Is Your MSP Ready for Life After COVID-19?

The COVID-19 pandemic has turned global economies and labor markets upside down more suddenly and sharply than anything I’ve seen in my career. With thousands of businesses closed and millions of workers ordered to stay home, EU executives predict that the region’s GDP will contract more than 7%, marking the worst downturn since the 1930’s.[1] Companies have made (and will continue to make) difficult decisions in this state of flux. Even as some businesses in pharma and essential consumer goods scramble to meet sudden spikes in demand, other businesses in more vulnerable industries are decreasing their workforce or struggling to regain traction. Now, fast forward to 2021, the European Central Bank (EBC) anticipates a recovery in Eurozone GDP of between 4 and 6%[2]. Agility is no longer a buzzword; it is a business imperative. Companies across Europe need to be ready to make rapid adjustments on short notice—and that applies to adjusting talent strategies as well.

How will you adjust your workforce strategy after COVID-19? Three questions can help stress-test your current approach and prepare you to weather the next new normal.  

Is your workforce strategy flexible enough?

Managing a workforce across Europe can be challenging even in the best of times, but the current pandemic has driven that point home. A new McKinsey model provides a useful framework for considering COVID-19’s impact.

When applied to talent strategy, these five “horizons” are far less linear than we would like to believe. The irregular and unpredictable nature of the COVID-19 pandemic means we will probably leapfrog over some steps and loop back to others, requiring extreme flexibility as our journey unfolds in the next 12-18 months.  We’re already seeing this pattern emerge. Each country and locality has imposed its own restrictions, reopening rules, and timelines. While the UK shuts down under a fresh surge of COVID-19 cases, countries such as Germany, Austria, and Italy are debating the right approach to reopening their economies––and making contingency plans for shutting back down as needed.

The implications for workforce management are complex. In April, we met with a client in the food processing industry to discuss forecasting for our MSP to meet an increase in production needs. When the pandemic hit, the client closed a factory in one European country almost immediately. However, they kept their production open in another, only closing for a few weeks to realign their safety and production strategy to ensure compliance with new government regulations. Now, as restrictions ease and much of Europe begins to reopen, the client is weighing their options again. Similar stories are playing out across the region as multinational companies find themselves flexing their workforces at a very local level.

While the steps are non-linear, a well-designed MSP should help you quickly adapt and make smart data-based decisions along the way. In the early stages, an MSP provides visibility into the number, location, and cost of contingent workers. It then effectively off-boards them to align with declines in demand, and manages suppliers to quickly access talent where demand is spiking. As you return to “normal,” your MSP should be flexible enough to ramp up your workforce in the skill sets and locations you prioritize, when you need them. Acting as a trusted advisor, they should help you reimagine your workforce moving forward––not only ensuring compliance with new regulations, but also rethinking how work is done and by what type of workers (full-time, contractor, temp, etc.). It’s a holistic approach that requires an agile MSP partner, ready and able to adapt to fast-changing business needs.

Are you maximizing the value of your MSP?

Returning European businesses to operational health will prove challenging. Just as global product supply chains were disrupted across multiple geographies, the talent supply chain was equally impacted. The process of rehiring, recruiting, retraining, and retaining talent in the post-COVID work world will need to be more effective than ever as businesses seek to quickly start recovering much-needed revenue.

This is no time for an old-fashioned, hands-on MSP.

It’s time to hand off the workforce management—and the work outcomes—to a trusted partner so you can focus on reviving your business, re-engaging your customers, and revising your go-to-market strategies. After all, how can you gain a holistic overview of supply and demand planning if you have two different sets of data and inputs rather than one centralized view? If the MSP isn’t actively managing your supply base, how are they able to deliver the strategic value your business demands? Do you truly have the technology tools to manage your workforce more effectively and efficiently than an MSP?

Companies that maintain internal teams to manage an MSP may find themselves sabotaging their own success by diminishing key value drivers an MSP partner can provide:

• Managing supplier relationships and performance, using a combination of strong relationships and powerful technologies to assume responsibility for creating a talent pool and securing access to the workers you need, when and where you need them. 
• Improving visibility into program data and costs, so that when disruption demands action   you’re able to make rapid decisions based on facts, not fear.
• Staying ahead of regulations to reduce risk, which will be especially critical as countries and localities in Europe adopt new measures to protect workers.
• Constantly refining the program to meet long-term business goals, meeting your needs today while keeping an eye on how your future talent needs will evolve.
• Streamlining communication between hiring managers and suppliers, so that your teams are able to focus on your core business and get the talent they need quickly and efficiently.

Is your talent strategy ready for ongoing disruption (beyond the current pandemic)?

During a crisis, it’s natural to focus on the urgent needs of today. The trick is to not forget that tomorrow is coming whether you’re ready or not. European industries were facing dramatic disruptions before anyone had even heard of COVID-19. Acute talent shortages, rapid advances in technology, the growing power of artificial intelligence, the shifting regulatory environment—all will still be there on the other side of this pandemic, and will be just as disruptive as they were before. That’s why I’m always counseling clients to look through the windshield, not the rear-view mirror; and it’s why McKinsey includes “Reimagination” as one of their five key stages. Leaders must be constantly preparing for what’s next and embracing new ways of operating.

If there’s a silver lining to be found in this global tragedy, it may be that the artificial barriers to innovation we placed on ourselves have largely fallen away. The “we can’t” or “we never” went out the window as a result of how quickly businesses needed to transform. Companies that had a policy of everyone always being in the office learned they can succeed with a remote model. Organizations that were averse to leveraging new technologies and automation found these tools enabled safety, efficiency, and cost savings. Firms that had to downsize their full-time workforce are discovering the benefits of leveraging a flexible, contingent workforce that ebbs and flows with demand. We can’t afford to lose these “agility muscles” when the current crisis has passed. The ability to quickly adapt will be critical to weathering future disruptions in the world of work.

Ultimately, the “new normal” will require MSPs to connect to future demand. This new requirement can take many forms: leveraging data analytics to drive effective workforce planning; identifying the skill sets your business will need to achieve its goals; forecasting the availability of qualified talent; anticipating the market dynamics that impact hiring costs. For example, we’re having forward-looking discussions with a client in the food manufacturing industry in Germany who is preparing for an SAP implementation next year. We anticipate we’ll need 100 resources across different skill sets. How will we prepare for this peak in demand? Is there a talent shortage? What is the rate for the in-demand roles? Is that talent available locally, or do we need to look broader in other regions/countries?

The more we can predict future demands, the better we can connect supply base to that demand. We can start engaging workers and building a talent pool now through our Talent ETL platform so we know those skills will be there when we need them, whether on a full-time or contingent basis. Given the current crisis, we’ll need to layer COVID-19 implications on top of our assessment and continue to refine our approach as the go-live date draws closer. It’s a dynamic approach that—like the future itself—is always changing.

Looking Ahead

No one can be certain how the COVID-19 pandemic will play out, how long it will last, or how deeply it will impact Europe. What is certain is that disruption and change will continue to reshape how and where people work, and how companies manage their workforces. The new normal for MSP programs will entail increased agility, more strategic client/provider partnerships, and a forward-thinking approach that prepares for what’s next…whatever the future may hold.

[1] https://www.cnbc.com/2020/05/06/coronavirus-european-union-to-contract-7point5percent-due-to-the-pandemic.html

[2] https://atalayar.com/index.php/en/content/ecb-anticipates-recovery-eurozone-gdp-between-4-and-6-2021