How upskilling could help cities rebuild after Coronavirus

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This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Rory Heilakka, Principal, Oliver Wyman

  • Cities, impacted by COVID-19, will need to retrain workers who have lost jobs in the pandemic or risk losing residents.
  • Targeted programs and partnerships can steer workers toward fields where employers are hiring.

Imagine if the millions of people who have lost their jobs during the pandemic could be retrained for careers in cybersecurity, software programming, and other tech fields. Imagine if cities worked with local businesses, universities, and nonprofits to better match workforce needs with skilled candidates.

Such a prospect is not as far-fetched as it may sound. Even before COVID-19 upended the global economy, some cities had begun to retrain workers for high demand tech and healthcare jobs, which are less likely to be eliminated by automation. Calgary, for example, developed a multi-pronged approach to attract tech companies and modernize its workforce. Denver, Boston, and New York have partnered with existing nonprofits like Per Scholas to prepare low-income residents for better paying tech jobs. Others like Singapore quickly launched ambitious retraining programs to tackle the economic devastation of coronavirus. coronavirus, health, COVID19, pandemic

What is the World Economic Forum doing to manage emerging risks from COVID-19?

The first global pandemic in more than 100 years, COVID-19 has spread throughout the world at an unprecedented speed. At the time of writing, 4.5 million cases have been confirmed and more than 300,000 people have died due to the virus.

As countries seek to recover, some of the more long-term economic, business, environmental, societal and technological challenges and opportunities are just beginning to become visible.

To help all stakeholders – communities, governments, businesses and individuals understand the emerging risks and follow-on effects generated by the impact of the coronavirus pandemic, the World Economic Forum, in collaboration with Marsh and McLennan and Zurich Insurance Group, has launched its COVID-19 Risks Outlook: A Preliminary Mapping and its Implications – a companion for decision-makers, building on the Forum’s annual Global Risks Report.

Companies are invited to join the Forum’s work to help manage the identified emerging risks of COVID-19 across industries to shape a better future. Read the full COVID-19 Risks Outlook: A Preliminary Mapping and its Implications report here, and our impact story with further information.

Why Cities?

The stay-at-home orders imposed to limit the spread of coronavirus have left millions unemployed globally, and nearly 90 percent of American cities expecting revenue shortfalls, according to the National League of Cities and the U.S. Conference of Mayors. Many European governments implemented programs to limit the harm, but unemployment in 19 Euro countries climbed in June to 7.8 percent. The impact in the United States has been far worse. Unemployment was 10.2 percent in July, hitting Black, Latino, and poorer communities hardest.

Cities need to prioritize retraining programs even as they face budget cuts. They have a strong sense of what residents need and have the most at stake if people remain unemployed or relocate to find work. Already, two percent of urban residents have permanently or temporarily moved because of COVID-19, and another 19 percent are planning to relocate or leaning toward doing so, according to a recent survey by the Oliver Wyman Forumof approximately 1,100 Americans.

Offering better retraining opportunities could help cities keep residents and the employers seeking those skills. Roughly 40 percent of American survey respondents consider job matching and retraining among the top four services that should be available in cities post coronavirus, after access to free or subsidized healthcare, connectivity infrastructure, and eco-friendly energy management.

Image: Oliver Wyman

While it is still too soon to determine the long-term structural shifts resulting from the pandemic, when businesses recover, the composition of the workforce likely will be different because of the recent acceleration of e-commerce, telehealth, and remote work. To ensure that their residents have the necessary skills, cities should partner now with educators, nonprofits, and the private sector to better understand what kinds of jobs will be needed, when and where demand for certain skills is expected to increase, and who will be able to provide the necessary high-quality training.

Case studies

  • Singapore: An holistic approach
    Some cities already have programs in place that are making a difference. Singapore suffered significantly as it kept a lid on the pandemic. It expects full-year gross domestic product to contract 5 to 7 percent, the biggest downturn in its history. The government responded almost immediately to the crisis with multiple stimulus packages. Much of the roughly $66 billion investment is going to businesses for loans or to keep workers on payrolls, but the city-state also is spending about $2 billion to reskill workers.

    Since March, the reskilling program has placed more than 12,000 people in new jobs, including many in healthcare and digital fields. The goal is to help 100,000 workers by creating 40,000 public and private-sector jobs, 25,000 traineeships hosted by companies, and 30,000 slots in government-sponsored training programs. The new public-sector jobs will address Singapore’s long-term needs like healthcare and early childhood education as well as immediate positions to help with COVID-19 related care.
  • Calgary: A targeted approach.
    Calgary had no choice but to change course when falling oil prices and a structural change in the energy sector eliminated thousands of well-paid jobs. The unemployment rate climbed from 4.5 percent in 2014 to 7 percent in 2015, and above 15 percent as COVID-19 hit this year. The community created an economic strategy, Calgary in the New Economy, led by a Chief Executive Officer roundtable, which worked with 1,800 local leaders and community stakeholders.

    The strategy includes programs to support tech startups, promote science and math education, retrain workers, and attract new companies. It launched a short-term tech skills development program in February for displaced mid-career oil and gas professionals. The goal is to double the number of software engineers in the city and to increase the number of tech companies from 250 to 1,000 in the next 10 years.

    “We have a long road ahead, but I think we’re doing the right things,” Mary Moran, President and CEO of Calgary Economic Development, told us. “It keeps me up at night thinking about these super smart people. It’s a tragic waste of really good talent and change can’t happen fast enough.”

Potential solutions – and partnerships

Many cities already partner with local or national nonprofits that provide job training and placement programs. Cities should encourage these partnerships and rely on programs like Per Scholas, which is expanding to meet growing demand. The 25-year-old organization offers free tech training at 14 locations in cities including Atlanta, Detroit, and Philadelphia. About 40 to 45 percent of its participants have a high school or equivalent degree, and the remaining have at least some college or graduate school education. Much of the cost is off-set by revenue Per Scholas receives by creating customized training programs for businesses, enabling it to create a more sustainable model than just relying on government or charitable contributions.

“Cities should partner now with educators, nonprofits, and the private sector to better understand what kinds of jobs will be needed, when and where demand for certain skills is expected to increase, and who will be able to provide the necessary high-quality training.”

Per Scholas has its largest regional operation in New York, where it has trained more than 5,000 residents at sites in the Bronx and Brooklyn. About 80 percent of its graduates get tech jobs within a year. Graduates typically see their salaries increase after graduation from $9,000 to at least $36,000. During COVID-19, it has pivoted to a full remote distance learning model and continued to expand this summer to sites in Charlotte, N.C. and Chicago, Illinois. “We believe much of our nation’s talent is hidden in plain sight,” says Damien Howard, executive vice president of social ventures at the organization.

Every city has different challenges and resources. It takes a shared vision, long-term commitment, and strong communications between nonprofits, government, academia, and business to make structural changes. But those that best identify future labor needs, create effective partnerships, and provide the right educational opportunities will be far better positioned to retrain unemployed and underemployed workers now for jobs that will be necessary in the future.

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