In today’s volatile job market, having a comprehensive strategy that gives employees a reason to join and stay with your organisation is critical. The framework presented hereunder outlines the underlying forces which influence an organisation’s workforce strategy. Organisations who understand these forces and how they apply to their workforce would be optimally placed to develop an edge in creating vibrant workforces capable of achieving sustained, positive outcomes.
When organisations use the four forces as a starting point to examine workforce challenges and opportunities, this can lead to discovering workforce considerations in a larger context which include the business strategy, organisational model and operating approach.
The four forces
- Specialisation
- Scarcity
- Humanity
- Rivalry
Specialisation
The expertise we obtain and build to succeed
The first identified force is that of Specialisation, which refers to modern organisations’ need for expertise and specialised skills in order to succeed. Currently, this force is catalysed by technology which eases collaboration amongst different employees, areas of the organisation and between different organisations. Technology makes it easier for employees or organisations to collaborate and depend on one another for skills and expertise, making it less necessary for an organisation to have numerous employees ‘generalising’ on the same thing.
Moreover, as organisations focus on what they do best, they may also opt to resort to outsourcing certain work rather than building this skill. Consider how local organisations are increasingly depending on digitally booked couriers for delivery services, which were previously conducted by their in-house resources .
Locally, we have noted an increase in organisation’s interest and effort to outsource services, as around 30% of the PwC HR Pulse Survey 2021 respondents have indicated this as one of the initiatives they took in the previous twelve months (September 2020 – September 2021).
Secondly, technology is propelling specialisation on an employee level where new, highly specialised roles, are being created. This includes roles such as cyber security, data scientists and software engineers.
In this regard, leaders must evaluate what new skills are needed and when, if it would be optimal to upskill or reskill internally, or source talent externally. Failing to anticipate the skills, and level of specialisation, that will be needed in the future will mean lost opportunities for the organisation.
Scarcity
The talent shortages and skills deficits that could harm your performance
The COVID-19 pandemic has increased the bargaining power of the workforce as organisations are faced with an unmet demand for candidates, resulting in Scarcity. Even before COVID-19, the demand for suitable candidates with the required skills was increasing at an accelerated rate due to the fast changing demand of the labour market. However, COVID-19 has become a driver by catalysing digitalisation at a more rapid pace and by radically transforming the type of skills that are needed.
The PwC HR Pulse Survey 2021 found that 61% of the respondents believe that the recruitment market is an employees’ market whereby the number of vacancies outnumber the number of interested candidates. The latest local unemployment figures published by the National Statistics Office also show that unemployment stood at 3.1% (February 2022), suggesting that Malta is close to full employment thus increasing the candidate’s bargaining power.
The majority of the PwC HR Pulse Survey 2021 respondents (66%) stated that they have been impacted by the lack of available talent in the past twelve months (September 2020 – September 2021). Amongst these, 30% stated that they have been highly impacted.
Humanity
The good we do for our people - and the world
The existential threat of climate change, growing wealth disparity, and the rising expectations of Generation Z are creating ever growing imperatives for organisations to prioritise meaning, humanity, societal impact and inclusion. Executives are realising that without making clear their company’s purpose, employees can become disenchanted and leave.
Some companies increasingly seek to differentiate themselves on their humanity — through initiatives such as their ESG initiatives. Employees want their company to show they are committed to the things they say they care about, and organisations ought to take this into account when devising their workforce strategy.
Locally, we have seen an increased awareness and reporting on an organisation’s ‘humanity’ especially as part of their D&I or environmental commitments. We foresee that as ESG reporting becomes more common, organisations will increasingly incorporate this into their talent strategy.
Rivalry
The reasons employees choose us over competitors
The digital revolution has created new forms of workforce rivalry as sector borders blur, tech leaders with advantaged business models boost pay scales, and geographic barriers become less relevant given new remote/hybrid work norms.
Locally, organisations are taking different actions to overcome these new forms of workforce rivalry. The PwC HR Pulse Survey 2021 found that around 38% of all respondents have boosted their pay scales to increase their organisation’s competitiveness in the ‘war for talent’,whilst a fourth of all respondents stated that they have increased their employee’s benefits package.
In this study, around 30% of respondents also admitted to looking into offshoring, body leasing, and outsourcing to foreign third-party providers as part of their workforce strategy.
Organisations are also adapting their workforce strategy to employ foreign workers, with around a third of all respondents stating they have increased their outreach to employ third country nationals. Additionally, 25% of respondents stated that they broadened their employment criteria to include candidates which were not previously eligible.
Given the difference amongst organisations and the interrelated nature of these forces, there is no best way to approach this framework. Some, if not all, of these four forces may pose a significant threat or opportunity to your organisation while others may not be a concern at this point in time.
These forces can be used when evaluating the workforce’s challenges and opportunities and can also be evaluated to initiate valuable conversations amongst leaders and HR practitioners. These conversations can lead to insights in other areas such as business strategy or organisation structure.
