A workplace revolution is happening. Whether you call it dynamic or flexible working, the way we work has really changed. It’s the biggest change in 100 years and it’s setting the tone for the century to come. That’s the view of James Reed, chairman of Reed, one of our biggest recruitment firms.
He should know, having worked for nearly 30 years at the firm established by his father, Sir Alec, in 1960. He has even found the time to write a few books on job-seeking best practice.
What he has witnessed and the data his business has produced over the past 18 months has left him convinced that the way we work has changed for ever.
“The First World War was a time when a lot of women entered the workforce and that was eventually normalised and it changed the workplace for the 20th century,” he says.
“The change we are seeing today is of a similar magnitude. While lots of people can’t work from home, for those that can, this is significant.”
He believes that, suddenly, there is more power and more choice in the hands of employees and the remote working that was thrust upon millions overnight, is set to change not just people’s work-life balance but the balance of the economy.
He points to London where workers appear to have left in droves. One estimate puts it as high as 700,000, nearly eight per cent of the capital’s population.
In July, he was already predicting an acute shortage of lorry drivers
“London might revive but not to the same extent,” says Reed. “You could have a job in London but work from and stay in Glasgow most of the time.”
He describes it as a process of reverse migration and one that, in time, may actually help support the government’s levelling up agenda. Despite this trend, office blocks continue to go up in and around London but Reed is unconvinced there are going to be many willing to use them.
“I have not met many business owners who want to pay more rent or people who want to spend more time and money on commuting,” he points out.
“Businesses can save costs on rent and people can benefit from more flexible working. That’s why this is a revolution.”
But remote working and everything it promises to employees and employers alike, only really benefits office workers. Is this revolution going to bypass those in what have become known as “frontline” roles and sectors such as hospitality?
“There is a real danger that we could end up with a two-speed workforce,” admits Reed.
While non-office workers may not receive the benefits of remote working, his company’s data shows that wages in these sectors are going up – these workers are now scarce, giving them more power.
But their scarcity is the subject of fierce debate. Some point to Brexit. Others point to the pandemic and still others point to the tired old trope that it is down to laziness and the over-generosity of the benefits system.
Reed’s view is more nuanced. While he believes that Brexit has certainly had an impact (in July, he was already predicting an acute shortage of lorry drivers), he believes that there are other issues at play.
Having seen that remote working is a viable option, many are seeking opportunities in roles that allow for that. Also, for some sectors, particularly hospitality and some delivery roles, students would have made up a sizeable portion of the workforce but with universities closed for 18 months, those people have been denied to local employers.
But he believes there are longer-term trends at play, too. Ones that have been accelerated by the pandemic.
“One of the reasons I think there is an increase in demand and limitation in supply is that in 1977, 50 per cent fewer babies were born than in 1964. That will have a big effect on the workforce as that generation comes to retire,” he says.
“Before the pandemic, 30 per cent of the workforce was over 50 years old but a lot of them exited ‘stage right’ during the pandemic and that further tightens the labour market.”
These labour shortages can’t, he believes, be seen purely through a Brexit lens, hence his belief that what we are seeing is a genuine revolution.
“This workplace revolution has been accelerated by the pandemic – it would have taken 20 years otherwise – but it is very significant and is what lies behind a lot of these shortages,” he says.
While this is creating problems for employers, it should mean better times ahead for employees that work in sectors experiencing labour shortages.
“Our early data suggests that those employees will be paid more and have more power in the workplace. They are in short supply,” he says.
“We have been looking at the data for jobs in these sectors and pay is up five per cent. For jobs paid under 25K, the pay is up 14 per cent, so employers are recognising that if they want these workers, they have got to pay them properly.”
And for younger employees or those seeking work, he believes that despite the doom and gloom, things are starting to look up.
Our data has been incredibly reliable for 20 years in predicting business cycles and what is changing – we are the Crow’s Nest
He admits that the ads for entry-level jobs that seek two years’ experience annoy him – “they should be giving people a chance” – but on the whole, most employers are being less specific and more realistic about what they want from their employees.
“We conducted some research for a book I wrote years ago and we asked employers if they had to choose between two candidates, one with all the skills required but not the desired mindset or the reverse which one would they choose. Ninety-three per cent chose the desired mindset,” he says.
And for many, that mindset is adaptability, commitment and flexibility. But more than all of that, they want employees that they can trust.
“If you ask young people what the most important thing to an employer is, they never get the right answer: that you are honest and trustworthy. That is the most important thing for employers.”
The other good news for young and old alike is that the economy appears to be on the road to recovery.
“Our data has been incredibly reliable for 20 years in predicting business cycles and what is changing – we are the Crow’s Nest on the ship,” he says.
“The first thing that happens, if someone is thinking of hiring, they will put an ad up. It is [a] strong, leading indicator [before official statistics].
“We saw the economy going off in May or June 2019 and it looked like a regular business cycle recession. Then Covid happened which made it much worse and much deeper but we are coming out of that cycle now.
“In spring we had a jobs boom. May saw us take over 275,000 new jobs which was 26 per cent up on April and a 237 per cent year-on-year increase. This has continued into June and into July.”
Stats don’t lie but if Reed is right about the workplace revolution, this will be no ordinary economic recovery but one in which the way millions of us work changes, the economic balance of the country shifts and the pay and conditions of some of our most crucial but unappreciated workers improves.
This article was originally published in The Independent newspaper