Psychological Flexibility and the Challenges of the Covid Labour Market

Sep 1, 2021

“Losing your job, social isolation, or a major health crisis are each distressing events.  Their combination made 2020 a Covid-19 blur.  Psychological flexibility and a solid sense of self were never more important than in the past 12 months, as pandemic and public policy wreaked havoc on the Australian labour market. 

Unemployment soared to a 20 year high of 7.5% in July 2020.  Just over 805,000 people remained out of work in February 2021, when the unemployment rate was 5.8%.  Underemployment climbed to 8.5%, up 0.4 from January 2021.[1] If not winners and losers, Covid-19 yielded contradictory experiences.

Pilots retrained as quarantine officers.  Travel agents were wiped out.  Hospitality workers had no-one to serve; gourmet chefs prepared takeaways and packaged alcohol sales boomed.  Distillers made hand sanitiser.  Mask manufacturing was a national priority alongside vaccine creation.  Insolvency, insurance, and employment lawyers had bumper periods.  Live entertainers switched to pay-per-view online in search of a dollar.  Demand for IT soared.  Professors upped their teaching and marking loads as thousands of casual academics were simply let go.  Hundreds of thousands lost their jobs across all sectors, yet orchardists still face labour shortages.

If you worked in 2020, it was likely from home, as ‘zoom’ became a verb.  Supermarket, food delivery and transport workers were among the most visible exceptions to the work-from-home rule, but they weren’t alone.  Teachers returned to the workplace earlier than most.  Doctors, nurses and their fellow health and aged-care professionals stood their posts throughout the year and many, especially in Victoria, witnessed the human tragedy of Covid-19 up close.

The new mantras were to be ‘agile’ and ‘pivot’.  If only the labour market was that simple.


Matching Markets

Finding work is a competitive matching process and no match is perfect.  Individual skills, experience and interests need to sufficiently overlap with the job requirements at the right time and place.  Both workers and those hiring must choose the other, price—the wage, salary or contracted fee—is not the only determinant of outcomes in a matching market.[2]  Mismatches are inevitable due to imperfect information; ahead of time, no one ever truly knows the shirkers and the shonks on either side of the bargain.  Wage subsidies and hiring credits complicate staff retention and selection, as governments fiddle with the relative cost of workers.

Larger and more heterogeneous pools of job applicants can swamp human resources departments in times of higher unemployment.  Comparing wildly different résumés is challenging.  Decades of experience is rendered irrelevant in an instant by recruiters relying upon heuristics or algorithms to thin the pool to a select few interviewees.  Companies seek good matches with the talented and loyal, arguably in lieu of outstanding candidates perceived as a flight risk.


Work and Identity

The economic effects of the global Covid-19 pandemic reflect accumulated individual and collective choices but seem as capricious as the disease itself.  Economic uncertainty threatens one’s sense of self, especially when identity is strongly tied to our trade, profession or vocation.  Answering the customary question, ‘What do you do?’ sends a message to ourselves as well as our interlocutor.

Explanations of ‘what we do’ carry conscious and unconscious assumptions, beliefs and illusions about ourselves and the organisations we work for and within.  Understanding our values as an individual, a family member and as part of our community helps to avoid entrapment in a mindset akin to a self-created ‘psychic prison’, where ways of seeing also create ways of not seeing alternative views of the world.[3] We can become trapped in ‘unsatisfactory modes of existence’ within ourselves and our organisations.[4]

Change came rapidly in the Covid-19 labour market and meant unemployment, new jobs, or new roles for many.[5] Yet old beliefs and assumptions about who we are, based upon what we did, pre-Covid, often linger like old source code in our mental operating system, holding us back from embracing change, even though the organisation has moved on without us.


Psychological Flexibility

Liberating and energising for some, at worst, unemployment is quite simply demeaning.  Overcoming the stigma of unemployment or reassignment requires the psychological flexibility to consider new futures and look beyond the immediate setbacks.[6]  Such flexibility best comes from a clear sense of our core values, for expansive visions of who we are, and who we wish to become, can rapidly narrow.  The world shrinks as the search for work intensifies in negative correlation to financial resources at hand.  Job hunting becomes a ‘live fire exercise’ in theatre sports, imagining oneself in a new role every day to summon the right form of words for today’s application.  We may struggle to remain true to ourselves while going through the performative act of declaring our passion, drive and eagerness to serve new corporate masters.

Last year an instructor, yesterday an analyst, today a journalist, and tomorrow a copywriter.  Processing one vision of the future after another, each increasingly distant from our pre-Covid role, demands a robust constitution; for insincerity stands out and the unwritten, unspoken words of each application are sobering:

  • “Early-50s, former career man, father of three, seeking casual hours as ‘team member’ to keep up with the mortgage and the school fees, as wife also seeks more work, so we don’t lose it all.”
  • “Female, early-30s go-getter, asks you to overlook the biological clock and remember I’m cheaper than the next candidate thanks to JobMaker.”
  • “Male, late-40s, well-educated contractor, seeks stable employment and promises not to immediately shoot through when the financial services sector picks up.”



The lost earning potential of any period of unemployment or underemployment may never be recouped.  Immediate cognitive costs of job search can also be high.  Psychologists and neuroscientists have explored the costs of task-switching.[7]  In controlled experiments, subjects are typically slower and make more mistakes when switching between complex tasks, relative to repetition of the same task.  Some empirical studies of multi-tasking have yielded similar results.[8]  Although economic logic suggests the benefits must outweigh the costs for multi-tasking to happen at all,[9] cognitive resources are depleted as we switch attention between competing issues, considerations and activities.  A similar toll is levied as we search for new opportunities and rapidly jump from one job application to the next.  Imagining oneself in a succession of new roles is draining.  A cognitive fog can descend upon the weary job seeker.


Action, Acceptance and Commitment

Who are you when you face a crisis?  What do you need to do today, to get to where you want to be in a year from now?  Don’t wait until you ‘feel good’ to be the person, family member, friend, community member and professional you want to be.  Accept that matching markets are imperfect, recruiters are time poor and often risk averse.  Labour markets are messy and good matches take time.  Be aware of the cognitive costs of extended job search and ensure you devote time to the activities which replenish your psychological reserves.

Understanding your values, and how they are developed and tested by every facet of life is critical.  Your professional identity is only one part of who you are.  The psychological flexibility needed to adapt and compete in the Covid-era labour market comes from the solid foundation of deeply knowing yourself and what you stand for in every one of the roles in your life.  Looking back 20 years hence, how will you remember yourself during Covid-19?  ACT curious today, keep learning, growing and forging ahead in your valued direction to improve your Psychological Flexibility.


CONTACT US FOR Psychological Flexibility

📞       0438 922 979 (Australia Wide)

         hello@actcurious.com


Robert D. Macdonald, consultant, writer and researcher with two decades of undergraduate and postgraduate labour relations and governance teaching experience; Michelle Trudgen, Director, ACT Curious.


The content of this blog is not intended to be a substitute for professional medical advice, diagnosis or treatment.


© Robert D. Macdonald & Michelle Trudgen, ACT Curious EAP Pty Ltd, 2021.

[1] According to the Australian Bureau of Statistics (ABS) seasonally adjusted data, 805,200 people remained unemployed in February 2021.  See ABS (2021). Labour Force, Australia, February 2021.

[2] On the nature of matching markets, see Alvin E. Roth (2015). Who Gets What – and Why: The Hidden World of Matchmaking and Market Design, William Collins: London.

[3] Gareth Morgan (1986). Images of Organization, Sage: Newbury Park, CA.

[4] Morgan (1986), p. 228; generally see Chapter 7: ‘Exploring Plato’s Cave. Organizations as Psychic Prisons’.

[5] See, e.g., David L. Blustein, Ryan Duffy, Joaquim A. Ferreira, et al. (2020). Unemployment in the time of COVID-19: A research agenda. Journal of Vocational Behavior, 119; Jeff Borland & Andrew Charlton (2020). The Australian labour market and the early impact of COVID‐19: An assessment. Australian Economic Review, 53(3), 297–324; Muhammad Aziz Rahman, Nazmul Hoque, Sheikh M. Alif, et al. (2020). Factors associated with psychological distress, fear and coping strategies during the COVID-19 pandemic in Australia. Globalization and Health, 16(95); Jenna M. Wilson, Jerin Lee, Holly N. Fitzgerald, et al. (2020). Job insecurity and financial concern during the COVID-19 pandemic are associated with worse mental health. Journal of Occupational and Environmental Medicine, 62(9), 686-691.

[6]See, e.g., Todd B. Kashdan & Jonathan Rottenberg (2010). Psychological flexibility as a fundamental aspect of health. Clinical Psychology Review, 30(7), 865-878; Andrew T. Gloster, Demetris Lamnisos, Jelena Lubenko, et al. (2020). Impact of COVID-19 pandemic on mental health: An international study. PLoS ONE, 15(12), e0244809; Giovambattista Presti, Louise McHugh, Andrew Gloster, et al. (2020). The Dynamics of Fear at the Time of COVID-19: A Contextual Behavioral Science Perspective. Clinical Neuropsychiatry, 17 (2), 65-71.

[7] See, e.g., American Psychological Association (2006, March 20). Multitasking: Switching costs; D. W. Schneider & G. D. Logan (2009). Task switching. In L. R. Squire (ed.), Encyclopedia of Neuroscience, Academic Press: Cambridge, MA, 869–874.

[8]For a review of literature concerning healthcare, human-computer interaction, and driver distraction, see Heather E. Douglas, Magdalena Z. Raban, Scott R. Walter & Johanna I. Westbrook (2017). Improving our understanding of multi-tasking in healthcare: Drawing together the cognitive psychology and healthcare literature. Applied Ergonomics, 59, 45-55.

[9] See, e.g., Charlene M. Kalenkoski & Gigi Foster (2018). Introduction: The economics of multitasking. In C. M. Kalenoski & G. Foster (eds.), The Economics of Multitasking, Palgrave Macmillan: Houndmills, Hampshire; Francesca Mochi & Nora Madjar (2018). Interruptions and multitasking: Advantages and disadvantages for creativity at work. Chapter 5 in R. Reiter-Palmon, V. L. Kennel & J. C. Kaufman (eds.), Individual Creativity in the Workplace: Explorations in Creativity Research, Academic Press: Cambridge, MA.

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