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McKinsey study reports: Post-pandemic economy to press 107M workers to switch occupations

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One in 16, will need to find a different occupation by 2030 in our post-COVID-19 scenario

Tricia Ang | 19 March 2021

Image by @juvx on Unsplash

As the rate of coronavirus vaccination increases, global economic growth will rise by 5.5 per cent this year, after slipping by 3.5 per cent in 2020, according to the International Monetary Fund.

But businesses and staff would definitely continue to make substantial post-pandemic changes for the rest of the decade, McKinsey stated.

“The pandemic has, for the first time, elevated the importance of the physical dimension of work,” according to McKinsey, which studied the extent to which several “work arenas” can operate without a loss of productivity or effectiveness.

McKinsey awarded a high “physical proximity score” to medical and personal care, such as gyms and hair salons, and a low score for transportation of products and outdoor production and maintenance, such as farming and construction.

“COVID-19 may propel faster adoption of automation and AI, especially in work arenas with high physical proximity,” researchers said.

Key statistics:

  • In a computer centric work environment, 70% of time could be spent working remotely without losing effectiveness, compared to most other environments, where only 5% to 10% of work can be done remotely
  • A global McKinsey study reported that during the recovery from the global pandemic,  two out of three senior executives plan to increase investment in automation and artificial intelligence (AI), while 107 million workers in eight countries may need to change occupations by 2030
  • Office space could be reduced by 30% on average if 20% to 25% of the workforce in advanced economies could work from home between three to five days per week. This could possibly decrease demand for public transportation and downtown restaurants and retailers

According to McKinsey, several businesses in this pandemic have used automation to slash ‘workplace density’ by speeding up adoption of robots, hospitals and Hotels have picked up delivery robots, and stores replacing cashiers with self-checkout kiosks.

Companies will undoubtedly intensify the automation of “customer service and computer based work environments,” which may lead to a seven to eight percentage point spike in the number of staff being replaced.

More than half of low-wage employees in declining jobs are going to have to migrate into better paid jobs with different qualifications, said McKinsey.  Healthcare, transportation, science, technology, engineering and math will give a growing portion of employment opportunities, while retailing, hospitality, food service, production work  and office support provide a lowered share of employment.

“Across the eight focus countries, 107 million workers, or one in 16, will need to find a different occupation by 2030 in our post-COVID-19 scenario,” McKinsey said. Researchers focused on China, France, Germany, India, Japan, Spain, the U.K. and U.S.

“Remote work and virtual meetings are likely to continue, albeit less intensely than at the pandemic’s peak, with knock-on effects for real estate, business travel and urban centers,” McKinsey said. “Employers and employees who can work from home agree that remote work—at least for part of the workweek—is here to stay.”

Companies will likely reduce business travel by 20% compared with pre-pandemic levels, the study found, which would have “a significant knock-on effect on employment in commercial aerospace and airports, hospitality and food service.”