Fighting fear and uncertainty in the economic recovery

The coronavirus pandemic represents the largest disruption of BC’s labour market in our history. Uncertainty and fear among many businesses, workers, customers and the general public about the continuing pandemic affects how we grasp the new normal and move beyond the crisis. Human resources expert Kerry Jothen weighs in.

post-image.jpgBritish Columbians will only resume their lives, businesses and work when they feel safe and see riskless pathways back to commerce and work. This will be tested by new outbreaks and waves of COVID-19.

The coronavirus pandemic represents the largest disruption of BC’s labour market in our history. Uncertainty and fear among many businesses, workers, customers and the general public about the continuing pandemic affects how we grasp the new normal and move beyond the crisis. British Columbians will only resume their lives, businesses and work when they feel safe and see riskless pathways back to commerce and work. This will be tested by new outbreaks and waves of COVID-19.

Re-opening of businesses in the BC Restart Plan helps employers ensure the health and safety of workers and customers in a gradual, staged approach towards economic recovery. However, this will not happen without strong government leadership and action on the workforce front with industry.

Sector Impacts

According to data collected in mid-April of this year, almost 400,000 (17% of total) British Columbians had lost their jobs, mainly in the service-producing sectors. Today’s Labour Force Survey data showed a 2% improvement in employment in BC or over 43,000 jobs by mid-May. This trend could continue considering Phase 2 of the BC Restart re-opening started after data collection. However, after the three months of the pandemic, the hardest hit sectors are ones starting to re-open now:

  • With a gain of over 12,000 jobs in May, 94,700 jobs were still lost (a 49% drop since February) in Accommodation and Food Services
  • Almost 92,000 jobs have been lost (a 27% reduction) in Other Services including high-touch personal services
  • With re-opening, almost 12,000 in new jobs occurred in May in Retail and Wholesale, however employment is still down almost 64,000 jobs or 16% since February
  • Transport and Warehousing saw further losses in May and its employment is down 22,000 or 16% over 3 months
  • While Construction never stopped, its employment is still down almost 42,000 jobs or 17%

Service employment accounts for 88% of the more than 353,000 jobs lost by mid-May. International travel, mass event and tourism sectors involving huge workforces have been seriously impacted and will take longer to re-open. The BC Labour Market Outlook shows their employment in 2019 totaled over 127,000 in: Amusement, Gambling and Recreation; Transit, Sightseeing, Pipeline Transportation; Motion Picture and Sound Recording; Performing Arts, Spectator Sports; and Air Transportation.

K-12 Education, Colleges, Universities, Public Administration, certain parts of Retail (groceries, alcohol, hardware) and Health Care have maintained most of their employment.

One of BC’s two largest sectors – Manufacturing – has fared relatively well with a modest reduction of 5,000 jobs or 3% of total. Resource sectors like mining, oil and gas and utilities have continued producing with minimal disruption. Major resource projects like LNG Canada, Coastal GasLink and BC Hydro Site C and Trans Mountain Pipeline have had temporary disruptions but are moving along.

Overall, while employment increased since mid-April, the unemployment rate in BC has further increased to 13.5% from 5.2% in February. Sales and Service workers were most impacted with the unemployment rate almost quintupling to more than 22% from 4.5%. Arts, Culture, Recreation and Sport unemployment has done the same to almost 21% from 4.9%. This means more than 1 in 5 workers in these two sectors with over half a million jobs are unemployed. All occupational categories experienced increased unemployment rates except Education/Law/Social/Government, and Natural Resources/Agriculture and Manufacturing and Utilities occupations.

One factor that prevented mitigation of impacts was that workers in sectors and occupations most affected were least able to work remotely. Many of these were in vulnerable lower-wage, lower-skilled Sales and Service, Personal Care, Food Prep and Serving occupations.

Over 350,000 furloughed or permanently laid off workers will not return overnight nor in a few months It will perhaps be several months or a number of years before we get back to “normal” employment levels. While re-opening is expanding and employees are being called back, some workers will not go back out over fear of the virus and/or because they have income support helping them to wait out the pandemic. Gregory Daco, Chief Economist at Oxford Economics forecasts that “about half of workers laid off or furloughed in March and April, or at least 110 million people, won’t be returning to their old jobs.”

This dislocation of labour is co-existing with skills and labour shortages. CFIB reports that one-third of its members are having trouble finding staff. Agriculture employers are trying to tap into domestic labour because of a reduced temporary foreign worker pool. The pandemic is creating its own job gains – existing occupations in grocery, e-commerce, tracking and tracing and new jobs related to mitigating virus risks in the workplace such as plexiglass manufacturing, remote learning technology and PPE manufacturing.

This extent of workforce displacement calls for a major, comprehensive long-term government strategy to support workers and employers changing business models and/or bringing back workers.

Impacted and Vulnerable Workforce Groups

BC youths (15-24) unemployment rate has ramped up to almost 29% in BC, with over 92,000 young people losing their jobs since February, not to mention many others having their working hours cut. The International Labour Organization said the “pandemic risks creating a ‘lockdown generation’ of young people forced to play catch-up on the labour market for at least a decade.” It calls for large-scale and targeted policy response to support young workers through training, apprenticeships and guarantees. COVID-19 is eliminating employment, reducing education and training spaces and putting major barriers in the way of those entering the BC labour market.

Based on the BC Labour Market Outlook 2019-2029, about 35,000 people will graduate from public post-secondary education and trades education programs this summer. Where will they go?

In addition to youth, other groups for which pathways back to work must be supported are:

  • The over 300,000 workers that continue to be displaced by this pandemic and the 150,000 British Columbians who left the labour force during this pandemic.
  • Those who were already unemployed and underemployed before the pandemic, particularly those members of equity-seeking groups and other with significant barriers to employment.
  • Workers in low-skilled, low-wage jobs, particularly in high-touch frontline positions – 63.8% of job losses came from these occupations.
  • Women and foreign-born British Columbians were more impacted because of the sectors experiencing the greatest losses from lockdown and market forces.
  • Small businesses in most sectors, including those who closed due to public health requirements and who had no capacity to re-open in the short term.
  • Businesses in rural, remote and Indigenous communities without lifelines to sector associations, re-opening supports and customers.

We cannot forget that supporting the most impacted businesses and workers means not making assumptions about life going back to normal.

covid-worker.jpegWhat Workforce Strategies Are Needed

Never has there been such a dislocation of our workforce and it will not be solved by a simple turning on a switch to recovery.

This effort needs to be immediate, comprehensive and strategic. Initiatives will need to be nimble and adaptable, easy to ramp up and down, include rapid response capacity and build on proven effective practices. Existing programs alone, including stopgap, short-term wage subsidies, grants and income supports will not be enough. Public policies need to reflect and foster capacity-building to build the resilience of BC businesses and workers.

  1. The most important workforce strategies are those that mitigate worker fears – public health and safety measures. The Public Health offices and practitioners and WorkSafeBC are doing a great job in working with industry sectors and individual businesses in helping them re-open and mitigate health and safety risks.
  2. Business, industry and worker groups need to continue working 24-7 in cooperation with each other and WorkSafeBC and government on preparing for the phasing of the BC Restart Plan. This is unprecedented collaborative across traditionally competitive spaces.
  3. Perhaps the most important employment measure might be a reliable COVID-19 testing, tracking/tracing and isolation program for BC. The International Labour Organization suggests that a public health rapid response, adaptation to ‘micro-lockdowns’ that can shut down a business, school, hospital, etc. could be the most important pre-emptive workplace measures on virus outbreaks.
  4. Governments are working on trying to expedite approval of major and minor infrastructure projects. The BC Government needs to influence these to be fast-tracked including streamlined environmental and other regulatory approval steps and reasonable procurement processes including an embargo on requiring extraneous economic and social benefits. Other creative job creation measures are needed:
    • Helping businesses to have an internet presence and move to more e-commerce.
    • Enabling more businesses to move to remote work and learning.
    • Measures to maintain a necessary flow of temporary foreign workers for key industries.
    • Create a federal program to recruit more workers into the Canadian military.
    • Ensure BC has a significant cadre of test, track and trace public health workers throughout the province – not just for the current low infection numbers but in the invent of outbreaks and future pandemic waves.
  5. Employers and governments have to consider the ‘fear factor’ – they cannot assume furloughed or permanently laid off workers will automatically come back during our reopening phases and need to proceed accordingly. Government, industry groups and educators need to work together on a major workforce transition strategy for BC. Re-deployment and reskilling are threatening to some mid-career and older workers and their transition requires careful support.
  6. Wellness supports to address worker trauma and fears will be paramount.
    • Measures to facilitate the learning and employment of post-secondary graduates of 2020, including more robust co-operative education, internships and other work-integrated learning
    • Use of existing and new government training and income support programs including:
      • The existing BC-Canada Job Grant and Training Tax Credit to support reskilling and upskilling;
      • Transition supports and grants to help workers re-employ/re-deploy to new jobs (in their previous or new industries).
      • Income support to facilitate older work bridging to retirement, including flexibility in the federal CERB and CEWS supports.
      • Adapt the Canadian Training Benefit announced in 2019 budget for use with individuals for training for new jobs.
      • Easier worker access to child care and elder care benefits and services.
      • Tailored supports and initiatives for rural, remote and Indigenous businesses and workers.
      • Rural, remote and Indigenous-specific workforce strategies for re-employment/re-deployment.
      • Sector job vulnerability assessments and strategies.
      • Better collection, analysis and application of real-time workforce/labour market data.

Everything must be done to ensure those impacted by the pandemic do not slide into long-term unemployment. Richard Layard at the London School of Economics calls for a national program for displaced workers involving one year of income support during training and a guarantee offer of employment with a private, public or voluntary employer: “There needs to be a huge effort…unlike previous recessions, this one was deliberately created by governments. They have a duty to protect those mostly affected” (Financial Times, May 9).

A recent OECD survey of business groups laid out a framework for workforce action in the pandemic:

  • Reducing taxes on labour
  • Increasing incentives for companies to hire and keep employees at work
  • Increasing labour market flexibility
  • Retraining unemployed
  • Digital transformation, public infrastructure and innovation
  • Less red tape and more cooperation

Canada and BC have a history of launching workforce transition initiatives for specific sectors (e.g. forestry, manufacturing, mining), certain regions (e.g. Newfoundland and Labrador) and in response to global developments (e.g. climate change) and major policy developments (e.g. trade agreements). COVID-19 represents workforce impacts even bigger and broader-scale than any of these. We also should rely on the experience of workers and businesses that experienced major transition in forestry, mining, oil and gas, manufacturing and other major disruptions in the last forty years.

Long-Term Workforce Strategies

COVID-19 has expedited the arrival of the ‘future of work’. In the long-term, the World Economic Forum suggests ways to “resetting” labour markets for recovery:

  1. Doubling down on upskilling and reskilling;
  2. Identifying the jobs of tomorrow including in the “Care Economy”, digital technology and e-commerce;
  3. Prioritizing re-deployment and re-employment;
  4. Revaluing essential work and improve the quality of jobs;
  5. Effecting a collaborative recovery, reset and rebuild.

Recent advice from McKinsey & Company reads like it came right out the BC Government’s and Dr. Bonnie Henry’s playbook: “Communicating clearly to citizens and employees about actions, timelines, and expected outcomes is another critical factor. The more factual and forward looking your messages are, the faster the confidence will return – and the faster economic recovery can begin.”

With BC Government leadership, leveraging Federal support, and a partnership approach with business and industry, we can collectively maximize return to business and employment in BC and reduce fear and uncertainty moving into the new normal and create resilient, nimble enterprise.

Kerry Jothen, B.A., M.A., is the principal of Human Capital Strategies and has over 40 years of experience in human capital roles. HCS is one of the longest-standing independent strategic planning, workforce research and strategy development consultancies in BC. Kerry is a member of the Resource Works Advisory Council.

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