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9 posts from February 2015

25 February 2015

Carmakers must decide what role to play in the lower-emission future of personal mobility

When was the last time you braved the crush and bedlam of the New Year sales on London’s Oxford Street?  For many of us, it’s a once-in-a-lifetime, never-to-be-repeated experience.  Maybe you had yours last month?

This year I had an extra reason for staying away. According to the campaign group ‘Clean Air In London’, by January 4 the levels of nitrogen dioxide in the Oxford Street area had already exceeded the legal limit set by the EU for the whole of 2015. In just four days.

Such issues aren’t limited to London – or indeed to the UK. And the good news is that positive action to address them is under way. In Europe alone, it’s estimated that more than 70 cities and towns in eight countries are now operating or preparing Low Emission Zones, or LEZs, to help comply with EU limits.

London is now poised to go a stage further, with Transport for London (TfL) having just closed a consultation on creating the world’s first Ultra Low Emission Zone (ULEZ). The deadline for submissions was 9 January. As I write, TfL is considering the 16,000-plus responses it received, with a view to making a recommendation to the Mayor some time in the spring, on whether to go ahead with the ULEZ.

Other UK cities are also taking steps, for example, Sheffield City Council has undertaken a study into the potential costs, benefits, air quality impacts, emissions reductions and timescales around introducing an LEZ in Sheffield. And as TfL continues to mull over the creation of a ULEZ, what’s clear is that improving the sustainability of personal transport and urban personal transport in particular, doesn’t lend itself to a quick or easy fix.

With action to reduce traffic emissions continuing to escalate, automotive makers need to map out the best way forward for their business. Their efforts to do this are being complicated by the need to accommodate a host of wider changes, ranging from shifting attitudes to vehicle ownership to the ageing of the population.

Take vehicle ownership. For previous generations of late teenagers or 20-somethings, owning their first car was a rite of passage. For today’s young urban adults, the downsides of car ownership – including the punitive costs of parking, road tax, traffic fines and (increasing) congestion charges, are combining with rising environmental concerns and efficient public transport to make owning a car seem far less attractive. Witness the rise of car-sharing services like Zipcar and environmentally responsible taxi services like Green Tomato Cars.

In parallel, the rising proportion of older people in the population is changing the design criteria for vehicles. The effects of this demographic shift include pushing speed and style down the list of priorities, and making attributes such as 360-degree visibility and ease of access more important.

Amid this complex and shifting environment, carmakers need to decide what role they’ll play in a more sustainable future – not just as vehicle manufacturers, but as providers of personal mobility. They must do this against a background of increasing worries over health impacts and tightening emissions regulation at a national and EU level.

Once again, the solution comes back to advances in technology. As well as developing better electric vehicles, most OEMs are now looking to make their fleets more fuel-efficient by using lighter chassis materials and more efficient transmission systems. A key goal was the requirement to reduce CO2 emissions to 130 g/km by 2015 – a target that the automotive industry achieved during 2013. But the next target of 95 g/km by 2020 will be harder to hit, especially given the backlash against diesel in much of Europe.

Going forward, newer technologies will come to the fore such as guided or driverless cars and technology-enabled sharing.  This will help to increase energy efficiency further by boosting utilisation and telematics will open up opportunities to incentivise environmentally responsible driving behaviours.

With London preparing for the proposed launch of the world’s first ULEZ, the UK is at the forefront of global progress towards the low-emission future of personal transport. All automotive manufacturers need to think hard today about their place and role in that future.

23 February 2015

As eCommerce sees logistics get personal, parcel carriers must innovate

In January this year, the cab-sharing service Uber began piloting a new logistics service in Hong Kong. Called UberCargo, it enables smartphone users to call up a van to transport items, in return for a fee based on time and distance travelled.

At first sight, UK transport & logistics companies may think developments such as the UberCargo pilot have little to do with them. But I believe such an attitude would be dangerously complacent. And unless T&L businesses innovate to secure their continued role in the end-to-end value chain, they could find themselves commoditised, marginalised and even frozen out within a few years.

Why do I say this? To explain, let me begin by looking at how T&L companies are faring in the eCommerce revolution.

Up until recently, it was assumed that the explosion in online retailing would be a licence for logistics companies to print money. With millions more people wanting parcels delivered at home, the received wisdom was that the companies handling the ‘last mile’ to the consumer would be quids in.

Right? Wrong. As the collapse of City Link underlined, eCommerce has spelt not rising profits and margins for parcel carriers, but intensifying financial and operational pressures. With consumers expecting fast, convenient fulfilment for free, retailers striving to force down fulfilment costs, and package returns rising faster than overall volumes, logistics companies are being squeezed on multiple fronts.

Add in the shift towards retailer-controlled models such as click-and-collect – together with the rapid emergence of collection-point networks such as Network Rail’s Doddle joint-venture and the ‘Pass my Parcel’ newsagent-based service from Amazon and Smith News – and it’s clear that the established logistics companies have anything but a clear run.

So, why has the promise of online retailing not been delivered? In my view, we’re actually in the early stages of a new phase in the evolution of eCommerce: the personalisation of fulfilment. If you look along the entire eCommerce value chain, increasingly intelligent systems mean every step is now fine-tuned, customised and tailored to meet the individual’s specific needs, with one glaring exception: final delivery to the customer.

Put simply, consumers are no longer willing to undermine the convenience of online retailing by waiting in all day for delivery. Just as services such as Nest can learn and adapt people’s home energy usage to suit their daily routine, so today’s online shoppers want an eCommerce fulfilment service that’s tailored to their lifestyle and relationships. In other words, they want it to understand that they’re usually in on Monday afternoons and Wednesday evenings, and that Margaret at number 58 is happy to accept their parcels if they’re out.

Given these escalating demands, the only way for logistics companies to stay ahead of the game – and retain their role in the last mile – is to innovate. Some are doing so: witness DPD’s introduction of a 15-minute delivery window, backed by a web-based app enabling consumers to track its vans’ position in real time. But such ground-breaking approaches are still rare, in a logistics industry whose culture has not traditionally focused on innovation – and whose direct contact with end-consumers has historically been relatively limited.

Instead, most of the current innovation targeted at personalising the fulfilment segment of the value chain is coming from elsewhere. Initiatives I’ve already mentioned from outside the sector include Doddle, Pass my Parcel and UberCargo. And late last year, eBay quietly bought a same-day courier service called Shutl – and explained the purchase by pointing to rising consumer expectations. 

Looking forward, further advances will inevitably emerge. Drones. Driverless delivery trucks. Services that combine the transportation of both goods and people. All combined with new options for ordering and collecting while in transit – and all posing further challenges for incumbent logistics businesses.

In my view, the message today for logistics operators is clear: they must raise their game now in customer-focused innovation, or end up losing their grip on the ‘final mile’. Unless they adapt more fully to consumers’ lifestyles, they risk being relegated to the status of commoditised van fleets at the beck and call of technology-enabled fulfilment aggregators. Faced with this nightmare scenario, innovation is their only escape route.

Manufacturing: To secure a grant, think first about business opportunities

When I speak to manufacturing CEOs, I often find that they’re missing out on potential government grants which could help them develop their businesses. In most cases they’ve assumed that getting state funding is so difficult and complex that there’s little point even finding out what’s involved.

But they could be missing out. The EU’s state aid regulations allow member governments to inject millions of euros into manufacturing projects that create jobs and wealth. The money is there in the UK’s Regional Growth Fund (RGF), and is readily available for the right projects.

But it isn’t hard to see why some manufacturers think the grants landscape is complicated. The percentage of overall project costs that can be returned as grants varies between different regions and sizes of business. And while the same EU rules apply across the UK as a whole, England applies a minimum of £1m to RGF grants for big-ticket projects – a threshold that doesn’t apply in Scotland, Northern Ireland or Wales.

This £1m minimum has created an increased role for the Local Enterprise Partnerships (LEPs) across England, which draw down money from the RGF and other government sources, and parcel it out into grants of broadly less than £1m. Again, the money is there and available. And while there is uncertainty in some quarters about what will happen with the LEPs after the general election, it is liely that they will stay in place as part of the wider grants structure.

Grant money can significantly benefit manufacturers. An injection of effectively ‘free’ government money not only supports the overall project investment, but also attracts bank funding by reducing risk, and boosts eventual returns for the business.

The political will is now there on all sides to support a resurgence in UK manufacturing. It’s widely accepted that the hollowing-out of our manufacturing industry and loss of skills to overseas competitors have gone too far. From reshoring of production to the growth in apprenticeships, the focus is on rebuilding our manufacturing base.

Grants are a key plank of this policy agenda – and the projects most likely to attract state funding are those that create jobs and skills in areas of need, and have high innovation content. Strong export potential is a further plus-point. Companies can also look beyond the UK’s RGF for money: the EU’s €80bn Horizon 2020 initiative is seeking to support socially beneficial R&D investments across Europe – and it’s currently underweight in making grants in the UK.

Faced with these various channels for accessing state aid, how should companies map out the optimal route for their own business? Perhaps surprisingly, the answer lies in looking not at the grants system or the qualification criteria, but at the business itself.

When I discuss grants with my manufacturing clients, I start by asking about their plans and aspirations for the company over the next three to five years: new products, markets, skills, technologies, R&D, export opportunities, and so on. They nearly always draw a graph from bottom left to top right, requiring new investments in plant, processes and talent. And it pretty soon becomes clear whether and where grants could play a role in sustaining their growth curve.

One of the worst possible approaches is to start with the factors that the grant providers are looking for, and then go out ‘grant-hunting’ with a project specifically designed to attract funds. The lack of an underlying robust business case will shine through. And there are many examples of companies that have gone grant-hunting and ended up having to return the money – or even going under.

Make no mistake, government money is ready and waiting for the right manufacturing ideas and projects. The landscape for accessing it may look complex and confusing. But with the right guidance, navigating the way there is definitely worth the effort.

For more information please contact Gareth Hodge on [email protected]

17 February 2015

Manufacturers must start to realise the real value of their data – or face playing catch-up

In a world where the flood of data is expanding by the day, the findings from PwC’s latest Global CEO Survey highlight both the opportunities and challenges facing today’s manufacturers.

Asked what digital developments they regard as strategically important, manufacturing CEOs worldwide point to mobile technologies for engaging with customers (73%), cybersecurity (72%), and data mining and analysis (70%). But on the downside, they’re increasingly worried about the speed at which technology is changing (54%, up from 43% last year). And they’re even more concerned about the availability of key skills, with 74% citing this as a worry.

In recent years we have seen an explosion in new and more granular forms of information, ranging from real-time data streamed from production-line sensors and instrumentation to customers’ comments on social media.

And as the volume and diversity of data continue to grow, it isn’t always easy to see through the fog of ‘big data’ to identify and analyse the ‘little data’ that will drive real value. But manufacturers that can achieve this stand to generate deeper and more profitable relationships with customers, and genuine competitive edge in the marketplace.

To see what’s possible, look at the automotive industry. Carmakers used to have a traditional manufacturing mindset – one that essentially involved making the product, moving it into the sales network, and then pretty much forgetting about it. No longer. Using sensor-driven data streamed in real-time from dashboards and engines, they’ve been able to transform their customers’ experience and satisfaction around after-sales service, while also feeding live usage and social media information into their design processes to produce better vehicles.

Clearly, cars are different from many other manufactured goods. For one thing, their relatively high value has helped to justify big, early investments in digital connectivity and sensor technologies. But now, as advances such as the ‘connected home’ and Internet of Things (IoT) become mass-market reality, there are growing opportunities for other manufacturers to build in digital data connectivity, creating major benefits for both themselves and their customers. 

What kind of benefits? Well, in the past, feedback from warranty information and complaints has provided some limited insights. But, as a manufacturer of – say – domestic appliances, imagine the effect if you could track your devices’ usage and status through their lifecycle, including knowing when they need servicing or are about to fail. To name just a few possibilities, you could offer repairs or replacements even before customers know they need them, reward customer loyalty more effectively, and feed data from the field back into product development.

In a digital world, this is the future of manufacturing. And in our view, those that fail to embrace it will get left behind, both by their competitors and their customers’ expectations.  So what can manufacturers do today to prepare for tomorrow?

Four things. First, assess what kinds of information are – and could be – available. Second, develop a deeper understanding of what your end-customers want. Third, work out how analytics could help you use data to meet those needs more effectively. And fourth, seek and recruit the skills you’ll need to make it happen. Then over time, as your customer relationships and insights deepen, you’ll discover more ways to use data analytics to increase the benefits still further on both sides.

The digital future of manufacturing has arrived. It’s time to get on board – or face playing catch-up.

12 February 2015

The future of consumer mobility: could integrated transport drive a new digital divide?

The recent SMMT (Society of Motor Manufacturers & Traders) annual dinner showcased a ‘next generation’ award that illustrated the way new technology is radically reshaping the future of consumer transport. The prize went to the developer of a steering-wheel that can tell immediately whether a driver is too drunk, tired or even angry to drive safely. It does this by monitoring the individual’s heart rate, respiration and blood alcohol levels.

If such devices sound futuristic to you, think again. They’re here today. And it’s clear that the colliding megatrends of advancing technology and rapid urbanisation will transform the landscape of transport across bus, rail and cars. Take urbanisation: in 1960 only 34% of the world’s population lived in cities – now it’s 54%, and rising by 1.5 million people a week.

21726_Integrated-transport-_v2_VJ1102This explosion in urban populations raises major questions around how transport systems can meet rising demand safely and sustainably. The answer lies in digital technologies, embedded both in road and rail vehicles themselves and the surrounding infrastructure.

These technologies are now changing the concept of transport itself. Rather than being metal boxes in which we travel from A to B, cars and other vehicles are becoming interactive spaces where we undertake a multiplicity of activities, whether working, watching a movie, or buying or communicating online.

This shift has much further to go. Driverless trains and tubes are already a reality – and soon technology will free us up from having to keep our eyes on the road. Guided by roadside and on-vehicle sensors, driverless cars will enable people who are too old or visually impaired to drive.  And computer-controlled cars and buses will be able drive with a gap of six inches between them rather than six yards, vastly increasing the efficiency of road networks.

The alcohol-sensing steering wheel that we mentioned earlier underlines a further opportunity: the vehicle as health guardian. If someone is at at high risk of a heart attack, their car could divert to the nearest hospital as soon as their vital signs show anything amiss – indeed even if they’ve lost consciousness. What’s more, with shared digitally-connected vehicles we could each have our own personal preferences and payment details programmed into our smartphone. So as soon as we climb in, the car reconfigures to our needs – from seat position to radio stations – and debits our account as we travel.

If all this sounds like a wonderful future for urban dwellers, that’s because it possibly is. But inevitably there are bumps along the road. Some are the risks around data security and privacy. Will personal data and banking details be secure? Or imagine if a driverless car were hacked and redirected by criminals.  Other issues are legal and regulatory. Who’s liable if a driverless car goes wrong and crashes? And how can these vehicles be squared with the Highway Code, so they’re considerate to other road-users but not overly cautious?  The UK government is already looking into this and is due to publish a code of practice in the spring.

All of these implications have been picked over by various commentators. But another one to highlight is the risk of a widening digital divide, not just around access to information, but access to transport.

Why might this open up? Well, the rising population density of cities makes it worth investing in the infrastructure needed to support, guide and charge for driverless vehicles. But in rural areas the business case is much weaker – a challenge prefigured by the decline we’ve already seen in traditional rural bus services.

Given these contrasting dynamics, we could see the emergence of a two-tier transport system, with remote and low-population areas effectively becoming no-go zones for the latest high-tech vehicles being used in cities. This polarisation could in turn help to drive demographic shifts, as younger people migrate towards areas offering the new transport opportunities, and older people – probably more comfortable with legacy self-driven vehicles – moving the other way, into the countryside.

Would this be a problem for society? Not necessarily. But as the megatrends continue to play out in the transport arena, it’s increasingly clear that the changes they could usher in will involve much more than just new ways of getting from A to B.

11 February 2015

Reducing energy usage in UK homes: why we need new incentives and an effective supply chain

When the UK Government announced its ‘Green Deal’ in late 2012, I was excited. Somebody was going to help pay to insulate and weather-proof my leaky Edwardian semi – enabling me simultaneously to salve my environmental conscience, reduce my energy usage and bills as well as boost the comfort and value of my home.

It looked like a win-win, but it didn’t turn out that way. Even looking through my green-tinged specs, I could see that the scheme (which encouraged households to take out loans to fund energy-saving improvements and then pay the money back in instalments) wouldn’t appeal to most of my neighbours.

Sure enough, after 18 months, only 4,000 households had signed up.  In September 2014, MPs on the Energy and Climate Change select committee dubbed the scheme a ‘disappointing failure’.

The root causes of the Green Deal’s failure weren’t hard to identify.  Indeed, they’d been pinpointed more than a year before its launch, in a research report entitled Material gains in sustainability that we published jointly with the Construction Products Association (CPA). That study highlighted two major prerequisites for mass take-up of energy-saving improvements to Britain’s homes; effective incentivisation of homeowners and the creation of a supply chain with sufficient capacity. Nearly four years on, neither is in place.

Why does this matter? Because, in my view, the UK (and the world) – urgently needs to drive a dramatic increase in the scale and pace of action on climate change.

Households produce around 25% of the UK’s current emissions,with the rest of the built environment accounting for another 15%. The technologies and materials needed to deliver an 80% reduction in emissions from these buildings are available now. All we need is a way to apply them at scale.

Changes to the way new houses are built will help. But 80% of the homes that Britain will have in 2050 already exist. This means the only way to achieve the target is to retrofit the current housing stock.

So, what’s needed? As we highlighted in our report with the CPA, two things. The first is incentives to overcome most householders’ ingrained inertia and stimulate mass demand. The Energy Company Obligation (ECO) – introduced in early 2013 to work alongside the Green Deal – requires large energy suppliers to deliver energy-efficiency measures to domestic energy users, particularly for vulnerable groups and hard-to-treat homes. The latest consultation period on the ECO closed on 21 January but, the equivalent exercise on the Green Deal closes on 28 February - so there is still time to make your views known by clicking here.

On the Green Deal itself, MPs on the select committee proposed discounts on council tax or stamp duty for homeowners who invest in energy efficiency. They might also need to consider whether – though no doubt unpopular in some quarters – there might need to be a stick alongside the carrot, with penalties for the most energy-inefficient homes.

The second prerequisite for large scale energy efficiency improvements to UK homes is a better value chain for ‘green’ materials and retrofitting work. This involves not just materials, but also skills and companies ready and willing to apply them. However, if the mass demand is there, the industry will grow. Given that the UK needs to retrofit around 20 million homes by 2050, the commercial opportunities and likely jobs impact, are huge.

Positively, some action is under way. In summer 2014, the Government introduced the Green Deal Home Improvement Fund (GDHIF), whose initial £120m of vouchers went within weeks. In December, a further tranche of £24m was snapped up in the first 24 hours. While these measures look popular, they still represent a ‘boom-and-bust’ approach to incentivisation. What’s needed is a more long-term and sustained approach to encourage mass take-up by homeowners and a matched response from the supply chain.

Put simply, Britain set a lead for the world by adopting legally-binding emissions targets and now it needs to set a lead in working out how to meet them. The question remains, have I insulated my loft yet? I’m afraid the answer is no but perhaps we all need a bit more incentive to push it to the top of the ‘to do’ list.

Recruitment: a sector in the front line of disruption by the ‘sharing economy’

The emergence of the sharing economy is more apparent than ever across many sectors, driven by the collision between technological breakthroughs, increased online activity, and resource scarcity. But wherever it manifests itself, the sharing economy has one universal trait: it’s all about connecting demand to spare resources or capacity, and vice versa.

In my view, nowhere is this capability more powerful – or more disruptive to current operations – than in the recruitment market. As a result, I believe the next generation of recruitment businesses will look very different from those of today.

21726_Recruitment-blog_v3_VJ2511

Why? Because of three fundamental shifts. The first is connectivity. In an era where people are more interconnected than ever before, most employers are already linked to their future recruits without even knowing it. Employees used to stay in touch with a handful of colleagues from each job. But today, social media networks like LinkedIn mean we can all keep in contact with – or can certainly track down – scores of people whose capabilities we’ve seen in action at first hand. The challenge for recruitment firms is working out how to capitalise on this newfound and far-reaching connectivity to source the best candidates for their clients.

The second shift is the increase in availability of relevant, timely, and revealing data. As people’s digital lives become increasingly open and public, there’s an ever-expanding wealth of employment-related information available - time in their current role, last promotion, career trajectory, work testimonials etc. If gathered and analysed properly, this information can help a smart recruiter to identify not just top talent, but the top talent most likely to move jobs – putting them a step ahead of their competitors in meeting clients’ recruitment needs.    

The third shift is the reversal of limiting factors within the marketplace. The commodity in short supply is no longer jobs but available talent to fill those jobs. Talented people no longer need to go out and seek employment, and so the role of recruitment firms needs to change from attracting top talent through ‘scattergun’ advertising, to sourcing it through detailed insight. And it needs to be in a way that candidates will accept. Today’s prospective employees have much less patience for a long, convoluted recruitment process with multiple physical interviews.

View the industry through this lens and it’s clear that the best candidates will no longer physically go to a recruitment office looking for work. Their connectivity and digital footprint puts them at the heart of a fluid environment where opportunities arise as part of business-as-usual, rather than through the traditional recruitment process. And when a more attractive offer for their skills happens to come along, they may just decide to take it.

This move to a non-stop, self-sustaining, candidate-driven marketplace is already triggering several developments within the recruitment space. One is employers’ growing use of referral schemes to find fresh talent through their own employees’ personal networks. Another is the rise of searchable online job boards, matching CVs from qualified candidates with suitable opportunities from employers.

At the same time, this collision between widespread connectivity and the sharing trend is generating further opportunities to revolutionise recruitment. For example, with almost two million people unemployed in the UK - and many of those who are employed seeking greater flexibility - there’s the potential for jobs to be carved up and offered online in small packages of, say, two hours a piece. While this is already happening to an extent, it could be taken to a new level by utilising the full power of connectivity to access previously untapped pockets of skills.

However, perhaps the most dramatic impact of these shifts is the transformational effect they have had on the recruitment industry as a whole. What will the successful recruitment business of tomorrow look like? It will likely be nothing like yesterday’s brick-and-mortar agency. Instead, it will have more in common with online-only entities such as LinkedIn and various job boards – combining the ability to reach, identify, and connect quality recruits with employers.

Using this type of model, a recruiter will be able to gather and apply insightful data to offer its clients a continuing flow of candidates, who both match their desired talent profile and are looking to move jobs. Top recruitment firms will even find a way to present these candidates before the clients themselves have identified a specific vacancy.

The advent of the sharing economy has changed the game in the recruitment market which employers should embrace. The ‘new-look’ industry of the future is already beginning to take shape.

A new kind of integrated transport: why do we need to look at things differently?

Here are some facts to mull over the next time your tube train gets delayed by remedial engineering work. By 2050, London's population will have leapt by more than a third to over 11 million – meaning its underground and rail services need to expand by 60% and 80% respectively. And by 2018 – just three years away – the number of parcels being home-delivered annually in the UK will hit well over one billion, driven by online retail. 

The traditional concept of integrated transport has been where the various travel networks and modes are coordinated and dovetailed, so as to maximise the overall efficiency and speed. But, in my view, the megatrends – and specifically technological breakthroughs – offer a solution by opening the way to a new kind of ‘integrated transport’.

Technological breakthroughs are already part of the pulse of the transport industry: it’s way ahead of other sectors in technologies like contactless payments, telematics, sensors and automation. But to really keep pace with urbanisation, cities need to take this integration a step further – by embedding new technologies that integrate the entire transport system with people’s wider lifestyles, ranging from their daily working pattern to their leisure activities to their efforts to stay fit and healthy. Whilst further opportunities lie in ensuring consumer and freight transport integrate better with each other.

But how will the new kind of ‘integrated transport’ work in practice? One valuable lever is dynamic pricing, incentivising a particular individual to travel at a particular time of day. Supported by employers allowing people the flexibility to work at their own preferred times and locations could shift millions of journeys from peak to off-peak periods.

A further lever is enabling multi-tasking.  As more of us commute in from the outskirts of the city, with little ‘modal choice’, we need to use that travel time more productively. For example, many retail and consumer businesses already rely on and interact with transport and logistics operators, but the consumer’s role in that interaction is changing irrevocably. This makes it more important than ever that the transport industry looks outside and thinks creatively about partnerships with other types of business.

Just consider the possibilities. What about  if you and your neighbours could opt into a platform that allowed you to consolidate your deliveries, with a fee paid to the person opting to work from home and receive everyone else’s parcels? In the future, social logistics – and also logistics that enable more localised networks between neighbourhood businesses and consumers – will help keep cities moving. And companies will reap rising value from sophisticated data analytics that provide a holistic view of the consumer and their goals.

A final important area of integration is with transport manufacturers. Connected and – further into the future – driverless cars, trains, freight lorries will simultaneously boost the efficiency and productivity of networks, and increase the flexibility of goods deliveries, by removing the need to roster human drivers at anti-social hours. This could also reduce peak traffic levels and pollution on the roads, encouraging people to cycle and keep themselves healthier. So as well as expanding the definition of integrated transport, we’ll also expand its impacts across more people and industries, as electric vehicles integrate and interact with the transport infrastructure and the city itself.

Of course, these future scenarios bring risks. But as city populations grow, the future of integrated urban transport lies in deeper and wider integration – enabled by technology – into people’s lifestyles. The results for city dwellers will be both a better travel experience, and a chance to reclaim ‘lost time’.

10 February 2015

Preparing for the future of recruitment: meet the ‘shapers’ that will transform the industry over the coming decade

The next time you order a package for delivery at home or work, think how the experience differs from ten years ago. Back then you’d wait a week or so for it to turn up – and if it didn’t, you’d ring someone to ask where it was. Today you can log in immediately you place the order and track its progress online in real time.

Or how about the weekly shop? A decade ago you (or someone you love) would waste an hour trawling around the local supermarket, list in hand. Today you can click a button, fix a delivery time, and find something more interesting to do. Which isn’t difficult.

Put simply, it seems that in every area of life and every interaction with businesses, our experiences have been radically improved to become faster, easier, more transparent and more traceable. Until you look at recruitment.

Amid all the progress elsewhere, recruitment processes have remained virtually frozen in time for the past decade. As a result, candidates hoping for – indeed expecting – the same quality and convenience they enjoy in other areas of their lives are consistently disappointed and increasingly dissatisfied. Slow, opaque, clunky, frustrating, unresponsive – these are just some of the adjectives they commonly use to describe their experience of applying for a job.

It can’t go on like this. And it won’t. Not just because of the plummeting satisfaction levels among both candidates and business clients. But also because, in an economy targeting faster growth fuelled by a more dynamic jobs market, today’s archaic and inflexible recruitment processes are an increasing drag factor.

Against this background, we at PwC have identified a set of powerful forces – we call them ‘shapers’ – that between them will transform the recruitment industry over the coming decade. We can group these shapers into four categories.

First, and most obvious, are the shapers triggered by technology. These include advances like digital transformation, unprecedented connectivity and the rise of big data. Take LinkedIn: employees used to stay in touch with a handful of colleagues from each job. But today we all keep in contact with – or can certainly track down – scores of people whose skills we’ve seen at first hand. The challenge for recruitment firms is working out how to capitalise on this new-found and far-reaching connectivity.

The second group of shapers is around mobility and globalisation. In an increasingly fluid world, talent can be located anywhere, and candidates are increasingly willing – even eager – to travel for work, including internationally.

Third, there are fundamental shifts in the candidate pool, including demographic change and declining employee loyalty. As people live and work longer, and the single ‘job-for-life’ becomes a distant memory, we’re moving to a world where four or five generations co-exist in the workplace and careers resemble a mosaic rather than a straight line. Yet many of today’s recruitment processes are ill-equipped to cope with older workers, while also leaving first-time millennial applicants frustrated and disillusioned – hardly an ideal initial experience of the industry.

Finally, there’s the rise of sharing and trading, exemplified by new ‘sharing economy’ models such as Airbnb. As people’s digital lives become increasingly open and public, they’re increasingly willing and able to share employment-related information and collaborate in their quest for the ideal job. For many, the first port of call is as likely to be their contacts on LinkedIn as a recruitment company.

And across the industry, all these shapers are playing out against the background of an escalating scarcity of talent, which is intensifying the need and urgency for companies to respond to all the other shapers.

What’s clear is that the industry has to transform itself, or face becoming obsolete and irrelevant. So what can recruitment businesses do today to be ready for tomorrow? To find out, we’re going to produce a series of blogs drilling down into each of the shapers we’ve highlighted, and mapping out specific steps for companies to take in response.

The bottom line is that the world has moved on. And recruitment must move with it – or get handed its P45.