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McKinsey: Post-pandemic workplace will see major changes

In the post-pandemic workplace, businesses are likely to focus more on skills than job titles while also accelerating their adoption of automation and digital technologies.

The post-pandemic workplace will be very different from the one employees know today, according to a new study by the McKinsey Global Institute.

Many jobs will disappear, and millions of employees will need to be retrained. Plus, the concept of job titles will be rethought, focusing on employee skills and capabilities rather than academic degrees. 

Although growth in leisure travel will resume, business travel in the post-pandemic workplace may decline by as much as 20%, if not more, according to Susan Lund, a partner at McKinsey & Co., and an author of the report, "The future of work after COVID-19."

"I think that one of the things we've all learned is that virtual meetings actually can be done and can be quite effective," Lund said. McKinsey expects new technologies will make virtual meetings more seamless.

The most significant decline in business travel may be for internal meetings, Lund said. "There were lots of times I've heard executives say, 'I'll never again get on an airplane just for a one-hour meeting with someone,'" she said.

But she expects conference schedules and meetings with clients to resume.

It's "clear that businesses will not sort of go back to business as usual," said Anu Madgavkar, a McKinsey Global Institute partner, who also worked on the study. Businesses will look to create distributed hybrid remote work models, she said.

Before the pandemic, the largest cities in the U.S. and Europe accounted for a "disproportionate share of job growth," according to the study. In contrast, smaller cities and rural areas fell behind.

It's clear that businesses will not sort of go back to business as usual.
Anu MadgavkarPartner, McKinsey Global Institute

But in 2020, office vacancy rates increased significantly in major cities, and some firms are discussing opening satellite offices in smaller cities to attract growth there, the study stated. The study includes an analysis of LinkedIn data that revealed a larger number of site members moved from bigger to smaller cities in 2020 than in 2019.

Indicators of change

Residential rents are declining in large cities as people move away from the urban centers to places such as Madison, Wis., Jacksonville, Fla., and Salt Lake City, which saw the most significant growth during the pandemic, the report noted.

"COVID was a giant nudge and shifted both consumers and businesses to operate in new ways," Lund said.

McKinsey estimated that the number of remote workers in the post-pandemic workplace will be four times higher than before the pandemic. The remote model will represent as much as 25% of the workforce.

COVID-19 is also accelerating the adoption of AI and automation, e-commerce and virtual transactions across industries.

The post-pandemic workplace impacts will have an effect on jobs. Healthcare, occupations in STEM fields and transportation jobs will see growth after the pandemic. Retail and hospitality, food services and office support roles, as well as other occupations, will experience the largest declines.

"Vulnerable demographic groups, which were disadvantaged to begin with, are likely to bear the brunt of these occupational transitions," Madgavkar said. Because many work in customer service roles, women, in particular, will be significantly impacted, she said. 

Madgavkar says millions of displaced workers will need to get additional training to move new types of jobs.

Businesses may also rethink job titles and the need for formal degrees. Instead, they will "focus on specific skills that actually make workers effective in these new kinds of tasks," Madgavkar said. 

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