EMEA Report

“We are using contingent talent to acquire skills that we don’t already have within our business”

How European firms are preparing for a post-pandemic future

As of early July 2021, European countries had, on average, given about 70% of their populations at least one vaccination shot. With much of the population on its way to being fully vaccinated, business leaders are now moving on to what the post-pandemic workplace will look like, and how they can improve the agility of their workforces.

For many, the picture is complicated by the sense that the shift to remote working has offered benefits for both employees and businesses as a whole – but requires a change in approach to be successful in the long term.

New global research from KellyOCG shows that a clear majority (64%) of executives in Europe say remote working has positively impacted employees’ ability to innovate, generate new ideas, and collaborate, and that it has increased their motivation and engagement (69%). Moreover, 63% say it has improved employees’ sense of community and belonging to the organization.

Partly owing to these positive outcomes, the pandemic looks set to change the workplace permanently. “I don’t think it’s going to go back to every business wanting all their people in the office full time,” says Sam Smith, Vice President and Managing Director of the EMEA region at KellyOCG. “I think hybrid is a good way of thinking about it. This is a fantastic opportunity for businesses to create a stronger employee experience and boost the productivity of their workforces – but they will need to give careful consideration to how they can do this in an inclusive and sustainable way.”

Our research bears this out. Nearly two-thirds of European firms (61%) say they plan to adopt a hybrid model of working after the pandemic. This is slightly more than other regions (58% in Asia-Pacific and 57% in North America). A further 8% say they expect most employees to work remotely as standard. Only 28% of European firms say they expect the vast majority of employees to return to the office on a permanent basis.

However, in order to make the new arrangements work and derive maximum benefit from them, companies will have to rethink their workforce mix and how they source, manage, and motivate talent. And, given that this talent is likely to be both more widely dispersed and more frequently contingent, leaders will have to become adept at using technology to engage employees, as well as monitor skills and performance.

¹ https://www.nytimes.com/interactive/2021/world/covid-vaccinations-tracker.html

The survey results imply that many organizations are not yet ready to address these challenges: 39% of European firms say they lack visibility of the best mix of talent they require across business areas; 33% say their workforce lacks the soft skills the organization needs to achieve their business objectives, and 31% say the same about key technical skills; 27% say that their current workforce has skill gaps that they do not know how to fill.

At the same time, most European executives agree that to manage their workforces effectively over the next two to three years, they will need to develop new capabilities. As much as 65% say they will need to improve their visibility of talent across both permanent and contingent workers; 66% state they will need to determine the optimal mix of permanent and contingent talent; and 61% say they will need to adopt talent-management platforms that enable them to manage both permanent and contingent talent.

Vanguards lead the way

Looking at the global data, a group of leaders emerges. While other companies are struggling to adapt, these ‘Vanguard’ firms – accounting for about 10% of the cohort – actually saw improvement in the wellbeing and productivity of their employees over the course of the pandemic. Moreover, the vast majority of them (94%) say that their revenue grew over the past three years, compared to just 36% of ‘Laggards’ – respondent companies that report a decline in employee wellbeing over the past year.

They also take a longer-term, more strategic approach to improving the resilience, agility, and wellbeing of their workforces compared with the Laggards. Vanguards are much more likely than Laggards to say that remote working has increased employees’ ability to innovate (91% vs 52%). They also say it has made them more open to using new technologies (87% vs 53%) and improved employees’ productivity (90% vs 48%).

What Vanguards do differently

Vanguards create a more agile and resilient workforce by focusing on four key dynamics.

#1 They welcome workforce fluidity

Vanguards are proactive in adopting strategies to bridge skill gaps, understanding the skills they need, and making use of contingent labor.

In general, however, firms in Europe have some way to go to accommodate workforce fluidity. A slightly underwhelming 41% of European firms responded to the pandemic by employing more contingent talent than normal, 7% fewer than the global average. And only 39% are focusing on upskilling and reskilling their permanent talent, 10% fewer than the global average.

“Historically, our approach to acquiring talent has been quite siloed, with individual aspects managed by different functions across the business,” says Maurice Benz, Global Category Manager for the external workforce at Swiss-based pharma firm, Novartis.

“Our goal now is to implement a much more integrated approach that harnesses strategic workforce planning, predictive analytics, the up- and re-skilling of internal talent, and the use of contingent labor, where appropriate. Operating a more holistic approach to workforce management is key for us.”

He goes on to explain that the firm also views contingent labor as a way to increase the capability of the workforce: “At Novartis, we use contingent talent to manage peaks in demand, but also to acquire expertise that we don’t currently have within our business.”

#2 They are proactive about improving the employee experience

Vanguards prioritize improving the employee experience, on the basis that this will, in turn, improve their productivity and benefit the firm’s ability to engage and retain workers. Almost all (91%) of Vanguards agree that improving the employee experience is as important as improving the customer experience.

European firms are slightly ahead compared with the global average when it comes to improving some aspects of the employee experience. When asked to rank the initiatives they are prioritizing to improve the employee experience, top of the list for European executives is offering better-quality management training (33%, compared with 28% globally). The second biggest priority was strengthening their organization’s commitment to sustainability (30%, compared with 25% globally).

Companies have offered employees various benefits to alleviate the impact of the pandemic. European companies are fractionally more generous when it comes to offering additional paid time off during the pandemic than the global average, with 25% saying they offer it compared to 23% globally. They are also slightly more generous when it comes to offering employees support with childcare or caregiving during the pandemic (such as additional time off or financial support for childcare), with 38% offering it compared to a global average of 35%.

European firms are behind the global average on most other benefits, however. They are marginally less likely than the global average to offer training on essential new skills that have become critical as a result of the pandemic (42% compared to a global average of 47%); more flexible working opportunities such as flexible hours (41% compared to 45%); physical health support (36% compared to 39%); or mental health support (30% compared to 36%).

“We are always trying to enhance the employee experience,” explains Anthony Allen, Senior Director of Talent Acquisition for Toyota Motor North America. “Covid-19 only accelerated this and some will continue working remotely at some cadence.”

For example, thanks to a new ‘Ask HR’ platform, instead of having to call their HR rep every time they have a question or need information, Toyota employees can just interact with the automated tool. The tool was developed using an agile methodology, with extensive feedback from employees, to ensure it delivers a consumer-grade experience.

“Initially, it was rolled out to answer questions about Covid-19,” Allen says. But Toyota quickly saw the value in providing employees with real-time access to information, and has since expanded the tool to cover benefits and is adding content on other popular HR topics. “We want to provide our employees with the same outstanding experience we deliver to our customers.”

#3 They act on DEI

As we have covered elsewhere in the report, Vanguards have a good record when it comes to implementing DEI measures. As much as 94% have implemented programs to support the career progression and development of women and the same percentage have put in place a clear route to report discrimination. Fully 89% have programs to support the career progression and development of talent from underrepresented groups and 91% have hiring and promotion goals in place for women and talent from underrepresented groups.

European companies have some ground to make up in these areas, and score marginally behind the global average on many aspects of DEI. Around 70% have programs in place to support the career progression and development of women (compared with a global average of 78%), and 69% have programs to support underrepresented groups in the same way (compared to 74%). A relatively modest 72% have hiring and promotion goals for underrepresented groups (compared to 76%), while 73% have them for women (compared to 80%). Only 76% say their company has in place a clear route for employees to report discrimination at work (compared to 82%).

Smith cautions that the region is vast and diverse, and firms seeking to say the right things here need to take local context into account. “There isn’t a continuum or a consistent message that a multi-country organization can deliver,” she says.

“When you are a multi-country organization, your definitions of DEI have to accommodate different cultures,” Smith adds. “For example, the way we can speak to LGBTQI content in the UK is very different to how we speak to it in Russia. And, maybe also soon, very sadly, how we speak to it in Hungary. To take another example, Switzerland continues to be a very traditionally misogynistic environment, so the way you speak to diversity and equality there has to be adjusted to have a chance of being effective.”

#4 They use technology to manage a workforce in flux

Vanguards show how important it is to use technology to support both permanent and contingent workers. Fully 94% agree that it is their responsibility to ensure employees have the skills to adopt new technologies quickly.

On this front, firms in Europe have some way to go to catch up with the global average; 61% say it will be important to use talent management platforms to manage both permanent and contingent talent, compared to a global average of 72%. For Vanguards, it is 84%.

Only 61% of European firms say it will be important to use predictive analytics to determine their future talent requirements. This is a little behind the global average of 69%, and some way behind Vanguards, at 84%.

Only 30% of European firms use technology to manage their remote workforces, compared to 38% globally. European firms are more in line with the global average when it comes to using technology to manage freelance and contract talent, however: 31% of European firms say they do so, broadly in line with the global average of 32%.

As the below chart shows, only 30% of European firms use technology to manage their remote workforces, compared to 38% globally. European firms are more in line with the global average when it comes to using technology to manage freelance and contract talent, however: 31% of European firms say they do so, broadly in line with the global average of 32%.

“The tools we use to support our employees in the virtual work environment include not only collaboration platforms, but also relationship and networking platforms,” says Heidi Gerhard, Head of Talent Strategy at multinational chemical company BASF. “We are now looking to develop a team-effectiveness tool that identifies the unique work preferences of each employee, their communication style, and their approach to virtual or remote working. The goal is for the tool to provide insight and perspective for both the team leader and the individual team members to optimize their ways of working across the organization.”

Following the Vanguards

It is clear that firms will need to manage and motivate employees and contingent workers differently in the post-pandemic future. The Vanguard companies show that understanding how to engage remote, flexible, or contingent workers is now a key capability. Firms in Europe are facing in the right direction but currently have some way to go to match best practices when it comes to talent fluidity, the employee experience, DEI, and technology-enabled workforce management. Like the Vanguards, they must ensure they anticipate the changing nature and needs of their workforces and put in place the provisions that will be necessary to make their employees’ work environments, however widely dispersed, both viable and attractive.

“We recognize that the shift to remote working is going to drive a competitive advantage for us in terms of how we attract a diverse talent pool,” says Gerhard. “For example, not being confined to a particular geographic area for recruitment and not requiring talent to be on site every single day creates an opportunity for us to access new talent, new perspectives and, ultimately, innovation.”

Perhaps Europe as a region – across which there has always been a great deal of mobility – has a potential advantage: firms are often already accustomed to dealing with a large variety of languages and cultures. The key in the next few years will be to extend that advantage to working effectively with a variety of working styles, statuses, and locations. The Vanguards offer an effective blueprint for European firms to follow for future success.