Global Talent Update – August 2020

Globe“Companies around the world are acknowledging that work is not where we go, it’s what we do. Where and when work gets done will be determined by what makes the most sense to drive the highest levels of productivity and engagement. This has important implications for the new world of work, ranging from issues such as company culture, inclusion, and seeking employees with traits beyond job-specific skills.”
Bert Miller, President and CEO, MRINetwork

Europe, Middle East and Africa

Companies around the world are currently engaged in a delicate balancing act as they transition from crisis-mode to preparing and executing, plans for the future of work. Organisations are having to get this balance right across Europe as countries come out of local lockdowns at varying speeds; offices in Germany and the Netherlands have reopened much earlier than the UK, for example.

According to a recent European Occupier Survey conducted by CBRE, a global provider of real estate services, 93% of occupiers of office space indicated that remote working will increase in the coming years, but this will not necessarily be as a replacement for office space. “Fluidity will come in the form of working from a variety of locations (from home, to headquarters, to flex office to coffee shop) reflecting the diversity of tasks and the preferences of employees,” notes the report. “For example, at aggregate European level, the proportion of the workforce working from home ‘sometimes’ has risen from 6% to 9% over a 10-year period. This is not a uniform trend; in Germany this proportion has declined with workers shifting from working from home ‘sometimes’ to ‘usually’ in increasing numbers, the opposite to what we have seen in France. The UK has been the most fluid of these countries, with over a fifth of employees working from home ‘sometimes’ over the decade.”

Both working from home ‘sometimes’ and ‘usually’ mean that most employees go to an office much of the time. There will be a subtle acceleration of the trend towards greater provision and focus of wellbeing measures in the workplace over the next 12 months. This will begin with a review of workplace density, cited by 46% of European occupiers in CBRE’s survey, but will extend beyond this, including the continuation of health and safety elements enforced by the pandemic such as enhanced cleaning and observation of social distancing, as well as investments in touch-free technology and mental health and wellbeing programmes. Occupiers are trying to create great workplaces that attract, retain and engage the best talent across markets.

The outlook for at least the next 12 months suggests that the temporary forced mass remote working pilot will help accelerate the trend of fluid working, rather than lead to a wholesale structural shift in such a short-period of time.

Asia-Pacific

Job losses across Asia-Pacific could double due to coronavirus — and some of these jobs may not come back for a while, S&P Global warned, as reported by CNBC. “Unemployment rates across Asia-Pacific could rise by well over 3 percentage points, twice as large as the average recession,” said S&P’s Asia Pacific Chief Economist Shaun Roache.

The services industries are among the first to feel the impact of those lockdowns, but that very sector is also what’s driving job creation in countries like Japan and South Korea, the ratings giant said. “Jobs are at the core of the current economic crisis,” said Roache. Measures designed to limit viral spread are striking at the heart of the engine of job creation across Asia-Pacific — the service sector. Service sector activities often require human-to-human contact while mitigation policies aim at social distancing. The clash of these two is obvious.”

“Given the way the services sector is being hit by social-distancing measures, it’s plausible that, for every percentage point fall in growth in Asia-Pacific, the rise in unemployment could be larger now than in previous cycles,” the report said.

Among nine major economies in Asia-Pacific, the largest increases in unemployment rates on average were seen in Australia, Hong Kong and New Zealand, according to S&P, which analyzed official data from those countries going back to 1980.

Americas

The economic outlook for Latin America, which is now the global epicenter of the coronavirus pandemic, was downgraded yet again this month. Lockdowns at home and the global recession will pummel economies through various channels including lower trade, commodity prices, tourism activity, remittances and domestic demand, according to a report by FocusEconomics, which provides forecasts from leading world economists.

Inflation in Latin America inched up to 5.9% in June from 5.8% in May, which had marked a two-year low. Higher inflation in Brazil and Mexico, mainly owing to recovering energy prices, drove the uptick. Economic slack has kept inflation broadly in check in most countries. Regional inflation is expected to ease from current levels going forward, largely on muted demand.

The central banks of Brazil, Colombia and Mexico slashed their policy rates yet again in recent weeks in a bid to further shield their economies from the Covid-19 fallout. Meanwhile, policymakers in Chile and Peru opted to leave benchmark rates steady at their multi-year lows. Central bankers overall are seen cutting rates further by year-end, according to the report.

“The vast majority of the region’s currencies lost ground against the USD over the past month, with the Brazilian real especially battered due to the alarming state of soaring Covid-19 cases in the country. The Colombian peso was the only currency which strengthened against the greenback. Currencies are projected to weaken much more sharply this year compared to 2019,” predicts the report.