Employability in the Post-COVID Labor Market in Greece

Abstract

The outburst of COVID-19 pandemic crisis and its catalytic impact on health systems across the globe, has affected all socio-economic activities. The measures implemented for public safety since 2020 had severe consequences on employment, particularly in industries and occupations relying on the physical proximity among employees and customers. At the same time, the need to overcome physical reliance has strongly enhanced digitalization processes and practices at work and affected employment, production and consumption, transports, and communications. As work is shifting from the office or the shop to the expanded digital space, via platforms and cloud computing, the content and organization of work is accordingly changing (crowd sourcing, gig work), as is the status of the employee (sub-contractor, self-employed). With reference to Greece, as indicative case-study of Western Balkans and South East Europe, this paper explores the impact of the pandemic crisis on a digitally lagging labor market. The Greek economy is ranking very low in digital competitiveness (26th in EU28, 2019) and scores below the EU average in the integration of digital technology by business and human capital. In such economies, pandemic-induced digitalization is expected to have a higher impact on employment and employability. Drawing upon primary research data (retrieved via original questionnaire answered by 280 participants), we particularly focused on the highly qualified respondents, to explore whether retaining or losing their job is associated to the sector/industry and nature of their occupation (physical or digital) and their employment status (permanent or flexible). The results illustrate the division between occupations of physical and non-physical reliance, in terms of job losses; as well as, the generalized deterioration of employment conditions, even in digitally operating occupations.

1 Introduction

Since 2020, the COVID-19 pandemic has evoked an unprecedented labor market shock and unemployment crisis. In EU27, 23% of total employment—nearly 45 million jobs—are in very high risk of disruption; and 22% of the workforce, mostly in medium- to lower-skilled service provision, is exposed to the risk of unemployment. The risk is disproportionate for the most vulnerable workforce groups: older employees, the lower-educated, those working longer hours, women, migrants etc. As existing trends in remote work, e-commerce and automation accelerated, 25% more workers than previously estimated may need to switch occupations (McKinsey Global Institute 2021).

Before the outburst of the pandemic, large work disruptions were already taking place as a consequence of technological change towards digitalization and high-level automation. Work has largely shifted from the office to the expanded digital workplace, via platforms and cloud computing services. The content and organization of work has accordingly changed (crowd sourcing, remote work), as has the role of the employee (routine micro-tasking, gig work) and employment relations (sub-contracting, self-employment).

COVID-19 has accelerated the expansion of digital work and at the same time, has exacerbated pre-existing labor market trends towards flexible employment. The new forms of work are rather breaking up, than accommodating existing standard employment relations; such changes have negative outcomes for workers, i.e. increase in precarious employment etc. (Woodcock and Graham 2020). As digital work is fast spreading into new and diverse occupational areas—i.e., health services, teaching, legal services, various manufacturing and maintenance tasks etc.,—emerging qualitative changes are transforming occupational structures (Huws et al. 2018).

Yet, the novel issue elevated by COVID-19 is the importance of the physical dimension of work. According to McKinsey Global Institute Report (2021), the overall physical proximity adds a different aspect to traditional views of work and forms a new taxonomy of various work arenas. For example, medical caregiving arena includes close interaction of personnel with patients; hospital and medical office administrative staff fall into the computer-based office work arena, where more work can be done remotely; lab technicians and pharmacists work in the indoor production work arena because their jobs require use of specialized equipment on-site but have little exposure to other people (McKinsey Global Institute 2021).

In summary, the emergent new view of work differentiates the traditional definitions of sectors and occupations. The research presented in this paper takes into account the level of both physical and digital intensity of work across sectors and jobs, in order to justify the changes in employment and employability taking place in the post-pandemic labor market. The impact of COVID-19 has been unequal on different economic sectors and occupations—defined by their capacity to operate remotely ICT-based work and interact online with customers and collaborators. We suggest that employment gains and losses are significantly defined by the degree of digital efficiency and maturity of the overall economic activity.

In the following sections we provide an outline of the post-pandemic changes and challenges in the Greek labor market. First, the research context is described for Greece—with reference to the broader geo-economic region of Western Balkans, South East Europe and the EU—in terms of digitalization and employability before and after the pandemic. The deviation from the average performance of EU member states during COVID-19—in terms of employment, flexible employment and unemployment for the young and particularly, for the highly qualified—frames the main research question and research hypotheses of our study.

Next, we elaborate on the research methodology and tools in order to justify the adoption of certain assumptions and parameters for the fieldwork and primary data analysis. The feedback provided by 286 respondents forms our conclusions and discussion in the final section. Findings established that due to COVID-19 social distance safety measures, job losses are higher in sectors and occupations requiring physical proximity with customers and collaborators, than in those operating digitally. Yet, COVID-induced digitalization has deteriorated employment in digitally operating sectors as well. The depreciation of the most qualified and skilled, particularly in the more productive ages, suggests the digital hysteresis of industry and human capital in the Greek economy.

2 Research Context and Questions

The impact of digitalization on economic growth has been broadly established as positive, according to the bulk of related research. However, variations depend on the level of economic development in a country, or a region. Digital efficiency and integration require significant investments in ICT, but this process was gravely affected by the global economic downturn in 2008. Greece was gravely hit by recession and is still lagging behind, along with the Western Balkan countries. Digital hysteresis is depicted in broadband connectivity, digitalization of industry, regional startups connection and network with major European hubs, digital traineeship to students and young people, cyber-security and so on (European Commission 2018). Greece, as one of the thirteen economies of South East Europe, has adopted the SEE2030 Strategy (SEECP Summit in 2021) to deal with such deficiencies.

As a result of COVID-19 crisis, the region of South East Europe suffered GDP decrease by 5.7%; average unemployment rate was 11% in 2020, with youth unemployment reaching 22.5%; in a population of 150 million, 12.5% of people live below mid-high income economy poverty line. At the start of 2022, there were 8.50 million internet users in Greece and the internet penetration rate was 82.2% of the total population. KEPIOS¹ analysis indicates that internet users increased by 3.5% between 2021 and 2022. These figures reveal that 1.84 million people did not use the internet—i.e., 17.8% of the population remained offline. The 7.40 million social media users in Greece at the start of 2022 were equivalent to 71.5% of the total population, but social media users may not represent unique individuals. According to KEPIOS analysis, social media users remained unchanged between 2021 and 2022. Data from GSMA² Intelligence shows that there were 14.92 million cellular mobile connections in Greece at the start of 2022. However, many people make use of more than one mobile connection (e.g., for personal use and for work). The numbers indicate that mobile connections were equivalent to 144.3% of the total population, as mobile connections increased by +0.4% between 2021 and 2022. (https://datareportal.com/reports/digital-2022-greece).

According to the Digital Economy and Society Index (DESI 2020), Greece before the pandemic scored well below the EU average in digital competitiveness (26th in EU28), as well as in the integration of digital technology by business and human capital (Fig. 1). The acceleration of digital transition was expected to boost Greece’s GDP by 4% and create more than 50,000 high-value jobs by 2021 (SEV—Hellenic Federation of Enterprises 2021). But the COVID-19 crisis drastically altered this process: in EU27, Greece had the lowest employment rate in 2020Q3 and shared with Italy the lowest score in 2021Q3 as well. In the same period, Greece’s unemployment rates are the highest in EU27 and nearly double the EU27 average (Figs. 2 and 3).

Fig. 1

DESI 2020-relative performance by dimension

Fig. 2

Source Eurostat, LFS (Quarterly updated charts, March 2022)

Employment rate (20–64) EU, euro area and member states, 2021Q3.

Fig. 3

Source Eurostat, series on unemployment [une_rt_m]. Data seasonally adjusted

Unemployment rates—EU, euro area and EU member states.

It should be also stressed that the rebound of the European economy was confirmed in 2021Q3 and was clearly visible in the development of employment and the recovery of the labor market, in comparison with the pre-COVID-19 situation. In 2021Q3, 18 out of the 27 EU member states had restored their employment rates at a level higher or equal to that of pre-COVID (in 2019Q4). However, almost half of the EU young employees (aged 15–24 years old) worked on temporary contract in 2021Q3.

In Greece, the unemployment rate (as percentage of the labor force) in 2021Q3 is 9% and the rate of long-term unemployment is 5.6%. It is worth stressing that young people, aged 15–24 years old, account for 31.4% of the unemployed; while those neither in employment nor in education and training account for 16% (Eurostat, LFS—Data for January 2022). When focusing on Greece’s highly qualified labor force (aged 20–64), the unemployment rate during the COVID-19 crisis for tertiary education graduates (level 5–8) has been the highest in EU27—reaching 10% in 2021Q4 (with EU27 average at 4.2%) (Eurostat-Values for 2019Q4 and 2021Q4).

We also acknowledge the threatening aspects, exacerbated by the COVID-19 pandemic, of the emerging forms of digital work in the gig economy of flexible and precarious employment. As shown in Fig. 4, an employment loss is recorded from the second quarter of 2020 until the first quarter of 2021 and is mainly due to a strong decrease in the number of temporary employees. According to Eurofound (2021), on the EU27 scale, the number of temporary contracts fell by 17% between the spring of 2019 and 2020, accounting for well over three-quarters of the decline in aggregate EU employment. The number of permanent employees is also decreasing—1.533 million in the first quarter of 2021 in comparison with the same quarter of the previous year. For the same period, self-employment recorded a decline of 1.655 million people after a year (2019) of relative stability. Promising evidence for the overall employment recovery comes from 2021 Q2 and Q3 data, although the establishment of the temporary contracts (that seem to be activated by the pandemic crisis) is a matter of further consideration.

Fig. 4

Source Eurostat, LFS—Quarterly updated charts, March 2022

Permanent, temporary and self-employment—EU.

In this context, our study seeks to illuminate key-aspects of the Greek labor market’s disruption since the outburst of COVID-19 pandemic. The impact of COVID-19 has been twofold: first, on the public health level and then, on the level of economic and labor market restructuring by digital reinforcement across sectors and occupations. Our main research question is how the COVID-19 pandemic has affected the Greek labor market. With particular focus on the employability of the young and highly qualified labor surplus, we seek to provide explanation for its inability to recover. Evidence will be sought in: (i) the level of digital efficiency in industries and occupations, and (ii) the changes taking place in employment status and relations.

3 Research Methodology

COVID-19 is expected to bring about structural adjustment and protracted disruption in industries and occupations, in a scale even bigger than the recession of the 2008 global financial crisis. The pandemic had an unequal impact on different economic sectors and occupations, strongly defined by their reliance on physical proximity with customers, or by their efficiency to operate via remote meetings, ICT-based collaboration and online customer interaction. Consequently, individual skills and job factors are most likely to be impacted by the pandemic and accelerated digitalization.

A recent analysis published in McKinsey Report on the future of work after COVID-19 (2021), reveals that workers providing care, sales or other personal services, as well as hospitality and retail managers, health workers and food preparation helpers, have a very high COVID-risk score. Additionally to these high-risk occupations, there are significant subset of occupations facing moderate-to-high risk, as well; most of these rely on the provision of medium to lower-skilled labour services such as: drivers and vehicle operators, cleaners and helpers, protection workers, street service workers, as well as those in construction and agricultural occupations. In contrast, jobs that involve less physical proximity and contact with others and a higher reliance on digital tools and technologies—such as office workers, clerks (not in customer service), scientists, engineers and ICT workers—are less susceptible to the social distancing impact of COVID-19 (Fig. 5).

Fig. 5

Source www.mckinsey.com/featured-insights/future-of-work/the-future-of-work-after-covid-19

Overall-physical-proximity score (out of 100) by work arena (based on human interaction and work-environment metrics).

In this vein, an analysis based on CEDEFOP’s European Skills and Jobs Survey (ESJS) provides a similar occupational classification according to (Table 1). Our research takes into account the level of physical and digital intensity of work across sectors and jobs. Occupations are grouped into work arenas according to: (i) the degree to which they involve physical contact and proximity to others; and (ii) the degree to which they involve a high digital skill intensity level.

Table 1 COVID-19 risk score by industry, EU-27 and UK

We conducted a cross-sectional study and developed a fieldwork to acquire information from highly qualified respondents (ISCED levels 5 to 8) about their employment status. According to the e-survey ‘Living, working and COVID-19’ (Eurofound 2020), young people were most significantly impacted by reductions in employment levels, mirroring the experience of the last recession, which led to serious longer-term challenges for younger people in accessing the labour market. Greece, according to the annual report of the Hellenic Authority for Higher Education, is in the last positions of the OECD countries both in the employment of higher education graduates aged 25–64 (76%) and young graduates aged 25–34 (73%) (levels 5–8), 12% points away from the OECD average.³

The questionnaire was distributed during the last quarter of 2021. Specifically we recruited participants from September 2021 to December 2021. We addressed a sample of employed and un/under-employed participants. Primary data were collected with the use of structured questionnaire in printed form, and provided 250+ valid responses. The instructions defined ‘underemployment’ as occcasional employment and a person who, in spite of being employed, lacks a sufficient volume of work, (without having alternative employment option) and/or is still seeking for a better position.

4 Empirical Analysis and Results

To conduct the statistical analysis we used the IBM Statistical Package for the Social Sciences (SPSS) (Version 27.0.1) for Windows. We calculated frequencies and percentages to present the descriptive characteristics of the sample. The employment changes were compared to (a) demographic characteristics (b) workplace of previous/current job, (c) sector of occupation (taking into account the level of physical and digital intensity of work across sectors and jobs as described above) and (d) employment contract, using t-tests, chi-square tests, and Fisher’s tests, as appropriate. Statistical significance was set at 0.05.

With reference to the research sample a total of 286 participants were eligible. 50.2% (n = 143) of the respondents were men and 49.8% (n = 142) were women. The vast majority (72.2%, n = 205) of the respondents were higher education graduates under 35 years old. More than half of them (50.36, n = 138) supported financially their family and almost 4 out of 10 (39.78 n = 109) were dependent on their family’s financial support. Referring to their employment status 30.1% (n = 86) of the respondents were unemployed, 36% (n = 103) were underemployed (seeking a better job) and just one third of them (33.9% n = 97) were in permanent employment. Τhe sample reported higher rates of unemployment than the Eurostat official data for the target group in the specific period—A fact that can be explained due to the low age average of the research sample (Eurostat metrics for unemploymnet in Greece, register 10% of umemployment for highly qualified labor force aged 20–64).

Among the employed or recently employed 85.80% (n = 241) occupied in physical workplace environment, just 14.20% (n = 40) occupied in digital workspace environments (remote work or digital platform work). As the vaccination rate during the last trimester of 2021 was increased, most lockdown measures were abolished and individuals occupied in low digital intensive occupations, returned to the physical workplace environment.

Furthermore, the sample indicates employment in sectors requiring a high level of physical intensity. Specifically, almost one third of the sample (32.2% n = 92) of the respondents is/was employed in digitally operating occupations; while 67.8% (n = 194) is/was employed in occupations reliant on physical proximity.

Concerning the employment status, 46.5% of the respondents are/were occupied in contract-to-permanent jobs and 45.42% on-standard employment jobs, including temporary contracted employment and part-time jobs. Respecting job position of previous/current job 47.83% of the respondents are/were in positions of general (not skilled—relying) tasks, although highly qualified (Table 2).

Table 2 Research sample description

4.1 COVID-19 Implications on Employment

For those who were employed during the pandemic, 40.3% maintained their job intact; however, there were substantial percentages who changed their employment status: 30.2% remained employed but in different working conditions (remotely, reduced working time and payment) and 26.2% were out of employment (lost their job or cannot find one) due to COVID-19 consequences (Table 3).

Table 3 Change of employment status

The sample engages with the broader empirical literature (Wong et al. 2022; Gezici and Ozay 2020) testing the discrimination theories based on the gap in gender and age as 6 out of 10 who lost their job were women and 80.6% were under 35 years of age. The argumentation about new digital job opportunities does not seem to be confirmed in our research as only 3.2% of the sample found work in digital occupation/platform which follows the country’s digital hysteresis.

4.2 Employment Change and the Workplace

One of the major issues on the impact of COVID-19 on the labor force is the dramatic increase in remote employment. For exploring the employment changes for those who could or had to work at home, we examined the relationships between workplace and employment status (comparing the categories indicating job changes flexible contract, reduced time/wages and job loses with physical versus digital workplace) using χ² and Fisher’s exact tests; (χ² = 3.791, p > 0.05, F-test > 0.05) (Table 4).

Table 4 Impact of the workplace on employment status

Our data showed that the pandemic effects on employment status were not related to respondents’ workplace environment. This can be attributed to the fact that our research was conducted during Q4 2021 when most lockdown measures were abolished.

4.3 Employment Change and the Sector of Occupation

As mentioned above, employment changes during the pandemic came in economic sectors with large shares of high physical proximity workers e.g., accommodation and food services, health care and social assistance, retail trade, arts, entertainment and recreation, and educational services.

Descriptive data showed that; 44.9% of those occupied in sectors relying on digital proximity kept their job intact; 28.1% kept their jobs but in different terms; 27% lost their job/did not find a new one. From those occupied in sectors of physical reliance, 38.1% kept their job intact 31.2% kept their jobs but in different terms; 25.9% lost their job and 4.8% found a new job (Table 5).

Table 5 Sector of occupation on employment status

Even though jobs in work arenas with higher levels of physical proximity are likely to see greater transformation after the pandemic, we noted no significant difference between the changes in employment status (keep job intact, keep job in different conditions or job loss) and the sector of occupation (digital efficient and mature sectors or physical proximity reliance sectors) (χ² = 0.770, p > 0.05).

4.4 Employment Change and Employment Contract

In the wake of Greece’s pandemic outburst dramatic, unpresented and previously untested employment changes arose. In Greece, as elsewhere, changes in contractual obligations and employment agreements included clauses such as wages deductions, business interruption clauses and lawful suspension clauses were imposed form as a national state emergency.

Our data showed that there is a statistically significant relation between employment terms and change of employment status (Chi squared 49.86; df. 4; sig. 0.001 * excluded variable: “found a new job”). Specifiacally, 58.6% of those with permanent/ full-time employment contacts kept their job intact; the percentage for the self-employed is slightly lower (54.5%). From those in temporary employment (in absolute numbers almost equal to permanent contacts) 41.7% lost their job or cannot find one; 33.9% kept their job under different terms; and just 19.7% kept their job intact. A remarkable 41.7% of those who lost their job was enganged in temporary employment contracts. Confirming the findings of a study released by Eurofound and the European Union Joint Research Centre (Eurofound 2021), we argue that employees on temporary contracts were the most affected by job losses and job changes during COVID (Fig. 6).

Fig. 6

Employment status and job gains/losses

5 Conclusions and Discussion

COVID 19 crisis has generated many challenges in the labor market. Before the outburst of the pandemic, large work disruptions were already taking place as a consequence of technological change towards digitalization and high-level automation. However the Greek economy was not affected from these changes due to digital hysteresis of the industry and human capital. The businesses lockdown mandated by the state, for the first time in March 2020 and for the second in November 2020 on a nationwide scale, created through an unprecedented economic dualism. Among classic taxonomies for enteprices and organizations (small and medium-sized enterprises, export or non export, innovative or non innovative, between primary, secondary and tertiary sector enterprises etc.) another dimension was added, which divided companies: physical proximity.

In our research on the relationship between changes of employees occupied in work arenas with different levels of digital integration and physical proximity reliance, we noted no significant differences. As indicated, COVID-induced digitalization has deteriorated the employment status and conditions equally in digitally operating as well as in physically relying sectors. As just a part of the labor force returned to their physical workplace, the discourse for the future of work is transposed in terms of remote job efficiency and the shift to hybrid working models in the post-COVID era. It includes debates on the evolution of the workplace context (physical, digital, hybrid) and the consequent employment policies and management strategies.

Likewise, as the economy retracted during COVID-19-related shutdowns, someone would expect highly qualified employees not to be affected by unemployment. However, in our sample, more that half of the respondents faced the deterioration in twork conditions, lost their jobs or had to seek for a new job. In fact, unemployment for qualified young people is not a pandemic snapshot in Greece. It has become a persistent situation as no structural changes in the country’s economy can promise a better future. Several studies predict that around one-tenth of the workforce is in occupations that are likely to grow as a percentage of the workforce. Around one-fifth is in occupations that will likely shrink (estimation which is even lower in recent studies of automation). This means that roughly seven in ten people are currently in jobs where the future is hard to predict. However, findings about skills suggest that occupation redesign coupled with workforce retraining could promote growth in these occupations.

As the number of permanent employees acoording to the official data is also decreasing; the establishment of the temporary contracts (that seem to have been activated by the pandemic crisis) is a matter of further consideration. Our data showed a significant relation between employment terms and changes in employment status. Young people are facing a dramatic change in working conditions (for example zero hours contracts, low wages, lack of progression opportunities, dissatisfaction with current employment, or varying hours) and many scholars underline the need for policy measures that could protect and encourage engagement with practices for a more stable labor market and more inclusive societies.

Finally, it is necessary to underline several limitations of our research. First, the focus has been on highly educated employees younger than 35 years of age; thus, older and longtime employed respondents were excluded from our sample. Second, the period our research was carried out right after the abolishment of COVID-19 restrictions. Moreover, a significant dimension of analysis for future research is the level of digital integration of the Greek economy across sectors and occupations as well as the risk of employment precariousness and deterioration that digitalization may cause.