New graduates are entering a slowed world of work caused by the pandemic, but these circumstances will leave scars long past mass vaccination and economic recovery.
For Canadian graduates coming out of the 2008-2009 recession, the impact on employment was more extreme and longer-lasting than what the general working populace experienced. According to an RBC report, university-educated workers aged 22-26 experienced a 7 percent higher unemployment rate than those aged 30-54 at the height of the recession, while those who entered the workforce at the tail-end of the recession experienced 11 percent lower wage growth over their first decade of work than those who entered just before the recession began. In a 20-year Canadian study, graduates who began their careers during a recession experienced a 5% reduction in earnings over the span of a decade.
Economic recovery may differ during this recession due to many factors, including the acceleration of digital transformations across firms or previously unconventional fiscal and monetary interventions. But with central banks forecasting a slow recovery and the Bank of Canada predicting job losses greater than in 2008/2009, the bottom line for recent graduates is a prolonged detriment to their careers.
Last month, the Ontario Chamber of Commerce (OCC) released its fifth economic report, highlighting significant layoffs in 2020 with less than half of survey respondents reporting confidence for their business in 2021. Recessions of the past show us that with increased pressures to find work, new graduates are willing to take on lower-quality employment, which can lead to over 40 percent of persistent earnings losses for the first decade of a new graduate’s career. We can also expect a surplus in temporary labour for young professionals, propped up by the rise in the gig economy, meaning more pressure for employee output, less job security, and less time for professional development. The talent pool has also widened without geographical constraints of the past. A PwC survey of 700 global CEOs found that 78 percent believe remote work environments are here to stay. In an increasingly globalized world, job candidates need only a decent wireless connection, and employers can search for top talent with lower costs of living.
A couple of years ago, I sat on a panel discussing the future of post-secondary education in an uncertain world. A Founder-Turned-Angel-Investor claimed that it’d be foolish to invest in any graduate who did not have a co-op placement, citing the value of “real-world experience” in an increasingly educated talent pool. The data suggests that employers agree: 75 percent of graduates who had in-study work experience related to their field of study were employed within 3 months of graduation, compared to 61 percent for those with unrelated work experiences and 48 percent with no work experience.
Well thanks to the pandemic, we have a “Chicken and Egg” problem: a third of students had their work-integrated learning opportunities canceled or postponed in 2020, while employers are less willing to take on risks with hires and invest in their training. Looking to the past, we can anticipate that educational institutions will be pushed to address the belaboured “skills gap” that exists with inexperienced new graduates.
Whether you believe in the impending doom of Higher Education prophesized by the likes of NYU Stern’s Scott Galloway or not, post-secondary education across the country will have to be able to do more with less. In a future of unpredictable variables like the impact of remote learning (“ZoomU”), enrolment unpredictability (particularly for international students), and government funding, institutions may be squeezed past their limits – Laurentian University, for example, recently announced that it had gone insolvent. Institutional leaders must be aware that short-term pressures can cause long-term adverse effects, like narrowing learning outcomes around highly specific skills without teaching students resilience in an uncertain world. According to a 2020 research report conducted by the World Economic Forum, 50 percent of employees will require some form of reskilling by 2025, yet the top skills required are centred around critical thinking to adapt in a changing world, such as complex problem-solving and stress tolerance. But heck, in Ontario, we don’t even know the full impact of the province’s 2019 changes to the postsecondary funding formula, tying 60% of institutional funding to specific outcomes, let alone the impact of pressures caused by COVID-19.
None of us can predict what the world will look like tomorrow, nor can we identify the causal factors that will help graduates succeed in the post-pandemic world. Educators, policymakers, businesses, and individuals have a great task ahead of them that will require both immediate supports, as well as an openness toward experimentation, iteration, and failure. Because all we really know is that we are headed for a future unlike anything we have ever experienced.
We’ll continue to monitor the latest developments of these issues at Delphic Research. If you’re interested in learning more about what we do and how we do it, sign up for our newsletter, book a consultation, or feel free to contact me at email@example.com
About the Author
Danny Chang is a Senior Associate at Delphic Research. Having served as an executive of multiple advocacy organizations, he has influenced public policy at all levels of government throughout his career. Focused on the impacts of technology in higher education, Danny has served as a Director of eCampusOntario and has advised the Provost on Online Education and Open Access at Western University.