The world is currently navigating through tumultuous times that necessitates a suite of critical policies to bolster resilience in every area. For the past two years, the Covid-19 pandemic has drastically affected global labor markets, paralyzing economies via enforced lockdowns and movement restrictions, causing soaring unemployment rates, and driving an exodus of talents out of the job market.
The International Labour Organization recently published a study to highlight the pandemic’s devastating impact on global labor markets. An estimated additional 21 million people still remain out of jobs, compared to unemployment rates in 2019. Total hours worked globally is also two percent lower than pre-pandemic levels.
The pandemic has also devastated people’s ability to earn incomes, plunging an estimated 30 million adults into extreme poverty (living on $1.90 or less per day) due to unemployment. At the same time, many countries were overwhelmed with the high demand for unemployment benefits and other forms of social security assistance during the height of the pandemic when businesses suffered due to closures and restrictions.
A closer examination of the issues at hand will also shed light on the many small and medium businesses that faced enormous commercial disruptions in employment and hours worked, with minimal financial reserves to keep them in operation. Sectors of seasonal natures also faced high dismissal and unemployment rates of their temporary workers, such as agriculture, construction, tourism, and hospitality.
Enterprises were also restricted with hiring migrant workers due to border controls at the height of the pandemic, which also affected economic growth. Furthermore, an exodus of female workers was evident during the pandemic, which accompanied closure of childcare and social care facilities, and thus, left workers prioritizing care duties for their dependents.
Notable shifts in the world of work
Such dire circumstances inspired employers to embrace a range of innovative solutions to stay resilient, such as investment in digital innovations, hybrid working models, and employee wellbeing. Meanwhile, other influential forces are still at play which are also creating notable shifts in the world of work. For example, various countries with an increasingly ageing population will face seismic shifts in their labor markets.
A study published by the OECD forecasts a global decrease of the working-age population by 10 per cent by the year 2060, with many countries facing a sharper decrease by 35 per cent or more. This trend will challenge governments and enterprises to reform skill-retraining, retirement age, family-friendly policies, and immigration regulations to account for sizable labor shortages.
The world of work is evolving in a complex manner with a multiplicity of factors driving these changes. As such, policymakers should formulate a robust roadmap that enables economies to navigate shifting trends and high-risk scenarios with resilience and agility.
Governments should establish a foresight unit that monitors emerging and future trends in the labor market. A horizon scan would summarize critical information for decision-makers, such as a rating of high-risk scenarios, future strategic sectors, critical jobs and employment rates, jobs that will be lost to automation and other factors, required qualifications and skills needed to deliver optimal productivity targets.
To cater to the shifting demands of the labor market, education and lifelong learning systems would need to be reformed. As such, educational programs would need to equip students with a suite of foundational skills in technology, social and emotional intelligence, cognitive skills, creativity and innovation, communication, leadership, teamwork, and scientific research and development – all of which will form the backbone of future strategic sectors. Current workforces should also be up-skilled and reskilled to transition to in-demand sectors. Moreover, job generation programs should nudge workers to pursue opportunities in the private sector or entrepreneurial activity.
Adopting digital work solutions
The Covid-19 pandemic has spurred an acceleration of adopting digital work solutions, ranging from videoconferencing, remote work, virtual collaboration tools, and e-commerce. Evidence points out to the numerous benefits reaped by governments and enterprises from these investments, such as speedy service delivery, accurate data collection, reduced operational costs, wider market coverage, and boosted productivity. Interestingly, employers were able to access brilliant pools of talent from all over the world via adopting the concept of remote work.
Retaining exceptional talents will be congruent with business growth and success. Therefore, a number of important schemes must be introduced, ranging from attractive compensation packages, training and development, health insurance, wellbeing programs, and pension enrollment.
Work-life balance has received considerable attention in the past few years, with many governments and enterprises shifting towards shorter workweeks, flexible working arrangements, remote work, diverse family-friendly leave policies, or hybrid working models.
At the same time, it is important for governments to design social protection systems for workers who have had to temporarily exit the labor market for unforeseen circumstances. Assistance should be designed in a way that is universal, resilient, and financially sustainable.
The world of work is experiencing salient reforms, necessitating visionary policies that capitalize on the lucrative opportunities. Governments at the forefront of planning and implementing pioneering solutions will unlock sustainable gains that will ensure the resilience of their labor markets.
Sara Al-Mulla is an Emirati civil servant with an interest in human development policy and literature