(and What This Means for HR)
In this article, we’ll look at the trends mentioned above (among others) and how companies are responding.HR TRENDS
1. Staff Shortages Demand Flexibility
Labor shortages persist in many sectors, including retail, construction, hospitality, and administrative services. As discussed by Euronews, in 2023, 75% of employers in 21 European countries said they couldn’t find workers with the skills they needed. There are several factors contributing to these shortages, including the aging of the workforce and a mismatch between education and labor market needs. In the short term, flexible work arrangements can help organizations manage the deficit. One solution is to diversify the contract mix.Upskilling and Cross-Training
Employers aren’t only seeing a lack of skilled applicants but in some cases, a lack of applicants full stop. Investing in employee development can help bridge the gap. It can reduce dependency on costly external hiring as well as make roles more varied, potentially boosting morale and engagement.How Workforce Planning Software Helps
Advanced workforce management tools offer much more than tracking employee availability, basic labor scheduling, attendance tracking and absence management. They support forecasting and dynamic scheduling, making it easier to position the right staff in the right place at the right time – based on accurate data.2. Hybrid Working – Will it Continue?
In a controversial move, some large organizations including Amazon have been calling staff back into the office, removing the flexibility they once had to work remotely or within a hybrid arrangement. This has been a significant hit to employee morale in many cases. But is it the start of a trend? Will more companies follow suit? Research discussed by Forbes suggests that’s not the case and that hybrid work is actually becoming more widespread. Whatever happens, as long as hybrid working remains a part of the global workforce, HR will serve as the glue that holds teams together. HR departments will continue to be responsible for designing effective workforce management strategies, collaboration frameworks, and digital communication protocols, as well as maintaining employee engagement and cultural alignment3. Artificial Intelligence and Analytics
AI has drastically changed all manner of business operations, including core HR functions. New tools are appearing all the time that automate repetitive tasks, letting teams invest more time in workforce planning and talent management strategy. Here are some use cases.AI in Talent Acquisition
Applicant Tracking Systems
AI-driven applicant tracking systems (ATS) can sort through thousands of resumes in seconds, identifying top candidates based on requirements set by the organization. This enables staff to process a larger number of applications without having to worry about time constraints. On the other hand, many skilled candidates fall through the cracks simply because their resume doesn’t match the exact requirements on the job description; the requirements that the AI is looking for. According to research by Harvard Business School, 88% of employers agree that highly skilled candidates are vetted out for this reason, and for middle-skilled workers, the figure is a staggering 94%. Systems can be reconfigured so that the criteria are not so narrow and punitive – where factors like gaps in one’s resume doesn’t lead to immediate disqualification. Companies can still save time this way, without excluding suitable candidates due to rigid filtering.AI Video Assessments
Another, more controversial solution is the use of AI to perform initial screening interviews without human input. When there’s significant competition for a given role, being able to automate video interviews is a welcome solution – one that became more popular post-pandemic. However, care must be taken to not disqualify certain applicants due to bias. Candidates with autism, other forms of neurodivergence, and various disabilities, are particularly at risk as they may not meet the behavioral criteria that the AI models are trained upon. The algorithms consider factors such as eye contact and pauses in speech, reducing the chances of some neurodivergent candidates to pass the initial screening, despite everything they may have to offer. Part of the responsibility lies with the developers of such solutions, as the AI models have been taught that neurotypical patterns are correct based on their training data. To avoid discriminating against ND or disabled candidates, organizations need to consider whether the criteria these tools are testing for are based on merit or social norms.Chatbots and Virtual Assistants
Another application of AI is using chatbots and virtual assistants to help with internal communication, onboarding and training. Chatbots can answer common employee queries about policies, benefits, and so on, freeing HR staff to focus on complex or sensitive issues requiring human input. Virtual onboarding assistants can guide new hires through required paperwork, orientation schedules, and initial training, creating a more helpful and engaging experience – instead of leaving new staff to fend for themselves. With only 12% of employees agreeing that their employers do a great job at onboarding (Gallup), this type of support is very welcome.Predictive Analytics in Workforce Management Software
Workforce management solutions can provide comprehensive datasets, which analytics tools then use for forecasting. As mentioned, they can predict staffing needs based on historical patterns, seasonal demand, etc, supporting real-time WFM.4. Sustainability Legislation
Many organizations are setting ambitious goals in line with changing sustainability regulations. This inevitably shapes HR policies, such as encouraging remote work in order to reduce emissions. Sustainability policies also affect employer branding, helping attract Gen Z workers.RETAIL TRENDS
1. Rising Costs and Bankruptcies
There has been a 23% increase in insolvencies in Western Europe (across sectors) with the UK and France particularly affected. Rising labor and energy costs, and ongoing impacts from the pandemic, are contributing. As for retail, the Netherlands is seeing a trend of planned bankruptcies where companies intend to continue operating down the line, often at reduced capacity. Companies that have taken this approach include Blokker, Dunkin’ Donuts, and The Body Shop, with Vanilia potentially following suit. Analysis shows that food retailers are the most vulnerable, unable to compete with the competitive pricing of chains such as Lidl. The fashion sector is also at risk due to high property leasing costs. The approach of planned bankruptcies and restarts has many opponents due to the impacts on employee rights, and the European Court of Justice has ruled that it needs a legal basis for execution.How Can a Workforce Management System Optimize Staffing Expenses?
As mentioned, advanced workforce management software optimizes scheduling thanks to demand forecasting. It enables adequate coverage while reducing overtime expenses, and the workforce data it collects brings insights that can inform long-term cost reductions. MANUS WFM has proven to reduce labor costs by up to 10%.2. Supply Chain Optimization
European companies are addressing ongoing supply chain challenges in several ways. Nearshoring is taking off – according to research discussed by SupplyChainBrain, 55% of EU-based companies have increased their purchases from local or neighboring regions, and 60% of both EU and US companies are planning to nearshore their production in the years to come. Technology is helping offset some of the delays caused by supply chain disruptions. In the UK, for example, 47% of mid-sized companies are integrating AI into supply chain processes to improve operational efficiency. Advanced ERP and Warehouse Management Systems (WMS) help retailers keep a tighter handle on inventory levels, ensuring that the right products are available at the right time without tying up excessive capital. AI-driven demand forecasting further refines these processes.3. Sustainability Concerns Due to XXL Distribution Centers
Consumer and regulatory pressures for more sustainable retail practices continue to grow, whether it’s reducing single-use plastics, sourcing eco-friendly materials, or improving supply chain transparency. One particular area to note is the impact of XXL distribution centers. These centers are designed to offer economies of scale, enabling retailers to store and process vast amounts of inventory under one roof. The rise in e-commerce has influenced their emergence. However, they’ve been attracting scrutiny regarding environmental impact, land use, and traffic congestion. Some critics even claim they haven’t led to their expected economic benefits. The construction of new sites increasingly adopts circular principles. For example, consider the 45,600 square meter expansion of the Bleckmann campus at the XL business park in Twente. Construction is in line with validated values for the Material Circularity Indicator (MCI), the Loosening Index (LI) and the Environmental Performance of Buildings (MPG). It’s using heat pumps, solar panels, energy-efficient installation techniques, and other eco-friendly methods. There’s also Hogeweg Business Park in Hulst, a site of 118,000 square meters that’s focusing on biodiversity.LOGISTICS TRENDS
1. Automation and Robotics
Much like in retail, the logistics sector is witnessing a surge in automation. Robotics are used for picking, sorting, and packing items with minimal human intervention, and drones are being trialed for last-mile deliveries. According to Data Bridge Market Research, the global logistics robot market is set to grow from USD 14.58 billion (2023) to USD 85.03 billion by 2030 – a CAGR of 24.66%. In Europe, Switzerland, France, Germany, Denmark and the UK are leading the way. Enterprise workforce management software makes it easier to schedule specialized staff, such as automation technicians and robotics engineers, ensuring that operations continue around the clock.2. Sustainable Logistics
Electric vehicles, consolidated distribution points, on-site renewable generation and, as mentioned, circular distribution centers, are vital elements of the green supply chain. This has implications for HR as new roles emerge, like energy systems managers and sustainability coordinators.3. Growing Supply Chain Risk
Supply chain risks are becoming broader after many years of disruption. In such an environment, adaptability is a must, and real-time data makes that possible. Companies are forced to re-evaluate their strategies on a regular basis, considering approaches such as just-in-time manufacturing, stockpiling, supplier diversification, and beyond. Supply chain analytics has a more important role than ever before.4. Changes in Urban Logistics
The Netherlands remains a prime logistics hub, boasting advanced port facilities and road networks; as discussed by CBRE, more than 680,000 delivery vans and 53,000 trucks drive through Dutch cities per day. However, increased regulation such as the introduction of zero-emissions zones has prompted companies to adjust their strategies – especially since there’s likely to be more of these zones in future. This is creating more demand for distribution centers at city boundaries.Contact
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