The COVID-19 pandemic has disrupted economies, organisations and our lives – especially how we work, communicate, and learn. Economies will likely continue to be impacted as governments and organisations experience rising debt levels. Based on the 4th edition of PwC’s COVID-19 CFO Pulse Survey, 72% of Middle East CFOs are predicting the return to ‘business as usual’ to take more than three months.1 The resulting slowdown in economic activity has forced many businesses to close, and in turn has led to a radical surge in unemployment levels. During the first quarter of 2020, global working hours dropped by 4.5% which translates to roughly 130 million full-time jobs.2 Furthermore, according to the 4th edition of PwC’s COVID-19 CFO Pulse Survey, 52% of Middle East CFOs and 59% of UAE CFOs expect to see changes in their organisation’s staffing, such as furloughs, due to slower demand in the region.3
Businesses are experiencing challenges in generating and diversifying revenue streams, cutting costs, and ultimately keeping afloat. 89% of Middle East CFOs are expecting substantial reductions in both their revenues and profits.4 There are certain sectors that have been hit worse than others due to drastic reductions in demand for their services or products, such as hospitality, wholesale and retail, transportation, oil and gas, construction and real estate, as well as banking and finance. Businesses operating in those sectors have been profoundly affected due to disruptions in input costs, productivity, and supply chains.
The fiscal, monetary, and financial response from policymakers has been quick and substantial in supporting affected businesses and individuals. Several countries within the Gulf Cooperation Council (GCC) have taken strong measures to support their economies and protect affected businesses and households. These measures include water and electricity subsidies, credit guarantees, and liquidity support to businesses, especially Small and Medium Enterprises (SMEs).5
There are a number of considerations for governments, organisations and individuals to address unemployment and adjust to the new normal. These considerations are reflected in the PwC ‘REACT’ framework.
The COVID-19 pandemic and its inherent effect on unemployment has highlighted the need for adaptability and resilience in today’s workforce, and accelerated the shift towards a new, digital economy. The implications of unemployment on workforce strategies and policies are broad and extensive. Employers will be looking to hire individuals with transferable skills who can adapt to the rapidly evolving workforce which paves the way for alternative workforce sourcing and recruitment strategies. Given the success of remote working and the accessibility it offers to top talent around the world, will employers now look to hire full-time workers from abroad and have them stationed in a different territory? Will permanent remote working become the new normal, and what workforce policy and regulatory framework reforms will it entail?
While governments and organisations have a responsibility to support their citizens and employees throughout this transition, individuals also have an obligation to take initiative, and invest time and effort in their own self-development. Many experts are predicting that a high percentage of job losses due to COVID-19 are permanent, leaving many people unemployed for the foreseeable future. Researchers estimate that 2 out of every 5 jobs lost due to recent pandemic-induced layoffs will result in permanent job losses.11 Recovering from the economic fallout will likely take several years as businesses look to get back to ‘business as usual’. In the meantime, it is important that those who find themselves unemployed utilise this time to upskill themselves to ensure that when the opportunity to re-enter the workforce arises, they will be able to seize it with both hands.
Governments, organisations and individuals play a critical role in responding to the surge in unemployment by facilitating a smooth transition through workforce policy reforms and upskilling initiatives, and positioning the workforce to recover and adapt to today’s ever-changing environment. It is time to REACT!
1) “PwC’s COVID-19 CFO Pulse Survey - 4th edition. Middle East Findings,” PwC Middle East, June 16, 2020, https://www.pwc.com/m1/en/publications/covid-19/CFO/pwc-middle-east-covid-19-cfo-pulse-survey-4th.pdf.
2) “ILO Monitor:COVID-19 and the world of work. Third edition,” International Labour Organization, April 29, 2020, https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/documents/briefingnote/wcms_743146.pdf.
3) “PwC’s COVID-19 CFO Pulse Survey - 4th edition. Middle East Findings,” PwC Middle East, June 16, 2020, https://www.pwc.com/m1/en/publications/covid-19/CFO/pwc-middle-east-covid-19-cfo-pulse-survey-4th.pdf.
5) “Policy Responses to COVID-19,” International Monetary Fund, last modified May 29, 2020, https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#U.
6) “Skills Expander. Tackling the challenges of upskilling and job transformation,” PwC Singapore, June 6, 2020, https://www.pwc.com/sg/en/publications/upskilling-for-competitiveness-and-employability.html.
7) “PwC’s COVID-19 CFO Pulse Survey - 3rd edition. Middle East Findings,” PwC Middle East, May 12, 2020, https://www.pwc.com/m1/en/publications/covid-19/CFO/pwc-middle-east-covid-19-cfo-pulse-survey-3rd.pdf.
8) “New world. New skills. Insights from the GCC Hopes and Fears survey,” PwC Middle East, 2020, https://www.pwc.com/m1/en/issues/pdf/new-world-new-skills-gcc-2020.pdf.
9) “22nd CEO Survey - Middle East Findings. Confidence down, disruption all around,” PwC Middle East, 2019, https://www.pwc.com/m1/en/ceosurvey/2019/pwc-middle-east-ceo-survey-2019.pdf.
10) “New world. New skills. Insights from the GCC Hopes and Fears survey,” PwC Middle East, 2020, https://www.pwc.com/m1/en/issues/pdf/new-world-new-skills-gcc-2020.pdf.
11) Jose Maria Barrero, Nicholas Bloom, and Steven J. Davis. “COVID-19 Is Also a Reallocation Shock,” National Bureau of Economic Research, May, 2020, https://doi.org/10.3386/w27137.