite the Coronavirus pandemic squeezing the jobs market, this means it could be younger workers who are set to benefit the most, with a higher take up of technology and online skills amongst this section of the workforce.

The hardest hit will indeed be the mid-career workers with a specific skill set that matches a job market that no longer exists, one that has been changed rapidly and beyond recognition into a futuristic online marketplace favouring those highly skilled in new technologies.

We may only be months into the Coronavirus pandemic, but its effects will change the economy and the jobs market beyond recognition. The world of work will be very different when we emerge weary-eyed from lockdown and stare into the reality of a new age.

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