COVID-19 will have a lasting impact on labour markets, and as much as 18 million Indian workers will be forced to switch to a newer occupation by 2030 because of the pandemic, a report said on Friday.
The impact will be "disproportionately" felt on low-wage workers in retail, food services, hospitality, and office administration, the report by McKinsey Global Institute, a think-tank, said.
The pandemic has disrupted labour markets because companies have been forced to respond to a new dimension of work - physical proximity, an official statement explained.
The report identifies the lasting impact of COVID-19 on labour demand, the mix of occupations, and workforce skills required in eight countries including India.
Three broad changes in consumer behavior and business models will persist to varying degrees because of the pandemic which include the rise of remote work, the increased embrace of e-commerce and virtual interactions, and the more rapid deployment of automation and AI (artificial intelligence), it said.
This will lead to a reshuffling of jobs in the economy over a decade, and over 100 million workers will have to find a new job, it said, adding 18 million of those will be in India itself.
The impact on India has been minimized because between 35-55 per cent of the country's workforce depends on what was classified as the outdoor production and maintenance arena, which includes construction sites, farms, residential and commercial grounds, and other outdoor spaces.
In India, the share of total work hours expended using physical and manual skills will decline by 2.2 percentage points, while time devoted to technological skills will rise 3.3 percentage points, it said.
"The long-term effects of the virus may reduce the number of low-wage jobs available, which previously served as a safety net for displaced workers," Susan Lund, a partner at McKinsey Global Institute (MGI), said.
These workers will need to prepare themselves to find work in occupations with higher wages that require more complex skills, such as jobs in health care, technology, teaching and training, social work, and human resources, Lund added.
In the future, remote work is here to stay, there will be a decline in business travel, gig work is set to expand, and automation will see an uptick, the report said.
"The pandemic will make the reskilling challenge more daunting. Its effects will fall heaviest on the most vulnerable workers. This creates a new urgency for companies and policymakers to help these workers gain the skills most needed in the future," Anu Madgavkar, also a partner at MGI, said.