Article
Enhancing Human Capital in the Industrial Products and Construction Industry
Driving success through Human Capital: Key Workforce Strategies for IP&C Companies
The industrial products and construction industry (IP&C) plays a crucial role in global development, infrastructure, and economic growth. In this dynamic sector, maximizing human capital has emerged as a key driver for success. Companies that prioritize human capital development and create a conducive work environment outperform their peers in a highly competitive talent market.
Why do we need Human Capital in IP&C?
The industrial products and construction industry is characterized by complex technologies and demanding processes and in many respects depends on highly qualified and experienced employees. Looking at the labor market in Germany, there are 632,000 open positions that cannot be filled with qualified employees1. Of these, about 162,000 are directly in the construction industry2. Based on these figures, it is not surprising that 62% of manufacturers identify finding and retaining talent as their top business challenge3.
There is significant change taking place in the industrial products and construction industry, driven by advancements in technology, demographic shifts, and the global push for sustainability. However, these changes have resulted in a range of workforce challenges that require new approaches and methods to tackle them.
Challenges and how to face them
The industrial products and construction (IP&C) industry faces a multitude of challenges in today's rapidly evolving business landscape. Addressing these challenges is essential to ensure the sector's sustained growth and competitiveness.
1. Competition for talent:
As the IP&C sector requires skilled professionals with technical knowledge, there is fierce competition among companies to attract and retain top talent. This makes it challenging for IP&C companies to fill critical roles within their organizations. To meet this challenge, companies need to develop alternative sourcing strategies, tap into new sources of talent, and invest in re- and upskilling programs for their current workforce.
2. Cultural adaptation:
IP&C companies often have traditional and hierarchical cultures that need to adapt to the changing landscape of work. Shifting towards a more agile and innovative culture can be a significant challenge as it requires mindset changes, new ways of working, and continuous learning. Old leadership styles, siloed organization and career structures, and static workplace concepts need to be 'reinvented' to unleash the innovation and performance potential of the workforce.
3. Future of work and technological change:
Technological advancements such as automation and Artificial Intelligence (AI) are reshaping job roles and require new skills and competencies. IP&C companies need to adapt to these changes and ensure their workforce is equipped for the future of work.
4. Data-driven decision-making:
Gathering and analyzing employee data is essential for effective workforce management and planning. However, many IP&C companies struggle to access and utilize accurate and relevant people analytics to make data-driven human capital decisions. It is crucial to prioritize the development of strategies for data-driven decision-making, thereby leveraging insights into work and processes to inform workforce strategies for both current and future ways of working.
5. Knowledge transfer:
Effective knowledge transfer between generations is essential to retaining business-critical knowledge. The workforce often comprises both experienced professionals and younger talent, so transferring knowledge from one generation to another can be challenging due to differences in communication styles and technological understanding. Investment in initiatives to facilitate knowledge sharing and transfer will be inevitable.
6. Continuous development and retention of employees:
It is not enough for IP&C companies to focus solely on reskilling their employees. They must also foster a culture of continuous learning and development to meet the evolving demands of work and to drive innovation. Changing working practices within organizations, utilizing skills-based frameworks to transform workforce practices, and creating an environment that supports ongoing learning will be key to success.
The role of HR
The task of HR in connection with these challenges will be to attract and retain the right talent, as this will be the critical asset in realizing business goals and strategies. HR needs to provide a modern work environment in which employees can grow and perform in order to ensure productivity, and to leverage people analytics to manage and steer though constant change and secure business continuity.
Our Deloitte expertise and experience helps companies to develop and implement a tailored HR strategy to meet and overcome workforce challenges in the IP&C sector. We help to deliver the right HR services, automate, and digitalize HR processes, build an effective HR organization, and provide relevant HR data and analytics to future-proof the workforce.
1 Kompetenzzentrum Fachkräftesicherung KOFA: Überblick Fachkräftemangel, last accessed on 17. October 2023.
2 IAB – Institut für Arbeitsmarkt- und Berufsforschung: Aktuelle Ergebnisse, last accessed on 17 October 2023.
3 Deloitte (2022): From great resignation to great reimagination, last accessed on 17 October 2023.
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