The sudden onset of the global COVID-19 pandemic — and the containment measures imposed to combat it — are reshaping the labor market. Jobless claims are spiking to unprecedented levels, numerous businesses are permanently shutting down, and others have been forced to digitally evolve.
Last quarter, the slow growth of the Cognizant Jobs of the Future Index (CJoF) reflected the “distant early warning” effects of the nation’s stay-at-home orders and non-essential business closures. The second quarter’s dramatic decline, however, showcases the entire “blast radius” of a full quarter of a closed economy.
Even amid severe job loss, the crisis has accelerated the use of digital technology, and many practices that became more rule than exception during the pandemic — online commerce and banking, remote working and healthcare, digital learning and entertainment — may stay that way long after the crisis subsides. Beyond the short term, the pandemic may have a more lasting impact on the demand for digitally-enabled jobs of the future.
The severe decline in the job postings of both the CJoF (-149,000) and All Burning Glass Jobs Index (-2.8 million) is a product of many competing and compounding effects of the current economic environment. While the drop in postings is largely due to business closures and contractions, another factor is the uncertainty of the labor market. A widespread lack of confidence has diminished overall employee turnover as individuals stay put instead of seeking new opportunities. This reduces the number of unfilled positions and further constrains the number of overall postings.
COVID’s mind-numbingly catastrophic effects
The CJoF Index tracks demand for 50 digitally-enabled jobs of the future identified by Cognizant’s Center for the Future of Work and captures the quarterly fluctuations in postings for these jobs. In the second quarter of 2020, the CJoF Index dropped -3.1% year-on-year, from an index figure of 1.50 in Q2 2019 to 1.46 in Q2 2020. The All Burning Glass Jobs Index posted a comparable decline of -3.5% year-on-year, from 1.35 in Q2 2019 to 1.30 in Q2 2020.
As expected, given the ongoing economic shutdown, the CJoF Index posted a significant quarter-on-quarter decline of -28.2%, from 2.02 in Q1 to 1.46 in Q2. The All Burning Glass Jobs Index posted a similar quarter-on-quarter decline of -26.5%, from 1.77 in Q1 to 1.30 in Q2.