The Great Workplace Migration: McKinsey Report Shows 25% Of Workers May Need To Switch Jobs Post-Pandemic
The coronavirus pandemic has accelerated workplace changes, such as the acceptance of remote work, but a more fundamental shift may be occurring that will displace low-wage workers in record numbers, according to a new report by McKinsey & Co.
"Because of the pandemic’s impact on low-wage jobs, we now estimate that almost all growth in labor demand will occur in high-wage jobs," the report says. "Going forward, more than half of displaced low-wage workers may need to shift to occupations in higher wage brackets and requiring different skills to remain employed."
That is, as many as 25% of workers in the world's advanced economies, including the U.S., will need to find different occupations by 2030 — ones requiring more advanced skills. That will put immense pressure on governments, corporations and other organizations to provide the training necessary to make such a transition.
The shift toward remote work will also have long-lasting impacts on some segments of commercial real estate, McKinsey predicts. In a previous survey of 278 executives, the company found that 30% of them were planning to reduce office space usage, a trend that would have a ripple effect on retail and restaurants near concentrations of office buildings.
Remote work as a more permanent fixture of the economy would depress demand for business travel, affecting not only airlines but also the hospitality industry, both of which have been hit hard by the pandemic.
"While leisure travel and tourism are likely to rebound after the crisis, McKinsey’s travel practice estimates that about 20 percent of business travel, the most lucrative segment for airlines, may not return," the report says. "This would have significant knock-on effects on employment in commercial aerospace, airports, hospitality, and food service."
The report also points toward changes in the geography of work. Accessing the concentration of talent found in certain "superstar cities" might not be the necessary consideration for employers it once was.
"Remote work also offers companies the opportunity to enrich their diversity by tapping workers who, for family and other reasons, were unable to relocate to the superstar cities where talent, capital and opportunities concentrated before the pandemic," McKinsey wrote.
In advanced economies, about 20% to 25% of the workforce can work from home between three and five days a week, the report says, which represents four to five times more remote work than before the pandemic. Many individuals and companies will likely take advantage of their newfound flexibility to relocate.
The move to secondary cities already seems to be underway, according to a separate report by Gensler. The Gensler Research Institute’s City Pulse Survey, which queried residents of four global cities — New York, San Francisco, London and Singapore — supports the notion, claiming people are itching to get out of those places, considering their high cost of living and the fact that they don't need to be there to do high-skill, high-wage jobs.
Two-thirds of respondents to the Gensler survey said they want to leave their global city for lower-cost places that nevertheless offer a high quality of life.