The impact of the crisis on the workplace Part III The immediate impact on job

Posted by HR Tech Partnership on November 23rd, 2020

The coronavirus crisis has not only caused drastic changes for businesses and employees but has also threatened the livelihoods of many. Worryingly, the proportion of jobs that are at risk are spread evenly across sectors and across the full range of societal demographics and economic backgrounds. On average, as a recent McKinsey survey has revealed, 24 percent of all UK jobs have found themselves at risk.

As has been discussed in our previous blogs, some sectors have been harder hit than others, and this is reflected in the number of jobs in each that are currently threatened –

  • Jobs in the retail and wholesale sector are the most at risk, with 1.7 million (some 22 percent of the total 7.6 million) expected to be lost. Demand for labour in online retail has naturally gone up – with the surge in home deliveries – but this is outweighed by the number of temporary high street store closures.
  • A sector that is starting to recover which has nevertheless been the second hardest hit is the accommodation and catering industry. 1.2 million relatively low paid workers in these sectors are at risk of job loss.
  • Despite ongoing campaigns to reopen theatres and other performance venues, the entertainment sector is highly vulnerable. So too are jobs in the construction industry and in air travel.

Outside of these commercial trends, there are other factors that have increased the number of furloughed workers and job losses. It is not possible to work remotely in 60 percent of occupations, and the physical proximity to others necessitated by the nature of certain jobs (as is the case for bartenders) has made them unsafe to continue.

These are, overall, global trends. However, one factor that has protected a higher proportion of UK retail jobs than those in Europe is the fact that a significant proportion of retail (one-fifth of sales) was conducted online anyway before the advent of the lockdown. This has also helped retail jobs in the US. However, in the United States, the impact on jobs in the health and social care has been far greater. As this sector is privatised, it has the third-highest proportion of at-risk jobs of any US sector.

It is also easy to glimpse some worrying patterns among this data – chiefly, the likelihood of a worker being furloughed or losing their job is directly inversely proportional to their income. This is to say that it is the poorest in society who are most at risk. To highlight this further –

  • Certain occupations are more vulnerable than others. 44 percent of jobs are at risk among elementary occupations – such as cleaners, waiters, and kitchen assistants – which employed 3.3 million people last year.
  • Workers who remained for longer in education are less likely to lose their job. Only one-quarter of employees in the hospitality, retail, and construction sectors have higher education qualifications.
  • Women and other minority groups are more vulnerable, as are workers living in poorer regions.

A final group who are suffering disproportionately because of this pandemic is the young. According to recent research published by the International Labour Organisation, one in six 18 to 29-year-olds have stopped working due to the coronavirus, constituting as many as 200 million people out of work worldwide. Even for those who have remained in employment, working hours have diminished by a quarter on average. The pandemic has therefore had a threefold impact on young people –

  • Their employment prospects have been destroyed. This is particularly true of graduate employment.
  • Education and training have been severely disrupted for those not yet in the world of work.
  • The prospects of moving between jobs have been diminished by obstacles such as border restrictions.

There has been however been one constant. Before the coronavirus, many young people were part of the gig economy – a sector which was growing as the number of full-time workers was expected to decrease by 30 percent. This trajectory has remained roughly the same, as a higher number of young people are struggling to find full-time work.

What does the future look like for young people?

Professor Jesse Rothstein, of the University of California, claims that recessions – even short-lived ones –can have a prolonged impact. We can look for evidence of this in graduates who entered the workforce immediately after the global financial crisis of 2008, who are still suffering in terms of employment rates and income levels more than ten years later. Professor Lisa Kahn, of the University of Rochester, concurs and finds that the same is true of students who graduated at the time of the 1980s recession.

The economic effects of this virus are therefore going to be felt for a long time. As is always the case, it will also be the people in society who were already the most vulnerable who are going to end up worse off. 

The London based HR TECH Partnership runs a Human Capital Digital Innovation Hub to facilitate learning and adoption by corporates of agile start-ups around Talent and Workplace productivity. It also has a People Tech investment venture which funds early-stage start-ups incorporating AI and leading-edge technology. The team and most of its stakeholders have senior corporate experience and a good understanding of large organisations.


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