The Overlooked Solution to Labor Shortage

We’re yet to see the impact of Generative AIs like Dall-E and Chat-GPT on the future job market.

However, here and now, the Western world is dealing with a persistent labor shortage. There is a lack of nurses and doctors to meet the rising demand for care. This summer, flights were canceled due to a lack of airport staff. There is a plumber shortage, a soldier shortage and a shortage of engineers to deliver the green transition of our infrastructure.

It’s a question of demographics; The generations leaving the job market are larger than the ones entering it. The U.S. Chamber of Commerce estimates that there are 3 million fewer Americans working today compared to 2020. That leaves only 5.7 million unemployed to fill the 10 million job openings. In my native Denmark, 33 % of all companies report a labor shortage. In Germany, Europe’s biggest economy, it’s more than half.

Companies can’t meet the growing demand and will have to reject deals due to lacking capacity. We’re missing out on growth.

We can deal with this in multiple ways. Migration could work if the public mood allows it. We can try to make people work more; scrap some public holidays, force the young to join the workforce earlier and the elderly to stay longer. Tech can solve a large part of the problem. We can automate more tasks and apply more bots. And then, we can increase our productivity with sticks and carrots. We can be bossier, invest more in employee satisfaction, experiment with 4-day work weeks or whatever works.

Related: How Leaders Can Beat the Labor Crisis

The EverythingOps movement

An often overlooked solution is what I call the EverythingOps movement. In the past few years, modern tech companies have relied heavily on ops teams to streamline internal processes, optimize workflows and embed the strategic goals of the company in all parts of the company.

We’ve seen DevOps teams deliver new products at high velocity. We’ve seen RevOps teams creating more efficient workflows in the commercial departments. And we’ve seen LegalOps teams turning legal departments from cost centers into value creators. All these ops movements have in common that they use technology and data to optimize processes and drive workflow efficiency in busy organizations. They break down silos and force every function to contribute to the commercial goals of a company.

They’ve been incremental through the bull run as they help scaling organizations to stay on track, and they’re maybe even more important to ensure cost-effectiveness in a bear economy. With that in mind, I also see the following three ways the ops philosophy can help companies with a low labor supply.

The revenue mindset

Historically, the legal department has been a cost center focused on risk mitigation and compliance. However, modern legal departments generate revenue and contribute to the commercial goals of the company. They automate sales contracts, so the reps get more time on the floor. They streamline commercial terms to shorten sales cycles and increase growth rates. And they use technology to identify opportunities in existing contracts.

As silos break, the distinction between commercial and service organizations becomes blurry. Applying the ops mindset to the legal function has revealed its capacity to unlock growth and increase revenue.

Related: Apple Makes Major Moves to Combat Labor Shortage

Efficiency goals

While service functions must begin to support the revenue targets of a company, the commercial teams must optimize for efficiency. Operations teams have always been used to streamline internal processes and ensure that every part of a company operates smoothly.

The RevOps movement has embedded this philosophy deeper into commercial teams and at a much grander scale to drive revenue growth. Modern commercial teams are trimmed and well-oiled machines augmented by workflow automation. They leverage digital technologies to make data-driven decisions, and they apply the RevOps approach that works holistically with the entire customer journey.

Data and tech

The main reason that the EverythingOps movement comes at this moment in time is the current state of tech:

1. Digital technologies have enabled organizations to become much more data-driven. It’s never been easier to track and analyze a performance which creates a foundation for more informed decisions.

2. We’ve seen a new wave of workflow automation software that makes the ops function much more effective. Operations teams have a higher chance of making a difference today than they had before.

3. All these new digital products have created a need for synchronization. We need ops more than ever to ensure all departments are aligned and use digital technologies to their advantage.

Related: US Businesses Turn to Automation Amid Labor Shortage

The EverythingOps movement has been successful in larger corporations and the most modern and innovative companies, but we are still far from mass adoption. Too many companies are yet to benefit from the RevOps approach, and the LegalOps approach is niche. Most companies — large and small — have unnecessary silos to demolish and workflow automation to implement.

In other words, EverythingOps can secure some of the productivity and efficiency gains we need to secure growth in a tight labor market.