Operational efficiency as a mechanism of talent shortage relief
April 10, 2022 2317 words 11 minutes to read
According to the ManpowerGroup Employment Outlook Survey Q3 2021 (ManpowerGroup, 2021), talent shortages reached a 15-year high in 2021. 69% of employers worldwide struggled to fill positions, compared to 38% in 2015 and 31% in 2010. Talent possessing soft skills is increasingly challenging to locate, and evidently, fewer candidates with technology-related expertise that businesses need are available. Skills gaps and the lack of talent can be obstacles to growth for many IT organizations (Outsystems, 2022).
Despite the talent shortages, businesses need to keep their operations at peak performance if they want to stay competitive. But without talent, such a goal is extremely challenging. Fortunately, your enterprise could overcome talent shortages.
Businesses can focus on improving the efficiency of their processes to reduce the strain on existing employees and allow them to perform their duties more effectively. This blog post will outline how increasing operational efficiency could help organizations adapt to current shortages and prompt them to rethink how they do business.
Why do talent shortages exist?
“You’ll work really hard and they’ll enjoy your efforts, but when it comes time to discuss a promotion, they don’t want to promote you unless they see you’re being scouted by another company.”
– Jayde Young, former employee of Viacom, MGM, and New York Magazine
Understanding why record-breaking talent shortages exist in the first place could help businesses alleviate talent shortages by offering more attractive benefits packages to professionals. With that in mind, here are some of the reasons for severe talent shortages (Castrillon, Sep. 22, 2021):
- More and more older employees are retiring. Baby Boomers (people born between 1946 and 1964) are retiring at an increased pace, which the COVID-19 pandemic has exacerbated (Fry, Nov. 9, 2020). The number of retired Baby Boomers rose more from 2019 to 2020 than in prior years. In the third quarter of 2020, about 28.6 million Baby Boomers retired – 3.2 million more than in the third quarter of 2019. For some of them, job losses and the inability to find a new job due to the pandemic might have been the leading causes of retirement.
- Lack of talent. Younger generations often do not possess the experience or training to replace retired Baby Boomers. Even those who continue to work are not necessarily motivated to keep working for promotions that are increasingly harder to achieve. With company growth slowing in the last 20 years, some people have burned out trying to climb the corporate ladder (Liu, Apr. 22, 2021).
- Changing employee needs. Employees have become more demanding, especially after trying the flexibility of remote working. According to the EY 2021 Work Reimagined Employee Survey, 54% of employees worldwide would consider leaving their jobs after the COVID-19 pandemic if they do not achieve flexibility in where and when they work (EY Americas, May 12, 2021). Employees are also starting to emphasize their health and well-being while at work, which might force businesses to redesign their workspaces (JLL, 2022). Eight in ten employees want a better work-life balance as well, according to the ManpowerGroup Employment Outlook Survey Q3 2021 (ManpowerGroup, 2021).
On the one hand, businesses clearly can’t find enough talent to fill their positions. On the other hand, the available talent might not be willing to accept compromises, having developed a comfort with the flexibility and convenience of working from home. This situation suggests that businesses need to pay more attention to what the talent says about employment expectations. Subsequently, enterprises may need to rethink their office workflows to allow employees to perform their duties more flexibly and safely.
Operational efficiency as a tool for talent shortage relief
“Organizational culture has historically been built based on shared in-person experiences and it is fascinating to see that the new ways of working have improved such culture in the eyes of many employees. As we look toward the longer-term and organizations continue to transform their operations, employers will need to consistently re-assess conceptions of productivity and the impact on their cultures, ensuring their team’s approach is optimized for the in-person, hybrid and digital work experience.”
– Roselyn Feinsod, Principal, People Advisory Services, Ernst & Young LLC
Obviously, businesses might need to invest significant effort to attract the best talent. However, the availability of talent is a variable that businesses cannot control. Enterprises can make their office environments attractive, but this won’t help as long as there is a shortage of people looking for employment. Instead, businesses could focus on the variable that they can control to a greater degree – the efficiency of their internal operations. Businesses could simplify their workflows and processes and make them more efficient. These decisions are strategic choices.
But how would this help enterprises? We offer two perspectives relevant to this post:
- Operational efficiency could relieve talent shortages by facilitating employees to accomplish a higher volume of work in the same amount of time. Streamlined workflows could greatly simplify business operations, minimize distractions and friction between employees, and enable employees to deliver value quicker. All that without hiring extra employees!
- Operational efficiency could force businesses to reevaluate their processes and improve efficiency on a large scale. Operational efficiency isn’t just about relieving talent shortages – it could help enterprises introduce organization-wide changes, resulting in dramatic cost reductions and accelerated delivery of value.
Although operational efficiency does not have to be specific to talent shortages, it could apply broadly across an organization. Pretty much any step toward efficiency and simplification could indirectly dampen the effect of talent shortages. So, there is plenty of room for maneuver here.
Four ways to improve operational efficiency to relieve talent shortages
We’ve established how operational efficiency could alleviate talent shortages. Now, let’s look at a few powerful ways to achieve this operational efficiency (Faircloth, Aug. 12, 2021).
Automation is perhaps the most promising tool for talent shortage relief. If a business can automate a process, it should – here’s why:
- Automation can minimize the volume of repetitive tasks. Repetitive tasks – like sending HTTP requests to an API endpoint – can be extremely tedious, boring, and even frustrating for employees. Stress or dissatisfaction with one’s assignment might severely decrease the performance of employees.
- Automation can free up time for other, more critical issues. Higher levels of automation lead to higher savings of time – time that employees could spend doing a task or activity more useful for their employer and more exciting for themselves.
- Automation can reduce human error. Employees are prone to error. Fatigue or lack of attention could lead them to miss a crucial step in a workflow or mistype an important value, resulting in serious software bugs. Automated programs can ensure that workflows are error-free.
In some industries, automation can also help businesses protect the health and safety of their employees. For example, machines are advantageous for working in highly hazardous conditions (Harris, May 1, 2020). To automate successfully, businesses first need to standardize their processes and make them more consistent. Without standardization, enterprises might need to develop custom logic for an unmanageable number of distinct processes. But when processes are standardized, businesses can reuse logic across multiple workflows, which dramatically simplifies automation.
2. Online collaboration
Online collaboration is a must in the post-pandemic world. Remote collaboration has been constructive well before the COVID-19 pandemic, but now, businesses can no longer ignore the importance of remote collaboration. Through effective collaboration software, employees can seamlessly act as a team remotely and view the activities of others.
As a simple example, Microsoft Teams allows team members to share documents across the web versions of Microsoft Word. Employees can easily exchange files, review others’ work, and quickly respond to feedback. As another example, software development teams could and should use GitHub as a centralized remote platform for sharing code, building new features, and integrating their code with the work of others.
The benefits of online collaboration are evident both on-premises and remotely off-premises. Online collaboration is the most helpful tool for remote working because employees lack easier ways to keep working on shared projects. With that said, the use of online collaboration is wide-ranging in the office because employees can request changes or review others’ work without identifying the employee responsible for a particular task or activity.
3. Workflow management systems
Workflow management system (WfMS) software could add a great deal of clarity to employee duties. WfMS software could help by:
- Furnishing guidance to employees outlining current and subsequent tasks and activities.
- Supporting employees to prioritize tasks and effectively achieve current tasks.
- Unambiguously assigning responsibility for specific components and tasks to explicit employees.
Thus, workflow management software could improve operational efficiency by ensuring that employees’ work pipelines are always at their optimum level. This toolset would add predictability to internal workflows and support employees to seamlessly transition from one assignment to the other.
4. Staff redeployment, reskilling, and upskilling
Staff redeployment is a viable tactic for businesses where some departments and teams are more understaffed than others (Ingham, Feb. 3, 2022). Businesses can identify over- and under-resourced areas and reallocate staff to achieve a more balanced distribution of talent. When redeploying, enterprises should pay attention to increasingly automated sectors first.
Because automation minimizes the need for human intervention, employees specialized in automated areas could be moved to roles that are very unlikely to be automated any time soon. Whenever necessary, redeployment could also be combined with reskilling and upskilling to make sure that employees have the required knowledge for their new roles.
Keeping industry specifics in mind
Businesses must keep the specifics of their industries in mind when thinking about operational efficiency. The four steps outlined above are broad enough for any business to use – however, when it comes to opportunities and implementation details, things might differ radically from industry to industry. A few examples of industry-specific implementations of operational efficiency are given below. Some of these may apply to several industries.
- Online businesses could provide customers with call-less ways to order products or services. For example, the Michigan-based pizza franchise Jet Pizza began implementing text orders in 2019 (Cansler, Feb. 9, 2022). This action simplified the ordering experience for customers, but it also dramatically reduced the number of phone calls that staff needed to handle.
- In physical stores, contactless ordering and payment options can reduce the need for front-of-house staff (Dinsmore, Oct. 21, 2021). Handheld POS (point-of-sale) systems can further improve efficiency by removing the need for workers to go back and forth between stationary POS systems and customers.
- Restaurants could apply AI-powered scheduling solutions to allocate employee hours flexibly based on current customer demand (Heymann, Oct. 5, 2021). This solution can simultaneously allow restaurants to keep up with customer needs while reducing employee burnout.
- Telehealth appointments could dramatically reduce the load on healthcare staff by minimizing the amount of time they spend with each patient (Rigert, Jan. 11, 2022). Telehealth could also reduce appointment costs for patients.
Aside from their specific industry requirements, businesses need to be mindful of intrinsic strengths and weaknesses. While we could furnish general tips for improving operational efficiency, businesses must invest in identifying the particular processes and workflows that could be improved.
Increasing operational efficiency isn’t necessarily the perfect solution to talent shortages. An efficient business could undoubtedly do more with a fixed staff size. However, at some point, businesses will need to actually attract more talent to grow and expand in their industries.
Nonetheless, operational efficiency has long-lasting benefits that extend well beyond talent shortages. Efficient operations could help businesses:
- Significantly reduce costs.
- Deliver value to the market in a shorter amount of time.
- Identify and fix products and services issues quicker.
- Confirm that all internal units operate together to achieve a common business goal.
Businesses need to identify and prioritize weak areas to improve efficiency. Thus, businesses should rethink high-priority processes first, moving from one process to another. Companies shouldn’t try to tackle several processes simultaneously if they wish to manage effectively. Gradually, businesses should expand their optimization efforts to more and more areas of their operations.
While planning optimizations, businesses might benefit significantly from simulation. Simulation enables businesses to test ideas and changes safely and effectively in a virtual environment. Subsequently, companies can use the simulated results to propose changes supported by accurate and complete data. If your team wishes to explore more about software simulation, browse through the inexpensive sim courses on Udemy, Coursera, or FutureLearn.
Cansler, C. (Feb. 9, 2022). 4 technologies that can help manage labor shortages. FastCasual.
Castrillon, C. (Sep. 22, 2021). Why U.S. Talent Shortages Are At A 10-Year High. Forbes.
Dinsmore, K. (Oct. 21, 2021). The Restaurant Workforce Shortage: How Technology Can Help. Sculpture Hospitality.
EY Americas. (May 12, 2021). More than half of employees globally would quit their jobs if not provided postpandemic flexibility, EY survey finds. Press Release-Ernst & Young Global Ltd.
Faircloth, T. (Aug. 12, 2021). How Companies Are Using Technology to Solve Labor Shortage Problems. CHEKhub.
Fry, R. (Nov. 9, 2020). The pace of Boomer retirements has accelerated in the past year. Pew Research Center.
Harris, S. (May 1, 2020). The Benefits Of Automation In Today’s Workforce. Forbes.
Heymann, M. (Oct. 5, 2021). Using Technology to Combat the Labor Shortage. Modern Resaurant Management.
Ingham, A. (Feb. 3, 2022). Three alternative strategies for tackling skills shortages. UNLEASH.
JLL. (2022). Five new employee expectations for the post-COVID life sciences workplace. Jones Lang LaSalle IP, Inc.
Liu, J. (Apr. 22, 2021). Older millennials made it to management—now they’re wondering if they even want to be the boss. CNBC Make It.
ManpowerGroup. (2021). [ManpowerGroup Employment Outlook Survey Q3 2021: Global Results](https://go.manpowergroup.com/hubfs/Talent Shortage 2021/MPG_2021_Outlook_Survey-Global.pdf “ManpowerGroup Employment Outlook Survey Q3 2021: Global Results”). ManpowerGroup.
Outsystems. (2022). 7 top technology challenges in 2020. Tech Crunch.
Rigert, M. (Jan. 11, 2022). 4 Ways Technology Can Help You Minimize Staff Shortage Woes. SolutionReach.