It’s March 12, 2020. You let out a sigh of relief as you press ‘send’ on your last email and close your laptop. It was a long week, darkened by the news that the World Health Organization has officially declared COVID-19 a global pandemic. The one positive twist? You feel like you’re headed into a quasi-vacation — I mean, it’s only a 14-day quarantine and who really works when ‘working from home’ anyway?
Fast forward one month. Your company’s two-week work from home stint came and went, COVID-19 cases have been rising every day, and you’re under a strict shelter-in-place order. What was supposed to be a fun change of scenery from the office has evolved into a nagging fear that your next meeting invite will be from HR with news that you’re getting let go. You possibly think back to the time you lost your tech job in 2000 or when your financial services company filed for bankruptcy in 2008 and shudder at the thought of how the economy will weather the pandemic. And despite the mounting tolls of those affected by the virus, you still ‘knew’ that, like the Dotcom Bubble and Great Recession, we’d get through this in time and go back to the status quo, right? This is how so many of us felt just one year ago.
Similarities between the Dotcom Bubble and Great Recession’s impact on the labor market
During the Dotcom Bubble in the late 1990s, U.S. technology stock equity valuations rose rapidly, and the NASDAQ index rose five-fold over five years. When the bubble burst between 2000 and 2001, the NASDAQ fell more than 75%, investors lost over $5 trillion, and the majority of dotcom companies founded since 1996 went bankrupt, laying off thousands of tech employees. Workers with prestigious programming degrees were left unemployed, and millions of Americans lost a significant portion of their net worth in the stock market. To many, this was the crisis of a lifetime. However, 20 years later, we reflect on the Dotcom Bubble as a significant historical event from which we learned and bounced back. There are stricter rules on financial disclosures protecting investors, and the tech sector more than rebounded, accounting for 25% of the S&P 500 today and bringing plentiful jobs to programmers. While the Dotcom Bubble had several macro impacts, they were generally attributable to an isolated sector, and as a nation, we recovered.
Though far more severe and far more significant in scale, the Great Recession from 2007 to 2009 mirrored the Dotcom Bubble in many ways. In the United States alone, real GDP fell 4.3%, household net worth fell 17.3%, and the unemployment rate peaked as high as 10%. If you did not lose your job, you knew several others who did, and many more lost their homes. Most developed economies worldwide were significantly impacted, yet some still grew — namely China, Indonesia, and India. The Great Recession ultimately ended in the U.S. through a series of government initiatives and regulatory reforms that have improved the resilience of the financial system today. Like we saw with the Dotcom Bubble, the Great Recession permanently impacted some sectors, others went unscathed, and as a whole, the U.S. economy and job market have bounced back with time.
How COVID-19 has impacted the labor market for every person, everywhere, and what it means for global companies
One year ago, in March 2020, most of us were waiting for the day we could say we’ve ‘bounced back’ from COVID-19 — a day when employment and the stock market rebounded, and we were all back in the office again. With hindsight, we understand how naïve that thought process was; over just one year, we see the ways COVID-19 has permanently affected global workforces, and we will not simply ‘bounce back’ with government stimulus and the passage of time. Employees at companies of all types, industries, and regions have demonstrated their ability to adapt to new ways of working and embrace change in a way we did not see during the Dotcom Bubble or Great Recession. Employees everywhere have adopted new technologies, continued to deliver high-quality work while balancing home and family demands, and learned new ways of connecting with people while handling the global pandemic’s stress. When COVID-19 ‘ends,’ employees do not expect to return to old ways of working, and companies must learn to adapt to the needs of an evolving workforce. Yet, in one example, most companies are not adapting corporate workspaces to meet these future trends, despite employee preferences.
COVID-19 has accelerated the need for new digital business practices while demonstrating employees’ ability to adapt to change. Employers need not fear their next large-scale implementation; with the right business readiness practices, employees are more equipped than ever to manage and succeed through new ways of working. The onus is now on leaders to rethink how to attract, retain, and enable their workforces to thrive in the post-pandemic world, and we at NTT DATA Services have the expertise to help you adapt to the new normal.
Post Date: 18/03/2021