The COVID-19 pandemic significantly disrupted typical working habits in 2020 and 2021, and there is much speculation about how things are going to settle down moving forward. In its latest report, ‘TMT Predictions 2022’, leading data and analytics company GlobalData offers its view on the future of work. The report reveals that reshoring – when the production of goods is returned to the company’s original country – gig economy regulation, and flexible working will become the new norm.
As 2021 draws to a close, Amrit Dhami, Thematic Analyst at GlobalData, offers her view:
Companies Homeward Bound As Offshore Manufacturing Too Costly
“Reshoring is an increasingly attractive option. Offshoring is losing its cost advantage due to significant supply chain disruptions and rising labor costs in countries such as China. Companies are also being pressured to localize production to reduce their carbon footprints and support the post-pandemic rebuilding of their home country’s economy. Reshoring will destroy more jobs in developing countries than it will create in developed countries. It also won’t make up for all the jobs initially lost through offshoring because today’s production line is less labor intensive, but it will still make a welcome difference as developed economies shake off the pandemic.
“Geopolitics also comes into play—especially in the US. The direction of foreign policy is driving President Biden to reduce the US’s reliance on China. Furthermore, concerns over EV battery production and domestic semiconductor supply have US manufacturers in the transportation equipment, chemicals, and computer and electronics industries looking to reshore to manufacture these critical components themselves and rival China’s vertically-integrated EV supply chain.
“Though the acceleration of reshoring hints at autarky, it won’t necessarily lead to deglobalization. The US knows it stands to gain little from political and economic isolation, and that it currently stands at a crucial juncture in global cooperation on issues like climate change.”
The Precarious Gig Economy
“The growth of the gig economy that we saw in 2021 will continue into 2022. However, this growth comes with increasing instability. The gig economy model is precarious and unsustainable due to landmark regulatory changes across Europe, classifying more and more gig workers as employees rather than independent contractors. Governments will continue to legislate in favor of gig workers, and this will heavily increase costs for companies that now need to afford sick days, holidays, and pensions. Uber is still yet to make a non-adjusted profit, and its model is unlikely to survive such a shift to its operational costs.”
Flexible Working Has Become An Office Staple
According to GlobalData surveys*, 42% of workers are still working from home full time, but most offices will return to at least 50% capacity by May 2022.
“Hybrid working will remain commonplace even after the pandemic subsides, as workers are enjoying the flexibility of hours and lack of a commute. Companies need to maintain a flexible working arrangement to succeed in retaining and attracting top talent.”
*’Returning to Normal Place of Work’ survey available on Verdict community sites since May 19, 2021, with 5,312 responses; ‘Anticipating 50% of Employees Back to the Office’ survey available on Verdict community sites since March 22, 2021, with 5,063 responses.
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