Industry is better prepared for the post-crisis era

In early April 2020, French tyre giant Michelin announced that it would be starting to manufacture masks. No, the masks weren’t cut from grooved rubber! The prototype was designed in partnership with the CEA (french Atomic Energy Commission) and developed and tested in just a few weeks, with the support of specialised SMEs, before rolling out full-scale production. In the space of a few days, sewing machines replaced big machinery for many workers serving as volunteers. Another plant that reorganised itself in a short space of time to make up for an urgent shortage was Givenchy (LVMH), which set about producing hydroalcoholic gel.

These are but two examples of how responsive the industrial sector can be. They are symbols of need, but also of the concrete implementation of solutions to the health crisis. I believe that industry may be better equipped than other sectors to emerge from the crisis. Of course, the sector was also seen as a worrying barometer of the health crisis, as successive plant closures marked the inexorable progress of the pandemic. In addition, the shutdowns of chinese factories highlighted the severe reliance on producers of raw materials for its medicines. However, the industrial sector has two key assets for the post-crisis period:

• Its preparedness for difficult situations
• The way it is already thinking about the human resources of the future

A perpetually-adapting sector

Many industrialists were already familiar with managing plant shutdowns, activity slowdowns and reorganisations, etc.

What crisis? It’s just business as usual (or almost) for industry! Relocation, de-industrialisation, de-structuring and other difficult buzzwords have already forced many companies to question their models, think of a new division of labour and constantly face up to increased competition and economic, environmental and social uncertainties. Many industrialists were already familiar with managing plant shutdowns, activity slowdowns and reorganisations, etc. Admittedly, the current crisis is on an unprecedented scale, but industrial players already have practices and mechanisms to guide them and are therefore one step ahead of other, more protected sectors.

Another aspect of the sector’s preparedness for the post-Covid era is digital transformation. For years, industrial companies have had no other choice than to digitalise their production systems and move to the so-called “Industry 4.0” to remain competitive. This new industrial revolution is driven by tools such as robots, connected systems using artificial intelligence, etc., which of course implies thinking about security and data processing. While the current crisis is leading to the acceleration of these processes or their roll-out in other areas of corporate activity (e.g. teleworking for support functions), once again, industry is ahead of the game. What’s more, major players have already begun to organise themselves collectively.

This preparation of the sector is based on one factor: people as a key resource.

4 questions for managing key human resources in industry

If people are so central to post-crisis preparedness in industry, how can these key resources be managed? The sector was already engaged in crucial reflections on how to value and deploy human resources. The digital transformations already underway are inextricably linked with questions about work methods and workplaces, forms of organisation and the skills required to support these changes.

1. What are the skills of the future?
   Will workers in the factory of the future have to increase their skills (upskilling) to become “4.0” operators moving into collaborative, analytical or even augmented mode, or will tasks be less demanding in terms of knowledge (deskilling)? There are necessarily several answers to these questions. We must also think about the technical skills that are inseparable from digital transformation (e.g. data management, analysis and security), not to mention maintaining certain manual skills; the challenge is to acquire these skills, which are rare on the labour market, or to nurture them internally.
2. How do we manage these skills in the future?
   Once we have identified the strategic skills we will need, we need to manage them! Human resource management roles appear to be even more strategic in attracting recruits, developing them, and possibly helping them to remain employable to work elsewhere afterwards. We must therefore continue to reflect on the management of the workforce, not only quantitatively, but also qualitatively. This applies both to the furlough working schemes introduced in the spring of 2020, and to the measures taken since.
3. What adjustments should we plan for?
   We need to implement a human resources management policy, of course, but intentions and promises are not systematically matched by employees’ practices and experience. In the course of my research into digital transformations in factories, I noted discrepancies explained in particular by excessively centralised, short-termist organisational arrangements, or by the diversity of profiles. Are these gaps inevitable today, when management decisions are taken to deal with the crisis? Not necessarily, if differences in translation and appropriation by the actors can be anticipated from the outset, and if material and immaterial resources are provided to support these changes. Above all, instead of thinking that these changes should mark a break with past actions, it would be better to approach them incrementally, accepting trials but also errors, and therefore the need to adapt.
4. What are the roles for HR?
   Finally, the HR function plays an even more crucial role in the post-crisis perspective. Industry 4.0 was already questioning the role and outlook of the HR function. Managing the crisis with its procession of furlough, remote working, new work organisations or even repatriation has only strengthened its place and its strategic positioning for the future of these industrial companies.

Workers are central to these challenges, both in terms of preserving their health and their activity; they are therefore a key resource that is central to the changes needed to emerge from the global crisis, a resource whose management must be rethought. And although industrial companies, or at least some of them, have already asked themselves the right questions, it is now time for all of them to do so.

This article is based on the impact paper Géraldine Galindo wrote as part of ESCP Business School’s “Managing a Post-Covid19 Era” series.