Labor shortage: 5 ways to achieve more with less

Layoffs and furloughs dominated the news throughout 2020, amid COVID closures and shifting consumer demand. In a surprising turn of events, clients have increasingly been facing the opposite problem: A shortage of workers.

The pandemic not only drove new ways of working; it changed the way people view their jobs, careers and lives. More than 80% of managers in our Mindsets Matter research reported that COVID-19 has impacted the way they think about work in general and their attitude toward their companies’ leadership.

We’ve all heard the reports of workers quitting to find more purposeful work, higher pay or better conditions amid a hot job market. Others left the workforce altogether. In September, 4.4 million workers quit their jobs, setting an all-time record quit rate of 3%.

The ripple effect on business is massive: there are 11 million job openings waiting to be filled, according to the latest data from the U.S. Department of Labor. Business leaders across industries are left grappling with how to do more with less, forcing many to scale back expansions and reduce days and hours of operation. All while managing rising labor costs and navigating through inflation and economic uncertainty.

Leaders need to take action to address the situation head on, but where to begin? We recommend a zero-based approach that looks across the company at all of the work done today from a clean sheet. Here are 5 ways leaders can zero-base their business to do more with less: Reinvent. Automate. Outsource. Reskill. Engage.

1. Reinvent

Everything has changed–from the skills required to how and where work is performed and what motivates employees today. That requires a zero-based approach to reinventing your future workforce. Take a fresh look across your entire workforce to find where you can stop doing work by changing standard operating procedures, simplifying processes and deploying technology more effectively. Help ensure you are doing work that truly moves the needle for your customers and growth strategy using your investments in technology and tools to their fullest potential. One global consumer packaged goods company that needed to ramp up production by 25% was able to reduce the number of new hires by finding new ways to make its plants run more efficiently. While efficiency is always great, it’s even more critical today as another way to lessen the impact of the labor shortage.

2. Automate

Companies that considered automation too costly in the past may find the equation has changed when you factor in the rising cost of labor and the shortage of workers. In some cases, turning to an outsourcing partner can help reduce up-front costs of automation by using their off-the-shelf solutions. First consider whether the work could be stopped–and if not, focus on finding areas where technology could enhance the way teams work and unlock new opportunities. For example, we use automation to help remove application and infrastructure bottlenecks and free up human resources to focus on higher priority issues. Analytics assessment tools enable the rapid identification and prioritization of those areas that can be automated to reduce human touchpoints.

3. Outsource

Outsourcing work that is repetitive and rules-based can help reduce employee burnout and turnover. Junior team members in these roles often enter the company with higher skill sets and higher expectations and are more likely to experience burnout. Outsourcing repetitive roles can free up talent to move into more rewarding roles and focus on higher-value, interesting and impactful work. Career advancement, including competitive wages, valuable work and the opportunity to move up, was at the top of the list for employees and job seekers in a recent survey, with 82% considering it a dealbreaker if a company doesn’t offer this type of advancement.

4. Reskill

What if your employees could find that “better job” by staying put? Reskilling and training can help build the workforce you need for the future and retain talent displaced by organization changes, including automation and outsourcing. Instead of losing productive, loyal employees that have deep knowledge of your business, consider a truly human approach that offers them new skills and helps redeploy them. A major retailer launched a pilot program that used artificial intelligence to analyze the labor market and their workforce’s skills. They were able to identify where skillsets overlapped and pinpoint gaps where workers would need reskilling to move from their current role into a new one. This approach is a win-win for the company and employee.

5. Engage

Attract and retain talent by engaging employees with work that is core to the company’s identity, requires more strategic thinking and occurs at a faster pace. Creating new opportunities for growth is critical as 86% of workers feel their career has stalled during the pandemic according to a recent survey. Some organizations create agile and rotation-based workgroups, bringing together employees across several functions to focus on key aspects of the business, such as improving customer service. In turn, they not only found new ways of working but provided new opportunities for employees. A large construction client engaged employees in finding new solutions by creating automation and innovation task forces, and then recognizing and rewarding employees for their contributions. Employees that are part of co-creating solutions are likely more engaged and happier, which helps companies keep and attract talent regardless of a hot job market.

In addition to actions leaders can take to address the current shortage, it’s equally as important to take a longer-term view and shift both thinking and strategy when it comes to transforming their business. Our clients are seeing benefits from employing predictive analysis and tools that identify the work people support today, model future state opportunities, and track progress against target outcomes.

Special thanks to Joseph Puma for his contributions to this blog.