Preparing for a Slowdown in the Age of a Labour Shortage
Organisations are starting to face an unprecedented situation as the global economy continues what the IMF calls a synchronised slowdown. While in previous slowdowns throughout the past century, as the economy slows, the supply of qualified labour increases – this may not be the case this time around.
The world is heading towards an economic environment where financial metrics point towards a cyclical downturn, but the struggle to hire good people intensifies. To stay competitive, the employee experience must be effortless and professional: fast, accurate and up to expectation.
This places workforce management and HR practices in a brand new light. Not only do you have to hire the right people, but more than ever, you have to make sure that the talented people you employ work the right way at the right time and get paid the right amount at the right time. This is something we at PARiM can help you with.
Leading firms caught between slowing growth and a growing staffing shortage
Corporative earnings and economic growth indicators are decelerating globally. Looking at the numbers is sobering.
For example, CNBC reports that even companies with a reputation for fast growth, like Tesla, Apple or Amazon, are predicted to grow revenue in single digits during this decade.
(Source: CNBC)
And while the economy slows down, so does the availability of human resources: since the pandemic, workers have been switching sectors and becoming reluctant to take up jobs in specific sectors because of concerns over wages and working conditions.
Finding new talent is now more challenging than ever.
More jobs than workers for the first time in decades
The same trend is also starting to take hold in the services sector, with Vox reporting that "retail and restaurant workers are more in demand than IT workers in the United States". In fact, since 2018, there have been more available jobs than workers in the US, reversing a decades-old trend:
(Source: Vox.com)
For firms from manufacturing to retail and healthcare and hospitality staffing, this reversal of employment trends and an economic slowdown can have a drastic impact. Your margins are squeezed while you feel pressure to act and invest in HR and workforce management.
The result? More inward-looking enterprises searching for efficiencies
Thus, in a slowing economic environment, companies worldwide turn to a familiar playbook: shutting down, spinning off or outright selling non-core assets and initiatives, focusing on technologies that help to strengthen their core processes and revenue streams.
However, "the don't rock the boat" strategy has a huge problem: a good labour pool is the foundation that helps you survive a slowdown. And unlike in prior slowdowns, that is now increasingly scarce.
So what do you do?
You need to keep investing and attracting good people to your organisation because otherwise, your competition will eat you out in the long term and even in the medium term.
The high cost of shaky operations
One of the most cost-effective and proven ways to attract and keep talent is the simplest: increasing operational excellence and competence via investing in professional tools that can keep your workforce motivated and core operations earning revenue even in hard times.
There is a massive reason that triumphs over other opportunities: the cost of an operational error has never been higher.
Due to poor tools, your managers can make a mistake when scheduling someone who is not qualified for the shift, overworking someone due to not having a scheduling calendar with a long-term view, or failing to pay someone what they ought to have earned.
All of this has a strong and direct material impact not only on productivity or your KPIs, but your reputation as an employer and your ability to attract the top talent you need to thrive.Leadership through partnership
Operational excellence is the best path to growing to become a trustworthy and competent partner. Especially if you have tens of thousands of them.
Surveys repeatedly show that most workers want to solve mundane operational problems. They can use something other than fancy amenities or costly employee engagement programs. Workers want reliable digital tools that simplify their work and the appropriate training to use them.
The critical pitfall is assuming you already have the right tools and processes. As the above-linked study by PwC points out: "90% of C-suite executives believe their company pays attention to people’s needs when introducing new technology, but only about half (53%) of staff say the same."
The search for professionalism leads to tools like PARiM
Professionalism has become key even in industries known for frequent employee turnover. Because the volume of incoming labour to go through the "meat-grinder" of these and other staff-reliant service sectors is just no longer there. And people can choose better alternatives when they feel an organisation fails them.
If you are willing to hire and retain the best staff available, start investing in them today.
Try PARiM’s Workforce Management Software and let our experts guide you through every step - from setting up your account to finding the tools most suitable for your business.