The Covid-19 pandemic and the ongoing labor shortage created by the “great resignation” has dramatically changed workforce dynamics says Keith Hausmann, Chief Revenue Officer at Globality. He shares how forward-looking companies are exploring AI and automated technologies to go beyond merely surviving to position themselves to thrive for the long-term.
Global businesses have now spent nearly two years navigating the various challenges of the pandemic. Although some of the fallout was predictable, the dramatic impact we have witnessed on the global employment market was more unexpected. Companies that were already adjusting to new ways of working now find themselves in the middle of arguably the worst employment crisis in modern history—a phenomenon known as the Great Resignation.
In the United States alone, four million people quit their jobs in August last year. An additional 2.5 million people retired during the pandemic. This left companies scrambling to keep their operations running smoothly—a complicated and complex challenge made all the more difficult by the prevailing supply shortages and the specter of further shutdowns caused by the pandemic, as well as the ongoing changes we have seen in the workforce over recent years.
Embracing Technology to Reimagine Operating Models
Although the current situation is causing further uncertainty for businesses, it’s worth remembering that every crisis is also an opportunity to reassess and transform processes and practices for the better.
The COVID-19 pandemic mercilessly exposed flaws in global value chains, calling into question how organizations sourced, where they sourced from and where their risks were. Companies had to look hard at their operating models and consequently identified a clear need to utilize new technology to build greater resilience and adaptability in their procurement processes.
Cumbersome and disconnected legacy systems that were already struggling to cope before the pandemic were unable to supply the right type and volume of information to support informed decision-making. Companies scrambled to confirm whether their current suppliers were able to provide the goods and services they needed. In many cases, they had to quickly find alternative, qualified businesses to take the place of trusted providers.
Now, as the global economy stabilizes and organizations start to focus on growth again, businesses are using these innovative technologies and digital solutions that enabled them to survive the early days of the pandemic to build their future operating models. The need to weather the storm remains pressing, but so does the requirement for companies to focus on tomorrow.
Dealing With the Labor Crisis
For businesses caught up in the Great Resignation, this new technology also offers hope. The ongoing labor shortage is creating a real sense of urgency, forcing many global enterprises to increasingly rely on outside vendors for what were previously core business services. As the workforce of the future continues to evolve, this trend is unlikely to stop. And without a strategy in place, companies are finding it increasingly difficult to find the right people.
Innovative digital technology solves this problem, enabling companies to scale quickly and take advantage of fast-changing markets without having to recruit large numbers of new employees. At the same time, cutting-edge platforms and solutions can also help attract today’s workforce, which expects a seamless, consumer-like experience in their professional as well as personal life.
Similarly, using AI and automation to digitize outdated analog processes frees up time for the workforce to focus on more human tasks such as problem-solving, supplier collaboration and product innovation.
And with today’s workforce increasingly reassessing what they look for in a job, there is more emphasis on corporate purpose. The way a company spends its money can impact its ESG strategy more than anything else, and this creates a unique opportunity for companies to employ cutting-edge digital technologies that both drive their profitability and help build a fairer, more sustainable global economy.
Surviving and Then Thriving
As a function, procurement’s core responsibilities have traditionally included optimizing costs, delivering value and creating strong networks. Previously, the use of AI and automation has been limited to product-based spend categories or simple transactions. Yet with advances in AI, it is now possible for procurement to tackle more complex processes and categories of spend. Areas such as consulting, marketing, tech and professional services are often ambiguous, and they present challenges because their outcomes are qualitative, outcome-based and often evolving.
Procurement has a critical, tangible impact on company performance, and adopting innovative digital technologies can help guide organizations through current workforce challenges, such as the Great Resignation and unprecedented shortage of talent, and then build long-term agility and resilience into their operating models and processes.
Using these uncertain times as a catalyst for innovation and digital transformation will position businesses to successfully navigate future disruption while accelerating growth and long-term value.