Work after Covid-19: How will the labor market change?
02.06.2020 | Terence Hielscher
After months of uncertainty and confusion, it feels like Germany is slowly starting to calm down again. As humans, we naturally adapt to big changes after some time and start going back to ‘normal’ once we get a grip on the situation. It is not until the peak of a crisis like the current one is over, however, that people start thinking about the future and what ‘going back to normal’ really means for them. Everyone who was part of the working society when Covid-19 struck – from employees to self-employed, from CEOs to interns – has had to deal with many changes regarding their profession, and now they all have to try and adapt to their ‘new normal’.
There is no answer to the question as to how the novel coronavirus will impact the future of work however, there are many predictions and throughout those, there is one common thread:
This global pandemic is mainly accelerating trends that experts have been talking about for years.
Remote work is here to stay
Working remotely has quickly become a part of millions of employees’ lives worldwide. Due to the current Coronavirus outbreak, managers suddenly find themselves leading entirely remote teams and employees find themselves without any direct supervision. The concept of remote work, however, is although it is not very common yet, nothing new to most people.1
Although remote work has been on the rise since 2005, the process of introducing and implementing it in everyday work life would have taken decades to come. Covid-19 is in a way forcing employees, their managers, and companies to get comfortable with the new normal – here and now.
The gig economy is on the rise
Now, for everyone who is not yet familiar with the term: In a gig economy, temporary, flexible jobs are the norm versus the traditional economy with full-time employees who focus on a lifetime career. Companies within the gig economy tend towards hiring freelancers and independent contractors instead of salaried employees.
The trend of the gig economy started well before Covid-19 stuck, mainly due to the easier access to talent all around the world and not at last due to the commitment of (most) freelancers to their jobs as they heavily rely on networking for future projects.
Covid-19 additionally accelerated the increasing popularity of the gig economy, especially due to the saving of overhead costs. Although full-time employees bear less risk in terms of loyalty, they also generate more costs. By outsourcing the work to contractors, a company can save between 20-30 percent2 of the annual cost of a salaried employee by eliminating for example social security benefits, office space and supply costs. Freelancers also reduce risk in terms of commitment as they are easier to terminate if their work is not satisfying and thanks to online platforms also a lot easier to replace in a short period of time.
Retraining and upskilling
Considering that 85 percent of jobs present in 2030 potentially do not exist yet,3 ongoing learning is especially for Millennials and Gen Z workers essential. For employees and freelancers, staying relevant means constantly re- and upskilling to not fall behind on the changing demands of the market. Companies on the other hand have to offer room for development. As especially Millennials and Gen Z employees put a lot of effort into improving themselves constantly, they also expect their employers to support them in their personal growth. Job seekers will no longer apply to positions without options for development which urges employers to implement an entirely new approach to talent development and career progression within the company.4
The current Coronavirus outbreak is a good example of how quickly ongoing learning can become an essential part of any workforce. Many companies were forced to let go of a great portion of their staff, which also means that all remaining employees have to quickly take over their tasks and learn their skills to compensate for the lack of personnel. Now employees who are constantly learning and improving themselves anyways will have an easier time adapting to sudden new responsibilities.
Advantages of employee benefits
As many employees had no other choice but to stay home these past few months, many employers have added to employee support systems. During this crisis companies are really understanding how important their employees’ engagement and motivation is, and that a healthy mental and emotional wellbeing is the basis for this. Whether it is monthly team meetings, weekly yoga sessions or daily catch-ups – many companies are now more aware of the influence of employee support systems and are most likely to keep them in the future – no matter where their employees are working from.
As we slowly start settling into our new normal, we at MoBerries believe that despite all that happened one thing has not changed and will continue to be the basis for leading a great workforce: Putting your people first. Whether they work from home or if they are contractors, whether they want to personally develop themselves or if they are currently struggling – As their employer it is in your best interest to ensure that their needs are met so they can work to their full potential.