By Coram Williams
CFO and Chief Economist
The two-plus years since the onset of Covid-19 have been marked by turmoil. There is the pandemic itself, of course — which appears to be under control, but I cross my fingers as I say that. But Covid-19 had longer lasting effects, driving the Great Resignation or Great Reevaluation. Though employment plummeted during pandemic-related shutdowns, it roared back in 2021, fueled by economic stimulus packages, vaccines, the opening of borders, and other factors — resulting in an acute labour market imbalance.
More recently, though, war in Ukraine has roiled the world in both humanitarian and fiscal terms, and the worst economic contraction in two generations is being felt.
When I speak with business leaders, the labour shortage is inevitably their uppermost concern. They know that big-picture demographic trends are not in their favour, and their first question is as fundamental as it is urgent: Will there be enough people, with the necessary skills, to get my organisation’s work done?
Together with Economist Impact, the Adecco Group recently developed employment forecasts that break down the labour market outlook at both global and regional levels. Keep in mind that Covid-19 hit markets in different ways, so regional recovery paths should be expected.
Many discussions around employment focus on when levels will return to their pre-Covid state. But we believe the focus should instead be when employment levels will return to the pre-Covid trend — that is, where levels would have been now if Covid-19 hadn’t struck.
Economist Impact expects the global labour market to fully recover from Covid-19 by next year. Regionally, however, myriad factors could delay this recovery. For example, before the war in Ukraine, employment in Europe was expected to recover in 2022. Now, taking into account the impact of the war, our forecasts suggest that European employment could recover in 2023 in an optimistic scenario, with a downside scenario forecasting recovery in 2024.