Conducted by researchers from Harvard and Illinois universities, the survey of 1,800 people in SMEs and larger businesses in the United States found there are substantial differences across industries in levels of remote working – being much more common, for example, in sectors with better educated and higher paid workers.
Another survey completed by economists from the National Association for Business Economics (NABE) found as many as 79% of jobs in the finance and insurance industry had moved online, despite an average productivity loss of 13% for the whole sector.
The banking sector is also experiencing job cuts. Deutsche Bank will close one-fifth of its branches in Germany, having made the prediction there will eventually be a permanent shift to online banking.
Management consultancy AT Kearney forecasts 25% of bank branches in Europe will close over the next three years, mainly due to changing customer habits in the wake of the pandemic. They also estimate 70% of consumer loan applications, deposits and account openings will be handled digitally. Today, over half of European bank customers are already not using physical or in-branch channels for purchasing or researching new financial products.
To keep pace with the eagerness and expectations of present and future customers, banks are also cutting the number of branches and offering remote services and digital financial products.
In the UK, Monzo and Starling are ‘neobanks’ with no physical branches on the high street, where the latter has launched an online web portal, in addition to their existing mobile app, in response to changing customer requirements, as more customers find themselves banking from home rather than on the move.
As workers are compelled to self-isolate by stricter guidelines during the lockdown, retail and commercial banks are encouraging customers to enjoy the convenience of online banking. Barclays, NatWest, TSB, Santander and Lloyds have all confirmed branch closures in 2020.
HSBC also plans to cut 35,000 jobs, as their CEO Noel Quinn admitted they could not ‘pause the job losses indefinitely – it was always a question of not if, but when’. He added: ‘I wish I could say that the next few months will see a return to normality, but that is unlikely to be the case.’
In the retail sector, online shopping trends and restrictions on physically trying on clothing mean thousands of traditional retail workers also face redundancy soon. The CEO of multinational clothing retailer Next, Simon Wolfson, has warned retail employment has become unviable as consumers increasingly shop online, and that the company was training and taking on more people in its call centres and distribution warehouses. The plunging value of retail property in city centres is also causing serious concerns, and the infrequency with which business rates are reviewed in relation to this.
Diminishing demand for retail inevitably compels companies to reduce their in-store headcounts.
The Centre for Retail Research has found that more than 125,000 jobs have been lost in the first eight months of 2020 in the UK retail sector alone – far higher than previous estimates. Globally renowned, blue-chip companies are spending the autumn months overhauling their businesses and slashing unnecessary costs – one which labour will inevitably be.
Career plan rethink?
These scenarios will encourage young people to plan their careers differently. Though the quantity of available jobs in banking and retail will minimise in the short term, demand for skills will increase for more logistical and IT-focused roles.
More jobs will also be created for couriers and warehouse staff, evidenced by delivery firm Yodel’s announcement they will hire around 3,000 people before the crucial Christmas period.
Banks will also take the opportunity to make digital transformations to minimise costs and improve customer experience. As they incorporate more digital options, they will have a key influencing role on customers not yet fully motivated to make the shift towards online banking.
At the same time, many consumers already investigate new products online. However, companies often fail to convert these enquiries into sales. As a result, retailers will develop cutting-edge digital sales capabilities through more sophisticated digital marketing.
The shifts towards digital banking and retailing are inevitable. The more companies prepare and execute their transformations effectively, the better for consumers and company profits alike.