Category / COVID-19

by Pusing Musing

The Future of Employment Post-COVID-19

COVID-19 has has forced many changes to daily life. But there is one word that is probably synonymous with COVID-19 as it emerges as COVID-19 spread, Zoom.

From an application that people hardly knew, the usage of Zoom has skyrocketed as people prefer to stay at home and need a way to communicate for work and social life.

Zoom is not the first video conferencing application in the market. We have BlueJeans, WebEx, Skype, GotoMeeting and other products. But Zoom is perhaps what most people know and use for collaboration.

Zoom is also the tool what many companies used (many for the first time) to enable their employees to work from home (WFH).

COVID-19 has forced the companies to do WFH, whether the companies were ready or not; and after few months many companies found that they could continue to function even with its employees WFH.

It is a revolution in the way office work works, but it is not new. Even before COVID-19, some companies have been practicing WFH. Automattic (the company behind WordPress), BaseCamp and GitLab, are few examples that have its workforces mostly WFH.

This will have a lot of impacts (and opportunities) on employment.

The effectiveness of WFH is still debated. Some companies like Automattic and Gitlab embraces it a big way and found no issue with productivity of its workforce. Twitter announced its employees could WFH as long as they would like. Other companies such as Netflix preferred to have its workforce to be in the office as it founds it could get more creative ideas from face-to-face collaboration.

With ‘forced experiment’ with WFH, companies start to realize that there is longer requirement for a space (or a big space) – called ‘office’ – to house its employee anymore. A significant cost could be saved by reducing office space or even eliminate it altogether.

However, the biggest impact is many companies now realize it could reduce the manpower cost.

Some companies, such as VMWare cuts the salary of professionals who are WFH from area outside the Silicon Valley area. It arguably fair to other professionals who choose to stay in Silicon Valley. Professionals who work in other states or area with lower cost of living as compared to the Silicon Valley should ideally have their salaries reflect the current local conditions.

However, the biggest impact is probably companies now realize it could also hire professionals from practically anywhere in the world and many countries have lower cost of living (which is translated to lower asking salary).

It is a boon for professionals from developing countries as they can market their talents to companies beyond what are available domestically. It potentially reduces unemployment in those countries and increase domestic economy.

However, it will be huge challenge for professionals from developed countries. Lowering their asking salary may not be a good option as the cost of living is significantly higher.

Productivity loss may be overcome by hiring more people. It is a rather crude solution. However, if hiring two or more offshore professionals in order to achieve similar productivity as one inshore professional and yet with lower cost for the former, then it is a rather simple math for companies.

Companies may also gain more by strategically hiring from different regions so that there is always a professional working in different time zones. A 24×7 operation is possible without incurring the extra cost to incentivise people to work at graveyard hours.

We may see the next wave of outsourcing and a rather different one.

Rather than outsourcing to other companies, companies may choose to outsource directly to individuals. It could get the best talents from various countries, with lower cost.

Companies may also exploit different law, favoring professionals from countries that have more lax employment protection or simply base its ‘physicals’ office in the country with lax employment protection and have all professionals (regardless their locations)hired by the companies to adhere to that country’s law.

Professionals, especially from developing countries, would have more opportunities. On the other hand, professionals from developed countries now run risk of losing jobs to other professionals from other countries.

As talent is now available globally, professionals would also need to compete globally. It is no longer sufficient to ‘shine’ locally; the professionals need shine globally.

For professionals from developed countries, with high cost of living, they also need to show they can provide more values with skills or capabilities that are difficult to get elsewhere, despite higher commanding salary.

It will be a different competitions, and probably a more intense one. There is less protection from local employment law in case there are disputes as companies could hire the professionals directly, bypassing local laws.

Rather than permanent jobs, employment would be more transient. Short-term contract may be a norm. This allows the companies to adjust its manpower requirements in short notice, for example when there is an economic downturn.

Professionals would have more options to choose from and could simply pick different companies. However, it also means there is less job security on employment.

Having transient workforce from various countries would also mean less bargaining power for employees. There is no collective bargaining power on the employee’s side as employees are scattered in different parts of the world.

Governments will also face issues. For developing countries, having its citizens to be employed by foreign countries would be a blessing. Rather than ‘exporting’ their population out, the professionals would remain in the country, contributing to local economy and indirectly growing other local talents.

However, if those countries do not have strong tax law, there is a possibility that its citizen would under-declare their incomes, resulted in less revenue from the income tax.

Similar issue with shrinking income tax would be even more visible for developed countries; the jobs went to other countries and its citizen faced downward pressure on the salary.

Countries would also face issue in attracting foreign investments. Typically such investments would require commitment from the companies to make certain amount of investment and commitment to hire local professionals. However, with ability to hire professionals from virtually anywhere, companies may be less keen to hire local professionals unless the country could provide more incentives.

It looks gloomy, however it is inevitable. WFH unintentionally forced companies to experiment with WFH and opened up other possibilities for the companies.

For professionals, especially for the next generation professionals, it will be a reality. Things will be different moving forward; each of us would compete globally. We should continuously develop ourselves, adaptable and build unique capabilities and values to remain relevant.

Image source: People vector created by pch.vector – www.freepik.com

by Pusing Musing

Singapore and COVID-19 Vaccine Nationalism

It has been 8 months since the first COVID-19 case was reported in Wuhan, China.  The pandemic has spread to the entire world, millions have been infected and many people have died.  The pandemic does not seem to be abated, with countries that previously managed to control the outbreak is now struggling to control the 2nd wave.

Current methods, such as social distancing, curfew, closing any social gathering place – while it helped to manage the outbreak – is not sustainable.  It comes with high cost to the economy.  Many companies are facing closure, employees are either being furlough or let go altogether.

Prevention, in the form of vaccine, is always better than the cure.  However, it usually takes many years to get an effective and safe vaccine.  Due to the urgency, the vaccine development has been sped up tremendously.

Assuming we have effective and safe vaccine, the next question is how to manufacture and distribute the vaccine.

Having the population vaccinated against COVID-19 will give the country in a better position to restart its economy.  People could do their normal activities without any restrictions. People can work and study with peace of mind.  Industries and Services can operate normally and start hiring people.  The government could stop all the subsidies given to its population during COVID-19. The benefits are very clear.

There are many companies that can produce vaccine.  However, their facilities are not geared towards producing massive number of vaccines in a very short period of time.  It will take time for them to ramp up the production to serve world.

As a result, there will be a shortage of vaccine. Coupled with expected benefits and domestic push, many countries will simply force vaccine manufacturer in their countries to produce vaccine for their own population first before exporting the vaccine to other countries.

Welcome to vaccine nationalism.

Problem with vaccine nationalism is real; it is naïve to think that countries should not advance its own domestic agenda first.  It is political suicide for a government to simply sends the vaccine away while its domestic populations are still affected by COVID-19.

The problem gets deeper.  Even if the population of the countries where the vaccine manufacturers are located are fully vaccinated, the next question is who’s next.  Countries with deep pocket will simply buy the vaccine, putting them ahead of the queue.

However, COVID-19 is a global problem.  Until the last person in the world is vaccinated, similar to what human managed to achieve with smallpox, COVID-19 will still be in circulation and infect people.

Perhaps this is what small countries like Singapore can offer. 

It can help by fully pay the cost of setting up high-capacity vaccine manufacturing and selling the vaccine at cost.  In return, it has first priority to the vaccines needed for its population.

As the country is small, with only 5+ million population, Singapore would produce lots of excess vaccine that can be sent to other countries, such as its ASEAN neighbors.

This sounds attractive but it may also sound too simplistic.  Building vaccine manufacturing facility will take time.  It requires specialized people to operate.  It may take time to get the facility to ramp up the production. Lastly, there are different vaccine candidates and each may have different ingredients.

However, where there is a will, there is a way.  Building a facility should not be difficult for Singapore.  It can divert contractors and people from other projects to build the facility. Specialized machines require to produce the vaccines could be procured now so that it arrives when the building is ready.

Staff from existing research facilities and laboratories can be tasked to operate the facility in the beginning until there are enough people trained to operate the facility. Biomedical science graduates from universities or people who are currently unemployed can be trained to operate the facility.

If necessary, Singapore may also allow skilled technicians from other countries to also operate the facility. This not only help to jumpstart the production but also to show to the world that Singapore’s facility is a global facility, manned by people from many countries, to produce the vaccine for the world.

There may be some teething issues during initial productions, so it is expected first few batches would go waster.  Perhaps, the new facility could produce other vaccines as the way to train the workers and test the production line.

Singapore may also take similar approach as other vaccine manufacturing by starting to stockpile all ingredients of few vaccines that look promising without waiting for final clearance for the vaccine.  The idea is to have all ingredients ready the moment green light is given.  However, it also a gamble because some vaccines that originally look promising may later on found to be ineffective.  It is a necessary gamble in order to speed up the vaccine production.

It may sound too ambitious, simplistic and perhaps crazy.  However, having Singapore to produce the vaccine for the world would show Singapore’s commitment to the world and also showing Singapore can punch above its weight.

by Pusing Musing

COVID-19 and Travel

This week my family and I are supposed to be having holiday in New Zealand; stretching our annual leaves by having holiday between 2 public holidays (Labour Day and Vesak Day).  It would be our penultimate holiday without following school holiday as next year our daughter will start her first year in primary school.

We also have plan to make another trip before end of the year, a long one, re-exploring Canada.  I even tried (but failed) to reserve for bus ticket to enter Lake Ohara, a beautiful lake deep inside Yoho National Park.  My wife and I visited the lake during our honeymoon, and we would like to visit the lake again, this time with our daughter. Some of spectacular photos of the Rockies I took were taken when we hiked around the lake.

Alas, because of COVID-19, our trip to New Zealand has not happened and our planned trip to Canada most likely will not happen either.

Until the world could address the COVID-19, either by finding effective medications, vaccine (which will take months to get one and additional months for mass vaccination, if countries could get hold the vaccine in the first place) or (ironically, when COVID-19 is spreading out-of-control) the community attained herd-immunity against COVID-19, travelling would not be the same.

In the attempt to limit the spread of the virus, various governments, including Canada and New Zealand, either imposed quarantine rule for visitors or returning citizens or closed the border altogether. Practically, we have multi-level lock-down, starting at household level, domestic travel and international levels.

Some countries, such as New Zealand, Germany have started to loosen up the lock-down, however the speed of easing up the lock-down vary from countries to countries and it does not immediately lead to opening up of the border. 

The quarantine rule for incoming passengers may still be apply.  There is always worry that lifting the lock-down too early and too fast may lead to another wave of COVID-19 which may be more devastating.  History taught us that the second wave of the 1918 Spanish flu (which ironically did not originate from Spain) claimed the most life.

Opening up the border may not immediately mean the return of travel as we had before COVID. The quarantine rule for incoming passengers may still be apply.  This would immediately disincentive any travels except for any essentials or emergencies. Nobody would like to spend 14 days upon arriving in a country, then spend one or two weeks for holiday, then spend another 14 days upon returning.

Scientists also learned that many people who contracted COVID-19 are asymptomatic, which means when the next wave of COVID-19 is detected in the population, the health system would be immediately behind the curve and another round of lock-down needs to be imposed in order to prevent further spread.

Travelling could not be planned well in advance anymore.  Air ticket, hotel could not be booked and paid in advance because there is no guarantee that the destination country remain opens when at the time of the travel.

Worse, if the lock down happened while inside the country.  The prospect to get extended holiday because the country is locked-down is simply unpalatable.

Some countries may impose mandatory health check for all visitors. It may take hours just to wait for the result.  Antibody tests may give result in minutes, but it may give false positives; the best result is from PCR test but it takes more time to complete. Those hours are spent waiting anxiously in the arrival area of the airport which is never known to provide good amenities in contrast to the departure area. 

A clean bill of health does not mean people are out of the wood; if there were one passenger seated tested positive for COVID-19, other passengers seated that passengers may also be quarantined. Travelling is suddenly involving so many uncertainties.

The worst part is when the test showed a positive result.  The question is, who will pay the cost of the hospitalization.  The local government may not want to foot the bills for non-residents.  Travel insurance industry, facing the prospect of high bill for COVID-19-related costs, may exclude COVID-19 from the coverage or impose high premium for the coverage. 

Airlines and countries may demand each passenger to have certificate that proofs him free from COVID-19.  The certificate may allow the passenger to bypass any health and quarantine check at destination country.  However, not many countries provide walk-in test for COVID-19; the tests are mostly reserved for people who have showed symptoms or for people who happened to be in close-contact with patient tested positive for COVID-19.   

Certification meant the person is free from COVID-19 at the time of the test. As the person may contract COVID-19 after the test, the validity of the certificate could not be too long. When the person (holding the certificate) is taking the flight back home, his certificate may no longer valid.

Lacking of certificate, the person may need to get test from local health system.  Local government may not be too kind for visitors as they need to prioritize local residents, imposing high cost for such test. There is also a certain level of uncertainties, if the test showed positive, the trip home is no longer possible and the person would need to spend additional days in hospital.

The flight itself would be different.

Planes are not designed for social distancing in-mind. Faced with requirements for social distancing, airlines need to separate the passengers by having empty seats between them.  However, there has not been any consensus on how far the distance is; the problem is the distance has major impact to airlines and passengers.

The easy solution is to have one empty seat between passengers.  In a standard economy class of the Airbus 350 (with 9 abreast seats) means a load reduction of 33%. Passengers may have to fork out the same extra percentage for the airfare.  However, if local authority insists for bigger gap, such as a 1-meter gap, there could be only 3 passengers for every 3 rows of standard Airbus 350; a reduction of almost 90% of loads.  This arrangement would make air ticket out-of-reach for many people; less people would be able to travel, less income for airlines.

Budget airlines, such as Air-Asia group, FR, WN, would also face additional pressure. Those airlines depend on quick turn-around so that it could maximize their fleet by having as many flights as possible in a day. However, with the requirements to disinfectant the cabin before flight, it is no longer possible to do a 25-minute turn-around.  More time is also needed for passengers to embark and disembark, such as by ensuring passengers seated at the back do no pass passengers seated at the front. Planes need to sit longer on the tarmac, which means less flights which is translated to higher cost.

For airlines that depend heavily on transit passengers and without domestic market such as SQ, EK and QR, border closure created another set of problem. Those airlines have no domestic market; even though the countries (where those airlines are based) are rich, they have small population which means a limited market for O&D (Origin and Destination). Those airlines instead depend heavily on picking up passengers from many countries to their hubs (such as SIN for SQ) and flying them to their destinations out of their hubs.

With countries closing its border, practically there is no market for those airlines to fly to.  When countries start to open up its border, it may not be immediately beneficial to SQ, QR or EK as each country opens its border at different time and may be in the wrong side of its network.

For example, the famous Kangaroo route would not make sense if only Australia and New Zealand opens its borders.  SQ, QR and EK need countries Australian likely to visit like the UK or North Asia countries to also open up its borders. 

For SQ, even if many countries in SQ’s network open up its borders, SQ may not be able to exploit it due to the situation in its hub, SIN.  Until Singapore showed it could control COVID-19 situation, many countries may ban travel or transiting via Singapore, which in effect banning SQ from carrying passengers from their countries.

Controlling the spread of COVID-19 may allow Singapore to establish open border with other countries that are also able to control COVID-19, similar to proposed travel-bubble between Australia and New Zealand. Such open border would allow free travel, potentially without the need for quarantine control.

The time when SIN opens for transit passengers is also important.  If other hubs like DOH and DXB open up earlier than SIN, those hubs would simply siphon away the limited number of passengers away from SQ and SIN.

Airlines are in difficult position. It needs passengers, but it could not easily stimulate demands by lowering the fare because doing so would simply suicidal – even with government’s support – as the fare would not cover the cost. And this still with assumptions that people are still flying and there is a relaxation of border and quarantine control.  With economy grinds to halt due to lock-down, many people are out-of-job or have less incomes.  People and business would prioritize what essentials for them; travelling, either for leisure or business, would be lower in the priority list.

With less passengers, airlines would become smaller. Airlines will need to reduce frequency, close or suspend some routes and reduce its fleets and manpower. Many airlines would not survive with consolidations, government-support [] and bankruptcy would become common. 

It is clearly difficult time for airlines, airports and passengers.  For passengers who have their flights disrupted, many airlines offered credits rather than reimbursements.  Airlines need to preserve the cash; and offering credits is the way to preserve the cash.  However, it means passengers (including me) now become creditors to airlines. The credits may worth zero either due to time-limit or the airlines is totally gone under. Best outcome would be to utilise the credits after the whole COVID-19 is over but perhaps with less value as the ticket fare may increase due to social-distracting requirement.

It is heart-wrenching to me (who have strong interest in aviation industry) to see so many planes parked in the airports through out the world.  No doubt we, as human, could overcome COVID-19 but it will take years and during and after that period, the aviation industry would be different.

As for my family’s holiday; I don’t think we can fly to New Zealand, soon.  With so much uncertainties, staying put perhaps the best options.