MainStreet Macro: The pandemic’s labor legacy

This week, all eyes will be on new labor market data.  On Tuesday, the Bureau of Labor Statistics shares its latest on the great resignation and job openings. On Wednesday, the ADP Research Institute offers the first read on April employment numbers, and official government jobs data is due Friday.

Hirings, job openings and quits provide a snapshot of the labor market. But like other snapshots of life, like holiday photos, vacations or the kids’ sporting events, they don’t tell the whole story.  The pandemic has affected more than just monthly hiring – the changes we’re living through now are likely to persist well into the future.

Here are three enduring changes wrought by the pandemic.

The digital economy has expanded its reach

The rapid shift to digital platforms changed the way we did our jobs, bought our groceries and even, for a period of time, taught our children.

These digital platforms are likely to become not just permanent fixtures in the workplace, but also rapidly expanding ones. Labor-saving technologies will be one of the outcomes. The pandemic pulled forward adoption of automation as companies tried to find quality substitutes for a shrunken workforce. 

Not all technologies will be geared toward replacing people. They also hold the promise of augmenting rather than simply automating our jobs. Technology can help workers become more productive – and thus better compensated – and companies become more profitable.

Recently, ADP announced a research partnership with the Stanford Digital Economy Lab to study how technologies like artificial intelligence, machine learning and digitization are changing the world of work.

While this research is just kicking off, we think that workers seeking to future-proof their careers will need to add new digital skills to their profiles.

Mental health has become a front-burner issue

Workers have been putting in overtime during the pandemic.  Not only did average hours worked increase, for the second straight year, employees reported working an average of eight hours a week without pay, our new People at Work study found.

Maybe that’s one reason they also are reporting high levels of stress. A staggering 3 in 4 workers said they were stressed at least once a week. One-quarter of U.S. workers told us they were stressed every day. About half said that stress has negatively affected their performance at work.

Companies are taking notice, and mental wellness has become a cornerstone issue. Employees tell us that their companies are offering special stress counseling and creative innovations such as mental health days, stress management breaks, Zen rooms, wellbeing activities and – my favorite – meditation classes. Namaste, ya’ll.

Flexibility is the new job security

While salary and a steady paycheck are important to employees, only 20 percent of U.S. workers said their jobs were secure.

However, gone are the days when job security was everything.  Workers these days want to maximize their newfound and hard-won professional flexibility. They want more autonomy over when, where, and how they work.

To drive this point home, 44 percent of workers said they would take a pay cut if it meant they could choose their own hours. U.S. workers were willing to reduce their salaries by 11 percent on average if it meant they’d achieve better balance between home and work.

My Take

The world of work has evolved over the last two years, and the changes won’t be short-lived. These shifts will be with us for some time to come.