As the global economy continues on what the IMF calls a synchronised slowdown organisations are starting to face an unprecedented situation. 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 while economic metrics point towards a cyclical downturn the struggle to hire good people only intensifies. In order to stay competitive, the employee experience must be both effortless as well as professional: fast, accurate and up to expectation.
This places workforce management and HR practices in a brand new light. Not only to you have to hire the right people, but more than ever you have to make sure that the talented people you employee 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 across the globe. Looking at the numbers is sobering.
For example, the global automotive giant Daimler announced that the Mercedes Benz cars division earnings declined from 7.2 billion euro in FY 2018 to 3.7 billion euro in FY 2019. CNBC reports that even companies that have a reputation for fast growth like Tesla, Apple or Amazon are predicted to grow revenue in single digits for the upcoming years.
However, at the same time, both Daimler and Tesla are caught in a vicious battle for talent. Tesla, in particular, is spending a large percentage of it's CapEx budget on building a new factory near Berlin, Germany with the ostensible goal of gathering together the best of the engineering and design talent that Germany has to offer.
Surprisingly, business models have been turned upside down – companies are building plants to attract the right workers rather than attracting workers for jobs that a new plant offers.
More jobs than workers for the first time in decades
The same trend is starting to take hold in the services sector as well, 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:
For firms from manufacturing to retail and healthcare and hospitality staffing this reversal of employment trends along with 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: the foundation that helps you survive a slowdown is a good labour pool. And unlike in prior slowdowns, that is now increasingly scarce.
So what to do you do?
Clearly, you need to keep investing and attracting good people to your organisation, because otherwise your competition will eat you out not only in the long-term but even in the medium-term.
The heavy 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 professional tools that can keep your workforce motivated and core operations earning revenue even in hard times.
There is a huge reason why that triumphs 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 ought not to have worked (due to legal constraints) or overworking someone due to not having a scheduling calendar with a long-term quarterly view like PARiM has or failing to pay someone what they ought to have earned.
All of this has a strong and a irect material impact not only on productivity or your KPIs but your reputation as an employer and 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.
In fact, surveys show time and again that solving mundane operational problems is what workers really want in the vast majority of cases. They do not necessarily need fancy amenities nor costly employee engagement programs. Workers want reliable digital tools that simplify doing their work and to be trained to use them.
The key pitfall is assuming that you already have the right tools and processes in place. 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."
How many times have you looked at another company from the outside and seen that people are constantly complaining and the company is suffering due to using sub-standard software?
We dare to assume the answer. A lot.
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.
To address this, at PARiM Workforce Software we are launching our Enterprise plan in the coming months. And for a limited time we are open to launch partners. Get in touch for a tailored introduction to the program.
We can help you combine an employee-friendly and effortless work experience for your employees, clients and managers while helping you create and maintain complex scheduling processes and payment schemes in the back-end. This is something that very few corporations manage to get right and we know we can deliver to you as your partner.