As 2020 kicked off, the U.S. job market was the strongest in 50 years, and the economy had seen a record 113-month streak of job creation. Across industries, demand for talent was booming. Then, nearly overnight, our world—and the job market with it—suddenly and wrenchingly changed.
The COVID-19 virus brought travel to a halt globally, businesses and schools shut down, and workers who were able to do so began working remotely. As a result of this unprecedented worldwide economic pause, a record-shattering 10 million workers filed for unemployment during the last two weeks of March. This is by far the fastest and largest-scale rise in unemployment since record keeping began, and the services jobs that drive the American economy have been the hardest hit.
This morning, the U.S. Bureau of Labor Statistics released its monthly employment summary for March—which offers one of the first deeper glimpses into how the COVID-19 pandemic is transforming the job market. (Crucially however, this data only reflects up to the week of March 12—as the pandemic and its business and school closures were beginning to accelerate in the U.S.) The national unemployment rate jumped to 4.4%, up from 3.5% in February, rising across all groups of workers—with workers with lower levels of educational attainment the most vulnerable to job loss.
As we enter a recession, many experts believe that the unemployment rate will spike well into the double digits—to 15 percent according to Goldman Sachs, or as high as 32 percent according to the Federal Reserve Bank of St. Louis. Whatever the exact figure, we’ve gone quickly from nearly full employment to tens of millions of Americans being out of work in a transformative “100-year flood.” Hopefully, this economic disruption will be as short as possible —but a shift of this magnitude will have both immediate and long-lasting implications for the higher education ecosystem in addition to the world of work itself.
The Future of Work Arrived Early
Forecasting “the future of work” has attracted the attention of countless CEOs, academic leaders, policymakers, consultancies and others in recent years. Yet suddenly, we must revisit our fundamental assumptions about the economy of the future. Most future-of-work studies rightfully concern themselves with the potential impact of automation and artificial intelligence on the job market and society.
It’s important to recognize that this crisis will likely only accelerate the march of automation and the adoption of various labor-replacing technologies, including machine learning and AI. Data from prior recessions shows that this is a clear historical pattern: after layoffs occur, firms are more likely to replace human jobs with technology.
According to past opinion polls we’ve conducted at Northeastern University, American workers recognize that lifelong learning is critical to staying prepared for these ongoing technology-related changes in the job market. Upskilling workers to compete in a more technology-driven job market—and developing human skills to augment or work alongside smart machines—is now even more of an imperative.
Disrupted College Relations
The rapid downturn in the job market is already having a major effect on the seasonal cycle of college recruiting and summer internships. Early reports indicate that many blue-chip companies have begun to freeze or rescind hiring offers to graduating students. In addition, internships are being canceled.
On top of the obvious impacts for new graduates’ job prospects, it’s interesting to consider that as professional work that hasn’t stopped moves online and remote, this could be a catalytic moment for the growing market of online experiential learning opportunities that allow students to gain work experience and work on real-world projects without being physically embedded at an employer site.
To the extent that they have the financial ability to do so, thoughtful employers will continue to invest in work-based learning models as a strategic early talent acquisition channel rather than consider summer internship programs, for example, to be simply a cost center or philanthropic effort.
Cracks in Employer Funding for Education
The dramatic downturn in the economy also poses significant risks to employers’ role as funders and purchasers of education. Consistent with past recessions, many companies are being forced to cut or freeze benefits such as 401(k) contributions. With many businesses trimming expenses and laying off employees, it’s likely that employee education benefits will be at risk as well.
What had been an extremely competitive market for attracting and retaining employees led to an arms race in benefits, where large employers’ high-profile investments in college and university tuition assistance programs captured attention. Historically, the availability of tuition assistance benefits declines in recessions. Thoughtful employers will see ongoing investments in tuition assistance as a strategic investment. Yet, just as this crisis is prompting reevaluation of our country’s social safety nets (e.g., paid time off and healthcare) it is also time to consider vehicles for workers to save for lifelong learning that go beyond being coupled to individual employers.
Likewise, employer spending on training—which often includes university-provided offerings—tends to decline in recessions. The executive education market was already facing heightened competition and digital disruption: these pressures will accelerate in the current environment, with even more interest among employers in shorter-form offerings and online delivery.
Acceleration in Online Learning and ‘Learning in the Flow of Work’
Aside from the obvious fact that the COVID-19 pandemic has suddenly moved most campus-based learning online, a world defined by more telework and stay-at-home orders is leading to a surge in demand for online courses and interest in online degrees, just as it is driving peak demand for streaming video services and online grocery shopping. MOOC catalog site Class Central has reported a 900 percent spike in traffic, and course enrollment has surged at Coursera. Higher education enrollment has traditionally been counter-cyclical, growing in difficult economic times, with the classic example being the most recent–the boom in college enrollment during the Great Recession of 2007-2009. However, in economic crises, potential students’ decision-making often becomes more value- and ROI-oriented.
Today’s environment includes more options than in 2009 and could improve the value proposition of microcredentials, in that learners could consume courses and programming in smaller, lower-cost portions–increasingly with the potential to stack this into a degree. And, perhaps employers will be more willing to fund job-related microcredentials that meet training needs but still provide employees with the portability of credentials that they desire.
The sudden shift of even more professional work into an online format will only accelerate the blending of learning with working, and the embrace of online training and corporate microlearning. As more jobs move to being done online at home–both in the short-term and in ways that are much longer-lasting —training and professional development is less likely to place-bound or delivered “at the office” or on a campus.
Employers’ investments in digital HR infrastructure and tools to support a more distributed workforce can also be expected to accelerate investments in talent analytics and the use of AI in hiring, additionally because hiring leaders will have a much greater volume of potential candidates to screen for jobs, and as more hiring and interviewing shifts online.
New Job Market Demands Mean Shifts in Programming
It is a time of tremendous uncertainty in the job market, just as in our world, where the first order of business is defeating the virus and moving beyond this painful experience. Even if the downturn in the job market is temporary, the societal and cultural shifts will be historic—which means revisiting our fundamental assumptions about demand for educational programs.
Like in the Great Recession, the disruptions and dislocations happening today are certain to create a huge need for new retraining programs and resources, especially in forms that are accelerated. This favors what was already a rising demand for accelerated, job market-aligned programming such as bootcamps, apprenticeships and other types of programs that offer pathways to careers. This will apply across the educational spectrum, but it will be especially crucial for the tens of millions of Americans who have lost lower-income jobs.
What jobs employers will be hiring for—and what professional programs learners will be interested in pursuing—will also inevitably be reshaped. Just as September 11th inspired people to pursue careers in security, as first responders, or in the military, one could imagine career interests and new government investments focused on areas such as public health, life science and healthcare. The rapid digitization of some areas of the economy and job market will amplify the existing need for IT talent. And, domains such as supply chain, retail, and hospitality will have many of their job structures transformed.
While impossible to predict, this will be a crucial time to observe, analyze and plan for this new future.
