Exploring the roots of today’s talent crises - and how companies can cope

As summer gave way to fall, the threat of an energy crisis took center stage across Europe. In July, European Union countries agreed to voluntarily cut demand for natural gas by 15% in an effort to avoid mandatory energy rationing come winter. By September, German energy prices clocked in more than 40% higher than one year prior—and they continue their skyrocketing ascent. And in her first days as Prime Minister, the UK’s Liz Truss announced plans to limit household energy bills to prevent greater economic fallout.

All of this is happening against the backdrop of growing inflation. In September, Germany’s inflation rate hit 10%. Just a month prior, Goldman Sachs warned that the inflation rate in the UK could top 22% in 2023, leading to a 3.4% decline in the UK’s GDP if energy prices keep climbing higher.

Across the board, the situation seems dire—if not desperate. And it’s not even winter yet.

While it’s easy to link today’s economic conditions with present crises, in reality, the situation is far more complex. AgileOne’s Workforce Solutions Market Overview, Edition 4 offers a deeper dive into the economic conditions impacting Europe along with solutions that will help companies weather the latest challenges.

Today’s economic crises are rooted in the pandemic—and beyond

Like much of the world, European countries spent most of 2022 facing a historically tight labor market. The average unemployment rate among EU 27 countries dipped to 6 percent in July, surpassing the periods leading up to both the 2008 and 2020 recessions. Meanwhile, the continent’s average job vacancy rate approached 3 percent in the first quarter of 2022, making it tough going for companies in need of workers.

While global events like Russia’s war in Ukraine have upended the economy, the seeds of economic disruption were sown long before this year.

Beginning in 2016, the UK’s decision to leave the European Union set in motion a series of events that experts blame for causing a reduction in trade openness, foreign direct investment inflows, and immigration growth. By 2018, a decade-long decline in immigration steepened, leading to a situation where the loss of EU-born residents from the UK is now outnumbering new arrivals each year. In Germany and the Netherlands, the growing share of retirees that began in the 2010s is continuing to accelerate, leading to a situation where the number of people aged 67 or over could increase by as much as 22% by 2035. All of these factors have one thing in common: they reduce the size and diversity of the European labor pool.

Then, in 2020, COVID-19 hit Europe. Though the pandemic initially drove demand into the ground, the global recovery which followed saw demand significantly outpace supply. This drove up the cost of goods and made it harder for employers to find enough workers to meet society’s needs. As a result, inflation soared, leading to the predicament most companies find themselves in today.

In times like these, unconventional thinking is needed

Today’s challenges call for unconventional thinking. AgileOne’s Workforce Solutions Market Overview, Edition 4explores the latest buzzword in the world of work: talent mobility. Defined broadly as the movement of employees between positions to meet a company’s needs, talent mobility allows companies to constantly review and adapt their workforce as conditions change while empowering employees with new skills.

This is a win-win for both employees and their employers.

Countless studies have shown that happy workers are more productive and more likely to stick around. This leads to less attrition, which allows companies to retain and grow their talented workforces amid conditions where quality workers are in short supply.

At AgileOne, we help companies of all sizes gain critical insights into their workforces. Leveraging dedicated on- or off-site support teams, we help companies identify end-to-end solutions to address knowledge or skills gaps, with AgileOne taking responsibility for training—and retraining—workers when it’s needed. This allows companies to improve compliance, control spend, and gain enterprise-wide visibility into their most valuable resource: their human capital.

Download AgileOne’s Workforce Solutions Market Overview, Edition 4 now!

Top five takeaways:

1. Record job vacancies are hurting global economies: The causes are complex and not only limited to disruption caused by the pandemic. Other factors include slow growth in the working age populations of some economies, a global shift in geopolitics that is sealing off job markets from immigrant workers, and a growing share of workers who lack the skills needed to fill scores of unfilled positions.
2. To stay ahead, companies must embrace talent mobility: Talent mobility describes the movement of employees between positions to meet a company’s evolving needs. Companies that implement talent mobility strategies are in a better position to attract skilled talent and curb attrition.
3. Talent mobility comes in many forms: It includes reskilling, upskilling, and hiring for skills. These strategies offer many benefits for companies, allowing them to constantly review and adapt their workforce as conditions change while empowering employees with new skills that keep them happy, productive, and sticking around.
4. AgileOne can help: Leveraging our award-winning suite of technologies and services, AgileOne is equipped with the tools to help you reduce risk and drive cost savings. This includes our managed services program (MSP), which allows companies to gain critical insights into their workforces.
5. Consider contingent—a flexible option for uncertain times: Contingent arrangements, like those offered by AgileOne, can provide long-term value for companies that recognize the potential for these workers to adapt to their evolving needs.