Dive Deeper: How COVID-19 has accelerated the future of work
The COVID-19 pandemic has dramatically accelerated the use of technology. Early indications suggest that many CEOs believe there may be a considerable benefit to remote work too. At the height of the first wave of COVID-19, Zoom had 300 million daily meeting participants. At the Chamber, we have been working from home and hosting online and hybrid events for the Calgary business community since March – including our first ever virtual Small Business Week. For several years, these trends have been on the horizon: the future of work is more technology, automation, and artificial intelligence (AI).
For workers in the knowledge economy – where work is primarily knowledge-based and uses critical thinking skills rather than the service sectors and trades which includes these skills combined with manual labour – this means that the skills needed for work are changing. At the same time, organizations are adapting, and some people will be more impacted than others. Regardless of how long the COVID-19 pandemic lasts, it’s clear that the nature of work for many has and will continue to change. Below, we dive deeper into some long-term trends that are changing how we work.
The skills shift
The increased daily use of technology generally, and automation and AI specifically, mean that the skills we need for work are changing. Often, analysts who study workforce and labour trends tend to think of and group the skills we need as follows:
Technological skills: These skills are basic digital skills, advanced skills related to information technology and programming, advanced data analysis and mathematical skills, technology design, engineering, and maintenance, and scientific research and development.
Social and emotional skills: These comprise advanced communication and negotiation skills, interpersonal and leadership skills, empathy, entrepreneurship and initiative-taking, adaptability, and the ability to continuously learn, teach, and train others.
Higher cognitive skills: This includes advanced cognitive skills such as advanced literacy and writing, quantitative and statistical skills, critical thinking and decision making, project management, complex information processing and interpretation, and creativity.
Basic cognitive skills: Skills in this category are basic literacy, numeracy, communication, data input, and processing. While these will continue to be needed, they will be needed less in the future.
Physical and manual skills: These refer to general equipment operation and navigation, equipment repair and mechanical skills, craft and technician skills, fine and gross motor skills and strength, and inspecting and monitoring skills.
Predictions for what skills will be needed in 2030 illustrate the shift that is occurring. Research finds that “social and emotional skills will grow rapidly, along with technological skills and some advanced cognitive skills, while basic cognitive and manual skills will decline.” The largest shift is expected to occur in technological skills – where the need for digital skills and programming will increase considerably. This change will mean that we’ll see an increased importance on positions that use these digital skills each day.
Change in working hours by 2030
Social and emotional skills
Higher cognitive skills
Basic cognitive skills
Physical and manual skills
Source: Chamber calculations from McKinsey Global Institute, 2018, “Skill Shift and Automation and the Future of the Workforce,” 7.
Note: Difference based on hours worked in 2016 compared to McKinsey Global Institute’s predictive model for hours worked in 2030.
The impact on Canadians
Beyond the need for different skills, Canadian workers will be impacted and could face disruption. Using survey data and modelling estimates, research shows that 10.6 per cent of Canadian workers face a high likelihood (70 per cent or greater) that their jobs will be disrupted as a result of automation and AI. Another 29.1 per cent face only moderate risk (50 to 70 per cent probability) of disruption.
Those most vulnerable to traditional labour market changes are also similarly at higher risk of job disruption due to automation and AI. These individuals are, on average, older (aged 55 and over), have no post-secondary education, work part-time, score low on literacy or numeracy proficiency, and those earning a low income. There is no increased risk of disruption, based on survey data and modelling estimates, due to gender, immigration status, union membership, or physical or mental ability.
Disruption will also vary depending on the type of work. Using the same risk analysis above, research finds that 26.6 per cent of manufacturing workers face a high risk of job automation. That is the highest proportion of workers facing the risk of automation in Canada, with the next highest proportion in accommodation and food services – 15.4 per cent of workers in those industries face the same risk of job automation. Conversely, the data show several sectors that face little risk of disruption due to automation. The information and cultural industries (2.8 per cent); public administration (3.7 per cent), educational services (4.2 per cent); and finance, insurance, real estate and rental sectors (4.8 per cent) all have a low probability of their workers facing likely job changes due to automation.
How organizations are changing
Despite that some jobs may be disrupted, these disruptions might not actually impact the size of our workforce. A survey of American and European executives from March of 2018 by the McKinsey Global Institute shows that approximately 77 per cent of respondents report expecting no net change in the size of their workforces due to adopting automation and AI technologies. Rather, 17 per cent expect their workforces to grow, and only 6 per cent expect to see a decline. This outlook makes sense, as during technological changes, researchers have found that employment rates have remained steady, even after controlling for economic boom and bust cycles.
While the size of the workforce might not change, the structure of organizations and companies will. This is common with the adoption of new technology and has been well documented by economists over the last several decades. Executives expect to shift organizations through:
Enhanced continuous learning options and a culture shift that focusses on lifelong learning.
Across organizations, a new focus on cross-functional and team-based work. This may include less hierarchy, and new, shared work amongst teams.
Work activities and responsibilities will increasingly be distributed according to individuals’ specific education and qualifications.
More work will be contracted to freelancers and other contractors, expanding the gig economy.
Setting our workforce up for success
The potential impacts to workers due to the changes that organizations are making, as well as changing skillsets in the labour force will require new solutions and public policy responses.
For those who may experience job disruption, acquiring the right skills to remain competitive will be critical. Work integrated learning and micro-credentialing programs are two pathways for workers to develop these skills. Whether learning while on the job, such as in a work integrated learning program, or in a more piecemeal and bite-sized way, as micro-credentials offer, either option allows individuals to develop their qualifications while remaining in the workforce or allowing advancement with much less time away from work. These programs would also ensure employers can quickly upskill staff to react to quickly changing work trends.
In addition to education, the Government of Canada has facilitated expert discussions to consider what policies might meet these challenges, what opportunities we can seize as work changes, and how these policies can better foster social inclusion.
Experts point to several ways that policymakers can support Canada’s transition to the future of work, including:
Public policy that promotes private investment in human capital such as procurement strategies that prioritize investment in people, or government funding for businesses that encourages positive human resource practices;
A public education and awareness campaign that focusses on continuous learning;
Reforming Employment Insurance to encourage continuous learning rather than only providing income replacement;
National leadership and standards for career development training and services;
Encouraging provinces to focus on curricula standard where skill development becomes the goal and courses are the way to achieve that goal.
These are the conversations and bold thinking we need to do for two important reasons. First, people are the backbone of our economy, and in order for our economy to continue growing, our people must be set up for success, including through having access to the resources they need to be prepared for the economy of the future. Second, Canada needs to compete on the global stage, and in order to compete, we must have a labour force that allows us to excel as our global economy evolves. Lastly, at the Chamber, we believe that vibrant communities lead to vibrant businesses. For us, this means social issues cannot be separated from business and economic issues, and that we must consider the social and economic implications of policies that affect our movement to the future of work.
The COVID-19 pandemic has dramatically accelerated trends related to the future of work. We must seize this opportunity to similarly accelerate our response to ensure we all have the skills needed for the sustainable and quality jobs of the future. The success of our businesses, the well-being of our families, and our economic strength as we manage and emerge from the COVID-19 pandemic all depend on it.