Changes in the world of work

The world of work has undergone dramatic upheavals over the past couple of years – not least a wholesale flight from the labour force. Whether the Covid pandemic triggered these changes or merely accelerated longer-term trends is moot. But what seems apparent is that many of these changes are becoming embedded, according to the Pictet-Human Advisory Board.

No one anticipated the great resignation, as the rapid withdrawal people from the workforce is called. But the pandemic seems to have caused demographic, social and technological trends to converge in such a way that has encouraged people to reconsider the way they conduct their working lives.

According to the Advisory Board: people are looking inward and seeing different possible selves. This isn’t a new phenomenon, the trend was already in place before the Covid outbreak. Though it is the rapidity with which it took hold after the spread of the pandemic that has been surprising.

One explanation for the sudden surge in resignations is high rates of personal savings, which have grown thanks in part to income support and other pandemic stimulus efforts.

That’s particularly true of people over 55, many of whom didn’t return to the workforce as economies rebounded. Unlike in the past, it’s not that they left unrewarding or unsatisfying jobs for better ones. They just disappeared and we can’t be certain what they’ve gone on to do. 

In some cases they will have decided to retrain or to volunteer for charitable work. Education is typically becoming a life-long pursuit. This is fueling demand for less formal training but more varied certificates. There is evidence that people are turning away from professional training, like law or business administration where post-graduate admissions have been dropping off over recent years.

Working smarter not harder

Average working hours per worker over a full year

Some are preferring to develop their manual skills, from plumbing to printmaking, and on-line learning means that the sources of education has been globalised. This has allowed people to shift from long-term commitment to single employers to portfolios of paid and unpaid jobs. 

Tight labour markets mean that companies are having to be increasingly flexible in how they attract workers. Many are undergoing major workforce experiments, often beyond work-from-home concessions. It’s a very brave chief executive who is determined to go back to how things were pre-pandemic.

Some of this is likely to include automation of more functions – for instance, robolawyers and roboaccountants are likely to take over mundane tasks, leaving their human counterparts to do the more highly skilled functions. In fact, in 60 per cent of jobs, around a third of tasks can already be automated.

In other cases it will mean making the workplace competitive with the home for atmosphere. So there will be an increasing mix of what makes offices successful – serendipity as a product of accidental interactions, scope for effective mentoring and coaching, the human touch of meeting colleagues – with the benefits of home work, including less time spent commuting, fewer interruptions and more comfortable spaces. 

This picture is complicated by inflation. Exceptionally low rates of unemployment and large numbers of vacancies mean workers currently have some leverage over employers. But unless they unionise, some of these gains will be lost to inflation. Rising prices will increase the need for people to supplement or boost their earnings, which will push them more towards the marginal and less-favoured jobs and force them to work longer. Tighter monetary policy that accompanies inflation will, in turn, reduce employment opportunities as business investment cools. 

However, the pendulum of power swings between workers and their employers, the face of employment has undoubtedly changed. There might be a reversal of the great resignation if economic conditions prove more difficult in the coming years, but the re-direction of the nature of employment seems likely to stick. A wide spread of sources and types of education will help people develop their skills and the development of technology that allows learning and working to be done remotely ensures that the future of work will be different from its past.

The trends and technologies discussed in this article are some of the investment themes that inform the Pictet-Human strategy, which centres on services that help us adapt to the demographic and technological shifts that are changing our lives.