More than a collar

Needless to say, the employment landscape has undergone major transformations over the last 3 years. The pandemic introduced remote work (for those who could manage it) coupled with supply chain issues, the post-lockdown economic recovery ignited a war of talent of historical proportions (bringing the unemployment rate to levels not seen for decades) and the current economic slowdown puts an increasing number of firms on the back foot – as we have already covered in this blog.

This chain of events has also marked, to a certain extent, a change in dynamics in the developed economies. After decades of globalization-induced offshoring and pressures on wages, manual labour or ‘blue-collar’ workers are back in demand. A combination of geopolitical tensions, increased energy and transport costs, supply chain disruptions and an increased consumer demand for ‘local’ products have fostered the value of close supply networks, either national or in neighbouring countries (so-called ‘near-shoring’). This trend reversion explains in part why, in Switzerland, the industry with the highest number of vacancies is… manufacturing.

Conversely, the dominance of the white-collars will most probably weaken – a theme that the famous investor Michael Burry brought forward late last year. The COVID crisis first showed that many organizations could still fulfil their duties with a large share of their overhead ‘off-grid’, only to then demonstrate that virtual communication methods, although not perfect, are sufficiently robust to seek and hire talent on a worldwide scale. Over time, physical HQs will likely get more hybrid to embed cheaper and/or acute talent where it sits.

This change of paradigm will pose a challenge to both governments and corporations. Political decision-makers will have to adjust national industrial policies (beyond simplistic and rather demagogic proposals such as ‘relocating medicine production’) and management teams in the aforementioned HQs now have an opportunity (better said, a duty) to review their corporate footprint. Last but not least, in both cases, ensuring that each individual continuously masters the right skillset to cope with this new situation will be crucial.