Talent shortages and workforce upsets

In this first of a four-article series, we open a discussion on how to shift our mindsets and expand our views on new work and workforce models. The objective is to find a sustainable, human approach to fixing talent shortage challenges, and it will take some radical thinking.

What’s work and what works?

When we speak about the importance of a deliberate work design, workforce composition and employee value proposition, very often the topics resonate with HR and talent leaders, but may not always be pressing matters to business leaders. After all, in the short term, businesses were able to continue operations as usual, and often saw talent issues as a mid- or long-term problem.

Times have changed. In Deloitte’s recent CEO surveys, respondents cited talent shortages as their main concern, along with geopolitical issues, of course. Talent shortages are now a daily cause of businesses failing to deliver their products and services.

Such a workforce challenge – one that directly poses risks to business continuity – should not surprise anyone working in the HR space. The current environment of crises and concerns, and their enormous consequences, are forcing the need for a drastic overhaul of the labour markets in the Netherlands and, to a similar extent, those surrounding the country. It’s about time we rethink how work is designed and how the workforce is composed.

Considering the labour market today, and work itself, two fundamental notions seem to have been ignored: 1. Companies exist to provide products and services that should make people’s lives better. 2. The act of providing those products/services should also positively contribute to people’s lives. Simply put: Because we spend so many hours of our lives at work, can we design work in a way that it is sustainable, fair and even fun?

Labouring the truth: four facts behind the workforce change

We’ve seen many headlines about organisations grinding to a halt, unable to continue without people to do the work. There are four main factors at play:

• The setup of the labour supply is changing. We face an ageing workforce, with more workers leaving it to retire than new workers are joining, meaning we face a shrinking workforce. During the COVID-19 pandemic, many organisations that would have gone out of business in ‘normal times’ were kept afloat, each retaining their workforce and creating an artificially high demand for labour.
• The demand for products, services and labour is increasing. This is not explained simply by the artificially high labour demand linked to pandemic relief measures; consumers are spending more, as well. Money saved during lockdowns is now being happily spent. Although a change is expected, given the increasing inflation and economic downturn, even a recession would not be a long-term ‘solution’.
• Employee demands are strengthening. With current labour market dynamics, bargaining power lies with the employee. In many cases, the problem is not a lack of people to do the work, it’s a lack of people to do it for an unfair reward (be that remuneration or social security and secondary working conditions).
• Flexibilisation of employment models. This can be considered a positive or a negative shift. The supply of labour is becoming more flexible, and this is largely voluntary: many people are deliberately choosing to become independent workers. However, governments are severely delinquent in addressing this shift with appropriate laws and fiscal benefits. They have promoted flexible employment models for employers but failed to properly support employees, creating an unjust and dangerous context for many workers. The Dutch Borstlap Committee’s research has made a start by rethinking what the labour market could look like, but those changes will not be sufficiently implemented for many years.
  

The quest for a new approach to work models

In turning our attention away from what triggered the change, we look to the potential of applying new perspectives. By asking key questions about the very nature of work, business leaders can tune in to an approach that goes beyond short-term talent shortages:

1. What if we could reduce the effort of work, and redesign work to be fair?
The answer rests on a handful of other questions, including the fundamental ‘How do we design work?’. They also include: Is the work you and your employees do designed to give energy, rather than take it? Do you find yourself increasing the wellbeing offer to your staff to fix issues the work itself has created? Is the technology you implemented supporting people to do their best work, or is it hindering them? Do you design processes and technologies to improve efficiency, or do you put the human experience first? Are you able to use new ways of working to decrease meetings and workloads?

2. What if we shift our thinking from jobs to capabilities and skills?
Even if we can’t fill the empty seats for a job, we may be able to pinpoint the capabilities and skills required, and source those – even internally. After all, a job is simply a set of tasks or capabilities that someone deemed a job, and that was to be matched to one person. If we let go of this construct, can we design organisational talent processes based on skills and capabilities? The skill-based organisation has become a trending topic – see our recent in-depth publication – and for good reason: research shows that skill sets often have surprisingly large overlaps among roles). An even better question is, can we design labour markets based on skills and capabilities? In such a market, you could source skilled people who are currently missing your recruitment funnel for lack of specified certification or education; they have the desired skills, but gained them through years of work, volunteering, personal interests, and the like.

3. What if we stop trying to match one person to one vacancy?
And let go of the idea that an employee must be on our payroll?
As we mentioned, the supply of the labour market is moving toward a flexible setup. Now imagine we are focusing on skills and capabilities, rather than jobs. In the future of work we see many more employment options opening up along the talent continuum. We’re familiar with contractors and managed services, but we see a slow maturing of the gig economy and even crowdsourcing options. What if we identify the skills and capabilities needed to do an organisation’s work in the future, and then deliberately compose a workforce that leverages all the talent options in the most optimal way?