As pandemic recovery efforts progress worldwide, they promise to reverse some of the havoc COVID-19 has wreaked on industry and commerce. Reskilling will be a vital element of this rehabilitation, especially for low-income workers in the much-changed labour landscape. In Asia, that landscape has special features—which may considerably affect the region’s development.
Thailand has been hard hit—but remains resilient
COVID-19 has resulted in fundamental changes in consumer and business behaviour—shifts that McKinsey Global Institute (MGI) analysis suggests will dominate the global economy for the next decade. The pandemic has had a particularly damaging effect on occupations requiring high levels of physical proximity, with consequences for low-wage workers such as waiters, shop clerks, hotel receptionists and stylists. Travel and tourism have been deeply impacted.
As a significantly service-based economy heavily dependent on tourism, Thailand has suffered setbacks: the country’s economy shrank by 6.1 percent last year. Visitor numbers plummeted from nearly 40 million in 2019 to 6.7 million in 2020, and nearly a million tourism workers lost their jobs in the first half of 2021 alone.
Nevertheless, there is hope on the horizon. The Thai economy is expected to recuperate gradually, and in January 2021 the World Bank forecast growth of 4.7 percent in 2022—dependent on sustained employment recovery.
In many Asian economies, there are technological bright spots—innovations that can mitigate the pandemic’s economic impacts. In Southeast Asia, accelerated digitalisation brought on by the pandemic has opened up new roles in e-commerce and supply chains. In 2020, Thailand saw a 58 percent jump in households shopping online, one of the highest year-on-year growth rates in the region. In China, in the first half of 2020, just four Chinese e-commerce and delivery companies created 5.1 million new jobs, many of which were filled by factory workers and small-business owners displaced by COVID-19.
Across the region, businesses in all industries are implementing new digital technologies, resulting in a surge in demand for software and cybersecurity specialists. Jobs in digital marketing, such as SEO optimisation specialists and social-media managers, are also on the rise.
Training for transition
Given this complex landscape, how can Thai businesses navigate the post-pandemic future of work? Companies have long wrung their hands over the mismatch between available skills and available jobs, and COVID-19 has heightened the challenge of reskilling people to meet the demands of new, expanding occupations. McKinsey research finds that, as a result of the pandemic, even more occupational transitions will be required in the future—about 100 million more than initially estimated, across the eight countries we examined: China, France, Germany, India, Japan, Spain, the United Kingdom, and the United States.
The long-term effects of the virus may reduce the number of low-wage jobs, which previously served as a safety net for displaced workers. This trend is markedly different from pre-pandemic dynamics in many countries, when net job losses were concentrated in middle-wage manufacturing jobs that were being superseded by automation.
Well paid jobs (in the top 30 percent, by wages), such as those in healthcare and the STEM professions, are likely to continue to expand; but these require a specific mix of skills and credentials. This raises the bar for retraining and educating displaced workers, many of whom are women, young people, immigrants, and those without college educations. There is an urgent need for innovative training and reskilling programs, and support for workers as they make these difficult transitions.
In Thailand, the Pacific Asia Travel Association (PATA) has also stressed the need for reskilling and capacity-building in order to resuscitate the tourism industry. New training programs need to encompass COVID-19 health and hygiene standards and safety procedures, as well as reimagine product development and marketing to accommodate the desires of tourists in the new normal.
A new urgency in the new normal
Since the start of the pandemic, many Asian governments extended extraordinary support to workers suddenly furloughed. Now, decision-makers may consider offering assistance to those who need to acquire new skills. This might take the form of government-backed, end-to-end reskilling bootcamps, or one-stop shops that provide support and reskilling resources to job seekers in transition. Such programs might also support gig workers, as many people take on gig jobs to support themselves between more permanent employment opportunities.
New platforms could be developed to better match skills supply to demand. Thailand could analyse likely sources of economic growth and employment, and develop feasible pathways for job seekers to transition into new roles. Talent Exchange, launched by Eightfold.ai and supported by McKinsey, is an example of one such platform launched to match job opportunities with individuals impacted by COVID-19.
Other solutions could include facilitating partnerships across the corporate world to boost the volume and effectiveness of reskilling, which before has typically taken place in siloed training institutions. In New Zealand, major companies have signed on to the Aotearoa New Zealand Skills Pledge, which commits them to doubling their on-the-job training and reskilling by 2025.
Although the pandemic is certainly not over, Asia has shown tremendous resilience throughout the storm. Now is the time to capitalise on this strength. With the right actions, implemented at scale, the region can position itself to emerge from this challenging period in relatively good shape. With collaboration between companies, policy makers, and educators, reskilling programs can speed a sustainable recovery across Asia, building a better working future for this unique region.
About the Authors: Noppamas (Yam) Sivakriskul is McKinsey & Company’s senior partner and managing partner for Thailand, where Liesje Meijknecht is an associate partner. For further information please contact Alan Laichareonsup at email: Alan_Laichareonsup@mckinsey.com
Series Editor: Christopher F. Bruton, Executive Director, Dataconsult Ltd, chris@dataconsult.co.th Dataconsult’s Thailand Regional Forum at Sasin provides seminars and extensive documentation to update business on future trends in Thailand and in the Mekong Region.
