19.01.2021

Study: Teleworking in Europe in 2030

The dGen Institute gives a detailed picture of what the continent's labor market would look like in nine years

Going back 100 years, we can see what are the most significant global changes in the labor market. The economies of the eighteenth and nineteenth centuries evolved from predominantly agricultural to productive in the twentieth century, after the end of the First World War. We call the third stage of development the "Technological Age" or the period of the middle of the twentieth century, in which humanity entered an economy based on information technology.

Today, just over 4% of the world economy is created by agriculture, nearly 23% by production, and more than 70% by the services sector. Although some of the positions in the service business cannot be performed completely remotely (such as those in the hotel and restaurant industry), most of the employment in the field has this opportunity. Most people around the world have abandoned offices and adapted to home office work, a phenomenon that has been going on for nearly a year. If in the past telework did not exist due to the lack of cheap and effective ways of communication for employers, now it is not. The phenomenon has the potential to consolidate the fourth epoch-making change in the global labor market, as teleworkers continue to increase.

A detailed study by dGen, an independent non-profit research institute focused on how blockchain technology can contribute to a decentralized future in Europe, predicts what the continent's telecommuting will look like in 2030. Until now, staff recruitment has taken place mainly on site. We are seeing a sharp change in this regard - due to the Covid-19 crisis, most employees have significantly greater opportunities to work remotely, and employers have found that they have serious access to talent from other countries.

How labor needs have changed

However, companies that build a remote organizational culture are still looking for ways to optimize their recruitment costs. This is due to the fact that it is difficult to create a job advertisement that is noticed in all countries. In order to achieve the effect of demand, the costs of building and developing an employer brand have increased significantly for this type of company. At the same time, the biggest job search platforms have added the "remote" option to their ads. For example, at the moment careerbuilder.com, a platform with offices in the USA, Canada, Europe and Asia, can find about 26,000 current job offers offering work from home.

Among developers in the IT sector and designers traditionally have the largest number of remote workers - according to a study by the European Commission in 2018. For them not recently there are specialized platforms with job postings. There are now online platforms for freelancers. Many sectors are experiencing the need for closely targeted international recruitment sites, precisely to make it easier to reach anywhere in the world, at the expense of less.

Carlos Gomez, Talent Manager at CryptoRecruit, the world's first cryptocurrency and blockchain recruitment company, told the study that conflicts between business owners and directors are emerging due to the need for global changes in the labor market. and Human Resources specialists.

... Even after decades of experience, most of them (ed. Recruitment specialists) are still struggling to find talent within the new (remote) labor market dynamics.

How teleworking will change the urban and rural environment

As competition for jobs and talent increases, it may also affect corporate hierarchies and the geographical distribution of management and executive teams. Access to a wide variety of employees in Europe will affect socio-economic processes in both urban and rural areas.

The observations so far outline a trend in which the main prerequisite for starting work will be access to an Internet connection. This will allow companies to reduce their overhead costs and those for renting large offices, and instead will be able to set up headquarters in small settlements without destroying urban areas with thousands of employees and increased traffic. In Bulgaria, for example, at the beginning of the state of emergency there was an increased interest in rural areas and housing by young people. Something that until now was typical for people of pre-retirement age. If the trend continues, it is very possible to start rural development at the expense of cleaner and calmer cities. Although the scale of the digital workforce in Europe is not yet clear, it can be expected that the migration of young people to work on the continent will decrease.

Can the trends in Eastern Europe be reversed?

The authors of the study comment that despite the spread of the practice of telework, in fact there will not be many countries that will enjoy employment growth. The conclusion is based on a study by the global consulting company McKinsey. Emphasis is placed on countries in Eastern Europe, where the population is aging and emigration is high. This is a prerequisite for shrinking labor supply and reducing demand. A problem whose solution, according to the authors, must be sought by the European Union. The creation of a pan-European labor market, with an appropriate internet infrastructure, would compensate for the negative trends. In this part of the continent, it is lagging behind in remote work options, and the concept of "brain drain", which is forcing many young, highly educated people to leave their country for better opportunities in another, is typical of the whole of Europe. The global labor market would help reverse this process. If this happens, skilled workers who can work remotely will increasingly choose to stay in their country, which will contribute to greater social equality across Europe, as location will no longer be decisive for pay.

Freelance work

There are more and more freelancers in Europe, with the number of so-called freelancers doubling from 2000 to 2014, according to the survey. Against this background, as a result of the coronavirus crisis, there is a 25% increase in demand for such positions only for the period April - June 2020, according to the report "Fast 50" by Freelancer, the largest online market for freelance and crowdsourcing, (outsourced services to online users) users and projects. This type of employees is the segment with the highest share of teleworkers, but their work is often accompanied by short-term contracts, a large number of clients and a lack of financial security.

It is expected that more and more people will work for several companies at the same time, because remote work allows it. However, tax systems and laws in many countries deprive this type of employee of many social and legal benefits, so countries will have to adapt to the growing number of such workers. The development of these work models can lead to the equalization of the benefits and rights of freelancers with those of employees on permanent employment contracts.

Pay

Now working for a foreign company remotely can receive a salary that meets the standards of the employer state. However, the development of remote work can allow employers to determine the salaries of their employees in different countries, according to the standard of living there. That's what Gitlab, one of the largest remote companies, is doing. However, the model has both supporters and opponents. On the one hand, this type of remuneration guarantees all employees performing the same role, the same standard of living. On the other hand, the argument that it is not fair for two employees providing the same service to receive different salaries is equally important.

The large-scale survey predicts that in 2030, 27% of the workforce in major European cities will be able to work fully remotely, which will affect both the labor market and migration. There are nine years left to see if this is the direction of humanity or a snapshot of the situation around the coronavirus crisis, but one thing is for sure - technology is driving humanity and the above trends sound very realistic.