How focusing on skills helps European manufacturers address labour shortages and increase productivity

  • Blog
  • 4 minute read
  • December 17, 2024
Michael Goedegebuure

Michael Goedegebuure

Director Workforce Strategy, Transformation & Technology, PwC Netherlands

three workers in white helmets and reflective jackets having a discussion in a warehouse

Talent has become a top priority for manufacturing companies. As the existing workforce in the European Union is shrinking, organisations face competition from other industries to attract and retain younger generations of employees. Currently there are 32 million employeesOpens in a new window working in the manufacturing industry in Europe, 32% of that population is between 50 and 64 yearsOpens in a new window and expected to retire in the coming 10 – 15 years depending on country and on local pension laws.

Manufacturers need skilled labour to drive innovation across products and processes. To reach that goal, they need visibility into the skills their organisations already possess and the ones they need, to know where to recruit, train, and develop employees.

As our article about how a skills first strategy and AI are helping CHRO's points out, manufacturing industry leaders are pivoting to a skills-based approach to help them adapt to the new challenges of today’s labour market.

Manufacturing CEOs and CHROs encounter considerable challenges, including workforce shortages, increasing material and energy costs, and pressure on salary, all of which affect profit margins. Additionally, there is instability in the supply chain and increased demands for regulatory compliance.

The skilled labour market enables manufacturers to be more agile and swiftly adapt to changes in market conditions. By focusing on competencies and growth potential, manufacturers can assign tasks based on actual capabilities rather than traditional job roles, resulting in more efficient business operations.

Moreover, skilled labour facilitates innovation in the continuous drive to automate and utilize advanced machinery. The highly skilled workforce necessary for rapid innovation and maintaining competitiveness is cultivated through an emphasis on individual skills.

Ultimately, a skilled labour market supports workforce planning processes by identifying individual skills and certifications, allowing manufacturers to effectively plan for their future workforce needs. This ensures that the appropriate skills are available atn the right time, thereby enhancing overall productivity.

Driving productivity improvements through AI and automation

Technology is playing a critical role in helping human resources (HR) teams gain better workforce insights and focus on their skills architecture. Oracle Fusion Cloud Human Capital ManagementOpens in a new window (Oracle Cloud HCM) is well-positioned to assist them. The platform has been a leader in the Gartner Magic Quadrant and The Forrester Wave for more than nine consecutive years and now features a new set of AI agents to increase productivity within the HR department and beyond.

Benefits for your workforce

The new AI agents in Oracle Cloud HCM help organisations to:

HR Core

It helps employees to better understand company policies, help them with their pension contributions & tax calculations, ensure that the timesheets are accurate and submitted on time and generate documentation which is needed like salary statements and mortgage applications.

Recruitment & Onboarding

Oracle Cloud HCM helps to automatically find suitable positions in the organisation based upon your profile, skillset and experience to promote internal development and transfers. And after the successful completion of the recruitment process it supports the initial days of the employee with an onboarding assistant that offers information on the organisation’s policies, culture, and more.

Talent Management

Within the talent modules Oracle automatically identifies skills for roles and attaches learning recommendations which are relevant to the employee. It helps you to set career goals and build roadmaps to achieve them.

These AI tools help companies improve employee satisfaction and retention.

Benefits for managers

The AI agents in Oracle Cloud HCM benefit managers too. For example, many managers struggle to write thorough, meaningful performance reviews, especially if their teams are large. Thanks to AI agents in Oracle Cloud HCM, managers can enter key points about each employee’s performance, and the solution automatically drafts a complete performance review summary for them to check and tweak if necessary. This is a significant time-saver. A talent review assistant also aids managers in the evaluation process, offering tools and insights to help gauge employees’ performance and potential.

Benefits for HR professionals

Within the HR function, AI agents provide insights and recommendations to streamline the recruitment process and help identify the best candidates for open positions. Additionally, they help schedule shifts to ensure sufficient coverage while accommodating individual preferences where possible.

A treasure trove of data

The driving force behind all this AI is rich data about employees. It starts with the basic information captured from their curriculum vitae (CVs) and LinkedIn profiles. But the solution goes several steps further. For example, the Dynamic Skills functionality in Oracle Cloud HCM understands the skills that employees develop through certain roles and looks at which processes they work on in ERP applications and other business systems. Moreover, it analyzes employees’ performance reviews and feedback from colleagues to ensure that individuals are proficient in the skills they claim to have. This built-in rigor ensures that Oracle Cloud HCM has detailed, accurate data for decision-making and process automation.

Further innovation is underway

Oracle Cloud HCM offers rapid innovation and stringent security because the platform, data model, and underlying hardware are all provided by Oracle. This is a key reason why many manufacturing companies are adopting Oracle HCM Cloud, even if they rely on an enterprise resource planning system from a different provider.

Why PwC

PwC is well-positioned to help manufacturing companies boost productivity and efficiency using Oracle Cloud HCM. We have extensive industry-specific experience helping manufacturers worldwide implement Oracle solutions. Furthermore, we have developed pre-configured, industry-specific deployment models that automate many tasks typically performed manually, which help to reduce implementation time and cost. It decreases the risk of an implementation going off track, boosts the delivery of standardized qualitative data and supports on-time delivery. We at PwC have the experience, knowledge and tools to help your HR team support the business growth with Oracle Cloud HCM implementation.

Interested?

To learn more about how we can help you improve your HR function using Oracle Cloud HCM, please get in touch.

Authors

Michael Goedegebuure
Michael Goedegebuure

Director Workforce Strategy, Transformation & Technology, PwC Netherlands

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