Assuming the effects of COVID continue for at least a few more months, it seems unlikely that the world of work will ever ‘go back to normal’ now. Much more likely, in our view, that we will be faced with a long term ‘new normal’. We take a look at what might happen in that situation.
The white-collar revolution
Many of the jobs being hardest hit now in the first wave of impacts on work are those that involve intrinsically face-to-face work. This applies to lots of jobs in hospitality, sport, transportation, and care, and it seems fair to assume that as soon as infection with the virus by close contact stops being an issue, many of these types of jobs will return. There may be some contraction, but in the longer term, it will be hard to replace jobs that can neither be done by a remote person nor a robot.
But that is not the case for jobs that are face-to-face now but could be automated and is also not the case for many of the jobs being done at home at the moment by people working in front of their computers, including jobs in medium- to high-skilled positions. These types of jobs may look quite safe and secure and many of them are relatively well paid. We think these jobs will continue to exist and grow, but the shields of safety around them may turn out to be illusory as workers safely ensconced behind their screens find themselves in greater competition with others from all over the world. It will become increasingly plain that their jobs can be done by anyone, from anywhere.
And if physical locality ceases to be an issue, more and more businesses will start to ask why they need to pay big-city salaries when someone living in a cheaper location could do the job just as well. They may then ask to cut the salaries of people who live in less expensive areas. Facebook was one of the first to make this connection when it announced a new policy of pay based on location several months ago. All this is globalisation on steroids and will inexorably lead to widespread fragmentation of the workforce.
Of course, there will be limits: many jobs are highly specialised and not subject to a vast pool of talent and although competition will increase, opportunities will also grow. Platforms for financial and legal services are popping up, online retail is burgeoning, and non-local jobs in sectors like IT have existed for decades – and these trends will be amplified. There are also certain aspects of healthcare and education that will be delivered solely online in the future and, in fact, just about any kind of business or service is likely to see opportunities to deliver a growing part of their service without face-to-face contact in the future. Crucially, what we are now calling ‘a-typical’ work, will stop being ‘a-typical’ and start being just ‘typical’.
The ‘new typical’
As with anything, there will be winners and losers in the ‘new-typical’ workplace. It may be an opportunity for some, particularly if their new gig status is coupled with no other risk of insecurity (socio-economic vulnerability or lack of unemployment protection). It could also have the effect of lifting people in some countries, particularly developing countries, as their access to work online vastly increases. Therefore, the ‘levelling’ mentioned above may happen in this respect: wages may be driven down in more advanced countries and regions, and up elsewhere.
The new outsourcing
The growth of call centres seen in the 1990s was the forerunner, but in the second big wave of COVID-effects on work, we may see a tendency for large corporations to reduce their payroll and outsource more projects to ‘project consultants’ and the like – essentially whitecollar gig workers – who work fluidly within an organisation for the duration of a project, before moving seamlessly on. As the tendency already is for big corporates to downsize owing to COVID, this transition to the outsourcing of project work will seem like a natural one and could spur the growth of a plethora of nimble new consultancies.
But as with any major upheaval, there is a risk that the benefits of change won’t be felt by all. Governments will be forced to consider how to manage the new situation. How it is done will no doubt vary greatly across the world, based on local political and economic conditions, but the likelihood of increased state involvement in the world of work will follow on naturally from the increased state involvement in the COVID-related policies that we are already seeing.
What we are likely to see is a tendency towards short-term project work, self-employment, and crucially, competition for the same pool of work from all over the world. This will cause increased fragmentation of the big corporates into smaller fixed workforces and there will be an increase in project work done in small external pockets by individuals – to the extent that ‘atypical work’ becomes ‘typical’. Finally, there will be a move towards gigification which encompasses a ‘gentrified’ variety involving middle-class workers behind computer screens.