How 40 million jobs were saved in the pandemic
Had the pandemic struck in 2005, all those white-collar workers who rapidly transitioned in the early spring of 2020 from working in offices to working from home would have been let go, furloughed, or fired.
What changed? This is a story about people, not just technology and infrastructure. It’s about executives, white collar employees, and other people.
Executives: faced with an existential crisis of the form “your money or your life”, they were able to rapidly decide to let the people work from home instead of shutting down the business.
Employees figured out how to make their 2020 cornucopia of rich personal technologies work well enough to carry on without the more-typical, ponderous corporate deliberation, planning, piloting, training, and qualification processes that executives would have ordinarily demanded.
There’s more to this story, including poverty, death, and desperation.
Three sections follow: analysis, context, and predictions
The COVID-19 recession has been far shallower than it might otherwise have been because white-collar workers were not laid off anywhere near the frequency of lower-income workers. That has likely saved us from a far deeper economic collapse. If the pandemic had hit in 2005, white-collar workers would have been laid off in far larger numbers – tens of millions of them. Instead, in 2020, white-collar workers’ jobs, particularly the professional/managerial class, were protected as never before.
22.2 million people lost their jobs in the U.S. in March and April 2020, after large swaths of the economy shut down, curbing the spread of Covid-19. That number could easily have been 60 million or more. In 2005, there was nothing available to enable a massive, wholesale shift in the ways of working to “Work-from-home” WFH – or as one wag I know likes to refer to as ‘Bring-Your-Own Office’ or BYOO.
1. Personal communications infrastructure and usage
Communications infrastructure matters. In February 2019, 73% of households had home broadband access, while only 29% did in February 2005. By early 2019, 81% of U.S. adults went online every day, while 29% of Pew’s survey sample said they were online almost constantly.
2. Personal empowerment is now possible (technology commoditization and proliferation)
In 2005, consumers had far less technology in their non-work lives. In their work environment, almost everything they used was provided by their employer. Across the board – at work and home – technology was bereft of the features, usability, familiarity, and variety we now take for granted in the consumer world.
Many white-collar, professional/managerial workers are empowered today to choose aspects of their own work environment. This is the “bring their own” (BYO) phenomenon and includes devices, software, teleconferencing, and offices. That’s BYOD, BYOS, BYOT, and BYOO.
BYO was unheard of and unthought of in most business environments in 2005. (Even today, some technologies are under absolute control by distant wizards and centralized executives who determine much of the kit in use by their employees.)
3. Executives picked right: Total operational chaos versus total economic collapse
They made the right decision, a decision they didn’t anticipate, didn’t want to make, and avoided for years. They had a gun at their heads, in the form of a pandemic-inducing virus. They could either shut down their business or try to make it work with people not in the office.
Nothing short of this type of Hobson’s choice would have compelled such massive changes in the nature of work.
Organizations will challenge and change existing decisions only when there is a compelling reason to make a change. If every assumption and decision were constantly challenged, the organization would thrash itself to a quick death.
Making WFH effective for large numbers of people would require, in normal times, five to ten years of planning, experimentation, piloting, designing, testing, documenting, and implementing changes in technology, procedures, processes, and ways of working.
Most North American organizations that did it took weeks, not years. They had no choice.
Post-pandemic, executives will be more willing to make more changes in less time than ever before, but they will have mostly reverted to the much slower, more deliberate, pre-pandemic rate of change within five years.
We should not forget that the pandemic’s consequences – death, disease, displacement, loss of loved ones, food-insecurity, and other economic privations – are both personal and widespread tragedies.
It could have been far worse if neither enterprises nor many of their employees could shift, almost overnight, to a new work style, WFH.
In this pandemic, the people who have been hurt the most are usually those who can afford it least. Add them together:
- The poor and the people huddled in shelters and suffering from personal food shortages.
- Individuals in minimum-wage (or below minimum-wage) jobs.
- Families crammed six to a room.
- Seniors in assisted living or nursing facilities packed in with others with only a few square feet per person.
- The business people who invested every cent and dollar of credit opening their nail salon, barbershop, small restaurant or diner, neighborhood gym, gin-mill, or movie theatre.
- The small businesses – that politicians and economists say are the economy’s lifeblood – most often lack the capital to sustain themselves without positive cash flow for three months.
At the start of the pandemic, the majority of U.S. workers earned less than 10 percent of aggregate income. They get laid off first. And they have the fewest assets to fall back on when they lose their jobs – the poorest 40 percent of households own two-tenths of one percent of total wealth. Meanwhile, small business owners are forced to shut down and then go bankrupt. These bankruptcies occur for many reasons. They’re not only due to lockdowns. Another factor: Fear on the part of the customers who stay away, prudently protecting themselves from infection risks.
Let’s learn from the successes – the economic blow could have been far more enormous than it seems to be. But let’s also learn from the failures. How can we make our businesses, our governments, our societies more resilient and more able to protect one another from the next pandemic that hits?
Post-pandemic, there will be a push to bring workers back to the office, reducing the number who WFH (work from home) or WFA (work from anywhere.) That will be temporary, part of a pattern of ebb and flow.
In 2025, more of us will WFH than did in 2Q2020, not less. But the world can’t move to WFH/WFA for everyone.
The BYO (bring your own) personal empowerment enlightenment will be less than complete for decades. The enterprise will not be a fully BYOE (bring your own everything) environment anytime soon.
Post-pandemic, executives will be more willing to make more worker and workplace changes in less time than before but that propensity to act will noticeably diminish by 2025.
- The speed with which the move to WFH happened was unprecedented.
- The Q2 2020 decision to let white-collar employees and contractors work from home was made in response to an existential crisis: “your money or your life” or “let your employees and contractors work at home or shut down.”
- Executives generally leave decisions standing unless there are strong reasons to change. They will be slower and more deliberate in the future on WFH-type issues because most of the time, it won’t be a Hobson’s choice, a choice between “your money or your life.”
Bring-Your-Own – BYO both in the office and at home – and WFH will accelerate trends already in play in areas such as security models, reliance on cloud-based services, and shifting more work costs to employees and off of employers’ books.
- Security Models: enterprises will spend more to make their business applications more fully responsible for their own security.
- Cloud-based services: the move to these will accelerate, given an extra boost by previously-unanticipated WFH demand and enterprises’ desire for greater resilience.
- Employee expenses: as technology gets commoditized, employers have been backing away from covering the cost of employees’ personal technology investments, even when they’re to the employer’s benefit. This trend will accelerate post-pandemic.