One year of COVID, Europe and the challenge of employment

One year ago, the wraith of the unexpected crossed Europe, bringing a wave of uncertainty and unprecedented measures applied in all countries to protect the population from a completely unknown enemy. It sounds like a film plot, but in fact is the origin of a crisis that has generated the biggest impact on our economy in the last 100 years.

Covid-19 started as a health crisis and soon became an economic and social emergency. More than 117 million confirmed cases and 2.6 million deaths are the initial statistics of one year of pandemic, but to that we must add the 2 million jobs lost in Europe in the last 12 months as a result of the crisis and the thousands of companies going in bankruptcy.  

The world has changed, but the way people, companies and administrations face challenges remain the same. We need to transform our systems, our society.

At home, we have taken a step backwards: women, who account for 39% of the global workforce, have suffered the most as they represent 54% of the job losses during the pandemic. In Europe, this trend is even worse as women make up 47% of the workforce, but being particularly active in services such as office support, food service or desk work, they account for up to 60% of the jobs destroyed.

The way we do business must evolve. Today the supply-chain shortage we suffered months ago has largely been resolved with alternative plans activated in most companies. The evolution of demand, which has become more digital, has accelerated digitisation strategies in all kind of businesses. This need for transformation has brought forth a good list of winners in the situation, but the downside is huge: the tourism, leisure and travel industries have collapsed dramatically, something especially painful for the European economy, which is totally focused on services.

Looking at employers’ intentions for Q2 (ManpowerGroup quarterly survey) only 5 of 26 countries analysed in Europe expect job positions to be destroyed and 18 countries have better perspectives than in the first quarter, but the sector mix has changed from previous years, when Q2 traditionally brought a notable increase in employment in the tourist industries. Finance and manufacturing now top intended contracting, whilst services, including restaurants and hotels, continue to shrink. Only a change in EU vaccination plans allowing a summer season to be enjoyed could turn these expectations around.

Our politicians have to think differently. Job destruction is now the trend in Europe, especially among the young, who have been hit by two crises in a very short time. This has turned the interest of politicians and institutions into employment policies; an artificial support for employment rates via direct funding in an attempt to mitigate the harmful effect on society.

The short-sightedness of the administrations makes them focus in the short term on a single figure, unemployment, and they forget a key element, which is that when this situation ends, everything will be different from 2019, and artificially maintained jobs will be as volatile as they are today. In a world in which the productive models are rapidly changing and transforming, unemployment rates are just a way to measure a temporary mismatch between offer and demand; employability is the true indicator of a potentially healthy society. Working on giving the workers expelled from the workplace the right skills is the only sustainable way to provide a long-term solution to the current crisis. Because whilst governments are funding unnecessary jobs (in a Keynesian model), and not simultaneously promoting an upskilling/reskilling policy, their efforts will be to no avail when the money runs out.

Administrations, companies and institutions must focus today on understanding the future market, on reading the needs of the future economy to have a clear view of the huge need for the skills required to achieve our goals as a society and to make the changes we want, and to work on promoting these skills and building the talent that will shape the plans we have today. It is impossible to think about a Green Economy (electric cars, smart cities, zero waste societies, etc.) without the right people to make it happen, because people are key to achieving our transformation as a society. This means a completely new mindset for our politicians and institutions, moving away from old ways to measure the market and taking on a new understanding of reality: employability is the metric, because investing in it today will pave a solid road to the future.