The labour market has changed more than ever in recent years. Traditional labour recruitment has been a suitable solution for companies that need a temporary workforce – full-time and for long periods. But today’s world demands something more: flexibility, speed and the ability to adapt to constantly changing circumstances.
Changing expectations and lack of flexibility
Traditional labour recruitment is often linked to long-term rigid contracts, where workers are employed full-time for a fixed period. It is suitable for companies that need a long-term workforce but want to outsource the recruitment, contract management and payroll to a temporary agency. However, in today’s economy, workforce needs often change unexpectedly: one moment there is a need for additional manpower to meet a multiple increase in orders, the next moment demand falls and a rapid adjustment is required.
Fluctuations in workload are not uncommon in manufacturing and logistics companies where the physical presence of the workforce is unavoidable. For example, production lines may need extra pairs of hands quickly to meet a sudden boom in orders. However, when the workload decreases, the need becomes lighter and the desire would be to quickly reduce the number of workers. It is precisely in these situations that traditional workforce management solutions may not offer the flexibility needed.
Current partners often come with restrictive conditions: minimum staffing periods, rigid contracts and fixed staffing levels, leaving little scope for rapid change. For example, many companies have to pay contractual penalties if the need for labour decreases and they want to terminate the contract early. At the same time, this means that costs remain high even if the actual workload is reduced.
Today, the quickest to adapt wins
Businesses need partners who can be flexible and offer solutions that provide certainty. Workforce planning is no longer based on a fixed, long-planned model. Thanks to data and faster changing needs, workforce planning is nowadays done only a week or two in advance, and on a daily basis, workforce needs can vary by orders of magnitude. How do you manage your business with such a need for flexibility?
Workers in the EU who have little flexibility in their working time still make up a large share of the workforce. 2022. Data for 2010 show that only 13.1% of workers in Europe have the flexibility to set their own working hours. This shows that many companies and their labour market partners have failed to adapt quickly enough to change, sticking to old rigid models.
But for businesses that need to respond quickly to changing workloads, this flexibility is not a luxury, it’s a matter of survival. For example, shutting down a production line due to a lack of workers can lead to significant losses, while keeping an overstaffed workforce leads to high costs. Here there is a need for a partner who can provide solutions on a daily basis and quickly, without incurring high contractual penalties or long-term liabilities.
Statistical evidence and reality
In Europe, the use of flexible working has become increasingly important, especially among younger workers who expect more control over their working hours and location. For example, 73.4% of self-employed and only 26.6% of salaried workers said that they find it easy to take time off at short notice, suggesting that companies that rely on traditional workforce models do not offer enough flexibility. Numbers like these should also make any HR manager wonder: can my company’s current labour rostering partner meet these expectations? A greater expectation of flexibility is an opportunity for companies to modernise their workforce planning and respond more quickly to change.
In addition, a McKinsey study shows that in Europe, automation and changing labour needs are reducing labour market demand for some traditional jobs. For example, the roles of clerical and production workers may be significantly reduced, while demand for skilled workers is growing rapidly. This means that companies will have to rapidly reassess their needs and workforce strategies to adapt to future needs. New approaches that are more flexible, responsive and manage costs more optimally are exactly the kind of partners HR managers are looking for when they feel that their current partner is no longer in step with their needs.
In a nutshell
The traditional labour market no longer meets the demands of the modern labour market. Companies that want to stay competitive and adapt to rapid change need flexible solutions that allow for optimal workforce management and better use of resources. Flexibility is no longer a luxury, but a necessary survival strategy, especially in an unstable economic environment. HR managers in companies looking for solutions for fast and flexible workforce management need to assess whether their current workforce management partner can deliver the solutions required by the challenges of the new era.