Post-pandemic 'new normal': what is it, when will it be here, and what it means for tech jobs

Eventually we'll be safe again and able to predict our futures with more clarity. So what should we expect and how will tech jobs be affected?

A home workspace displays a sign marking the new normal.
HAKINMHAN / Getty Images

In the middle of the crises of coronavirus and the economic upheaval it has wrought, two things everybody wants to know are when it will be over and exactly what things will look like at that time. As long-time forecasters and analysts of tech labor markets and the supply and demand for tech talent and skills, our firm has been aggressively seeking the answers.

 

How long will the COVID-19 pandemic last? 

This is, of course, a key question for forecasting the state of the economy and in turn the future of tech employment. Foote Partners has looked at several variables and spoken with experts in the fields of immunology, epidemiology, healthcare, social sciences, and economics in addition to the usual insights collected from our research partner network of 3,700 U.S. and Canadian employers in 38 industries. We not only base our predictions on past economic upheavals and how the tech job market reacted, but also on what may constitute a new normal given the likelihood that society will be learning to live with virulent strains of the flu for years to come.

Of particular concern to us is the latest data on the public's acceptance of vaccines. Prior to this pandemic the percent of Americans who routinely opposed vaccinations of any kind had been reported to be in the 16% to 20% range. But this has now changed: a recent survey of 10,093 U.S. adults conducted September 8-13, 2020 by the Pew Research Center found that about half of adults (49%) say they would "definitely not"  or "probably not" get a vaccine to prevent COVID-19 if it were available today. This is up from 27% in a similar survey conducted by Pew from April 29 to May 5, 2020.

Assuming the vaccines developed by Pfizer and Moderna are given emergency approval by the FDA, how efficiently these vaccines can be distributed globally is a key factor we included in our forecast. In September, CDC Director Robert Redfield testified before Congress that most of the American public will not have access to a vaccine against the novel coronavirus until late spring or summer of 2021. Another key factor is the impact of mutations of SARS-CoV-2 which at this time is inconclusive.

On the economic front, macroeconomists cited historical evidence plus the current state of indicators such as the current-account deficit, the so-called net national savings rate, and recent economic output trends in suggesting to us the specter of a US dollar collapse against other currencies as early as the end of 2021. The odds of a "double-dip" recession in the US---defined as a recession followed by a brief recovery and then another recession---is as high as 50% is the estimation of the macroeconomists we spoke with. These odds may have increased with the sharp spike in COVID-19 cases now occurring, coincident with congressional leaders appearing increasingly unlikely to strike a deal of another relief package as another round of key unemployment benefits is set to expire in the next month.

In the middle of the crises of coronavirus and the economic upheaval it has wrought, two things everybody wants to know are when it will be over and exactly what things will look like at that time. As long-time forecasters and analysts of tech labor markets and the supply and demand for tech talent and skills, our firm has been aggressively seeking the answers.

How long will the COVID-19 pandemic last? 

This is, of course, a key question for forecasting the state of the economy and in turn the future of tech employment. Foote Partners has looked at several variables and spoken with experts in the fields of immunology, epidemiology, healthcare, social sciences, and economics in addition to the usual insights collected from our research partner network of 3,700 U.S. and Canadian employers in 38 industries. We not only base our predictions on past economic upheavals and how the tech job market reacted, but also on what may constitute a new normal given the likelihood that society will be learning to live with virulent strains of the flu for years to come.

Of particular concern to us is the latest data on the public's acceptance of vaccines. Prior to this pandemic the percent of Americans who routinely opposed vaccinations of any kind had been reported to be in the 16% to 20% range. But this has now changed: a recent survey of 10,093 U.S. adults conducted September 8-13, 2020 by the Pew Research Center found that about half of adults (49%) say they would "definitely not"  or "probably not" get a vaccine to prevent COVID-19 if it were available today. This is up from 27% in a similar survey conducted by Pew from April 29 to May 5, 2020.

Assuming the vaccines developed by Pfizer and Moderna are given emergency approval by the FDA, how efficiently these vaccines can be distributed globally is a key factor we included in our forecast. In September, CDC Director Robert Redfield testified before Congress that most of the American public will not have access to a vaccine against the novel coronavirus until late spring or summer of 2021. Another key factor is the impact of mutations of SARS-CoV-2 which at this time is inconclusive.

On the economic front, macroeconomists cited historical evidence plus the current state of indicators such as the current-account deficit, the so-called net national savings rate, and recent economic output trends in suggesting to us the specter of a US dollar collapse against other currencies as early as the end of 2021. The odds of a "double-dip" recession in the US---defined as a recession followed by a brief recovery and then another recession---is as high as 50% is the estimation of the macroeconomists we spoke with. These odds may have increased with the sharp spike in COVID-19 cases now occurring, coincident with congressional leaders appearing increasingly unlikely to strike a deal of another relief package as another round of key unemployment benefits is set to expire in the next month.

Considering all data and insights we have collected and analyzed, our forecast is that we will likely not see anything resembling a sense of 'normalcy' in the US until the fourth quarter of 2022. Exactly what the definition of normalcy will be is uncertain. What will be less ambiguous, we believe, is that it will not be until late 2022 that (1) many Americans feel a general sense of relief that controls have been put in place to ensure their safety and (2) their futures have become more predictable. That is the simple foundation of a 'new normal'.

 

Understand the new labor landscape

According to an October report entitled The Future of Jobs 2020 published by the World Economic Forum (WEF), advances in robotics and artificial intelligence will lead to a net increase in jobs over the next five years but the coronavirus pandemic will result in "double-disruption" scenario for workers. That is, in addition to the current employment disruption from the pandemic-induced lockdowns and economic contraction, technological adoption by companies will transform tasks, jobs and skills by 2025.

Forty-three percent of businesses surveyed indicate that they are set to reduce their workforce due to technology integration, 41% plan to expand their use of contractors for task-specialized work, and 34% plan to expand their workforce due to technology integration.

In a stunning prediction, the WEF believes that by 2025 the time spent on current tasks at work by humans and machines will be equal. Moreover, the report predicts that in the next five years a significant share of companies also expect to make changes to locations, their value chains, and the size of their workforce due to factors beyond technology.

The WEF believes that the rise of machines and automation will eliminate a huge 85 million jobs by 2025 while at the same time creating 97 million new jobs, meaning an overall addition of 12 million jobs globally. This will require employers to achieve a significant level of reskilling and upskilling to ensure staff are sufficiently equipped for the future of work. According to the WEF, half of all employees will need some level of retraining in the next five years, a very short window that will require an intensive effort from business, government and the workers themselves. In this study 94% of business leaders report that they expect employees to pick up new skills on the job, a sharp uptake from 65% in 2018.

The WEF report also highlights the rapid shift to remote work that came about in the spring as the health crisis led companies to close their offices. It predicts employers will move as much as 44% of their workforce to operate remotely but more than three-quarters of business leaders surveyed expect current ways of working to negatively impact productivity as some industries struggle to adapt. To address concerns about productivity and well-being, about one-third of all employers according to the WEF expect to also take steps to create a sense of community, connection and belonging among employees through digital tools, and to tackle the well-being challenges posed by the shift to remote work.

The WEF identifies twenty job roles increasing in demand including these fourteen tech and tech-business hybrid roles in rank order of demand:

·         Data analysts and scientists

·         AI and machine learning specialists

·         Big data specialists

·         Digital marketing and strategy specialists

·         Process automation specialists

·         Business development professionals

·         Digital transformation specialists

·         Information security analysts

·         Software and applications developers

·         Internet of things specialists

·         Project Managers

·         Database and Network Professionals

·         Robotics Engineers

·         FinTech Engineers

Lost tech jobs are slowly rebounding

2020 began with a bang for IT professionals with 31,300 tech jobs added to US payrolls in the first three months according to the US Bureau of Labor Statistics (BLS). But soon the bottom dropped out, with the BLS reporting a stunning loss of 210,000 tech jobs from April to July. But August, September, and October saw a turnaround with a net 50,900 tech jobs added back to US payrolls and more expected in the final two months of 2020. Two important tech categories defining the all-important IT professional services industries are leading the recovery: Management & Technical Consulting Services has added 44,100 net jobs since May and Computer Systems Design & Related Services has gained 40,300 new jobs just from August to October.

That said, with a total estimated US workforce of 12.2 million tech jobs, it can be argued that there has barely been a dent in the national technology workforce as a result of the pandemic and economic upheaval. What there has been is a larger workforce disruption that has had very real consequences for employers. Sure, tech job openings have increased recently but tech's recovery is progressing in "fits and starts", a humbling reminder of COVID-19's bruising impact as parts of the country grapple with resurgent outbreaks.

Initially, tech was holding up better than other sectors due to the quick adaptation to remote work. But nationally, as the long-term effects of the pandemic have started to sink in, tech job growth has hit some monthly flatlines. That's the key change—the economic expectations around the virus went from short-term thinking to "we'll be in this for the long haul".

 

A word about the future of remote working

We all know that work will never be the same because of the pandemic, even if we don't yet know all the ways in which it will be different. What can be said with certainty is that the sudden shift to distributed work has provided a once-in-a-generation opportunity to reimagine everything about how we do our jobs and how we run our companies. If we can move past decades of 9-to-5 office-centric orthodoxy about work, there's an opportunity to retain the best parts of office culture while freeing ourselves from bad habits and inefficient processes, from ineffective meetings to unnecessary bureaucracy.

Companies are gaming out how to bring employees back to the office but many are expecting a new normal in which a significant portion of their workers stay home for good. Some may find they are just as productive with a remote workforce but a shift away from in-office work will have profound impacts on everything from the commercial real estate market to the vast number of jobs that have been built in and around urban areas.

Some tech companies like Twitter have told workers that they can work from home permanently if they want. Others haven't gone that far: they have acknowledged publicly or privately that they don't expect most workers to return to the office this year. From the employee perspective, the shift is massive and very consequential, with workers making new choices about where they want to live and creating new expectations about flexibility, working conditions and life balance that arguably can't be undone. One recent survey of 4,700 knowledge workers found the majority never want to go back to the old way of working. Only 12% in this survey want to return to full-time office work, while 72% want a hybrid remote-office model moving forward.

Recently the CEOs of Box, Okta, PagerDuty and Twilio all expressed a sense that they will end up with more remote workers permanently even after the pandemic ends, and admit that prior to the pandemic they were already trying to reduce dependency on a workforce residing principally in high cost of living areas.

Many employers have had to quickly switch gears, searching for and finding benefits in having a larger remote workforce. Remote meetings have been an acceptable and a more efficient substitute for talking in person, especially for teams in other countries. The truth is that embracing remote work has a number of benefits for companies beyond just the costs of hiring and retaining workers. For example, many companies have built up a massive army of contractors and vendors to support their employees, including not just knowledge workers but also food service, shuttle bus drivers and janitorial staff. Even a partial shift away from the office can likely add up to significant savings over time for these companies.

Meanwhile, for workers, the ability to work remotely means more than just cutting down a commute. It also means the ability to live wherever they want rather than being tied to expensive urban areas such as the San Francisco Bay Area, Austin, New York and Boston.

Considering the high cost of real estate and other expenses in these cities are areas, this could lead to a significant exodus and so far indications are that many workers are taking advantage of these policies---and often taking reductions in salary as their employers seek to equalize pay for these relocations from high-cost to lower-cost locations. 

For those who can work from home (approximately 40% of US workers largely from the higher educated quartile), their daily experience of work has and will change significantly.

Commuters may gain an hour back on average in their day and estimates suggest that post pandemic, some portion of the week will involve working from home – from one to three days a week. The hybrid model referenced above is likely to emerge to try to balance the efficiencies gained by remote work with the benefits of social interactions and to creativity and innovation generated by working in person with others. This model will most benefit corporate cultures that prioritize trust and belonging, where interpersonal bonds are formed with intent and care.

But the greatest challenge that we face regarding work is what happens to the other 60% of workers who can't work from home. The decline in daily commuters as well as business travel has a knock-on effect on those whose jobs support and serve these workers and offices. A full one-in-four of US workers are in the transportation, food service, cleaning and maintenance, retail and personal care industries. These jobs, often concentrated in cities and lower paid, are disappearing or are at risk of disappearing in the near term. The federal and state governments will need to shore up the social safety net and invest in ways to further skills and increase access to education and training for our most vulnerable workers.

Still, not all employers are on board with enlarging their permanent remote workforce. Some companies have invested significantly in their campuses and have a vested interest in maintaining an office culture. A prime example is Apple, which spent a fortune on its Apple Park HQ and likes its products designed behind closed (and locked) doors.

The big picture is employers' stances will range from "stay home forever if you want" to "can't wait for you to come back in." Among tech sector companies, software companies are likely to have an easier time than hardware producers relying on a largely distributed workforce. Not all the changes we are seeing as a response to the coronavirus will be permanent. Some jobs that are being done remotely at the moment, including many roles in sales and support, will require more travel once shelter-in-place rules ease.