Post-COVID Skills Mismatch – It is the time to start preparing

The pandemic has transformed working modes. With the ILO estimating that 81% of the global labor force is engaged in a work-from-home experiment, flexible and remote arrangements are likely to become the new normal. In the wake of the crisis, some 75% of global businesses plan to shift at least 5% of employees who previously worked on site to permanently remote positions, according to Gartner. BCG expects that more than 10% of workers are likely to switch to permanently remote work arrangements (for office employees, this portion could be as high as 30%).

The sudden need to work remotely online has triggered the acquisition of digital skills at scale, offering professionals new opportunities for both enhanced careers and increased income. In the UK, for example, the remuneration rates for roles that require digital skills are 29% higher than those for positions that do not require such skills, according to Burning Glass Technologies.

We expect that more than 10% of workers are likely to switch to permanently remote work arrangements.

The organization of work is likely to change, too. Some of this represents an acceleration of trends already in motion. For example, a 2018 Gallup report found that 36% of US workers were part of the gig economy. And a 2017 report from Upwork and Freelancers Union predicted that freelancers would become the majority of the US workforce by 2027. Meanwhile, the digital transformation will see a shift of focus from procedures to results. Simplified labor agreements and contract automation will make many roles, such as those in administrative functions, obsolete.

All this demands a strategic response based on holistic thinking about the relevance of the skills landscape to the future of work. While the measures that governments must take will need to accommodate developments across three distinct time horizons, all measures—both short- and long-term—need to be developed and implemented now, and with equal urgency. (See Exhibit 2.) Countries that emerge from the outbreak earlier than others will of course need to act faster on certain labor market initiatives.

Government Response Must Consider Relevance of Skills Landscape to the Future Work

To prevent erosion of the labor supply, the first three to six months will require a focus on retaining workers, including use of some of the same measures that governments are currently implementing—wage subsidies and extended social protections, financial and tax relief, and temporary labor redeployment.

The midterm focus (starting now but with a longer-term implementation horizon) will require a balancing of the labor market or redeployment of the available labor force to minimize unemployment. Measures to accomplish this include safety nets for gig workers, skills upgrades, and flexible labor reallocation.

Now is also the time to start preparing for the post-coronavirus future (a 24-month period, but with planning starting immediately) by adopting a broad-based strategy in which reskilling is the overarching imperative. This means giving the entire population access to lifelong learning opportunities and ensuring that workers are motivated and able to sustain their own continuous professional development and that access to work opportunities is universal and equitable.

ADDRESSING A WIDER SKILLS MISMATCH

None of this will be easy. The skills mismatch was a problem for governments even before COVID-19 arrived. It affected two out of five employees in OECD countries, prevented millions of people from fulfilling their potential, and created severe labor productivity losses. BCG analysis shows that the mismatch effectively imposed a 6% annual “tax” on the global economy and that now, as a result of the COVID-19 pandemic, the situation could cost 11% in terms of productivity or $18 trillion in unrealized GDP by 2025. (See Exhibit 3.)

Chosen excerpts by Job Market Monitor. Read the whole story @ Governments Must Fix the Skills Mismatch for a Post-COVID World | BCG