Skills-Based Staffing: A New Trend for Manufacturing and Logistics

 

Skills-based staffing helps businesses place the right people in the rightroles, improving operational efficiency.

In the ever-changing landscape of manufacturing and logistics, skills-basedstaffing (skills-based hiring) is emerging as a new recruitment trend. Thisapproach focuses on actual capabilities rather than academic degrees, helpingbusinesses optimize performance and enhance competitiveness.

1. Why is skills-based staffing becoming a trend?

Amid global labor market volatility, manufacturing and logistics face a paradox:rising workforce demand but a shortage of qualified candidates. The advancementof technology—especially automation and digitalization—has made skills moreimportant than ever.

Instead of hiring based on degrees or years of experience, many businesses nowrealize that directly assessing practical capabilities is the key to finding theright talent. This is the foundation of skills-based staffing—a trend spreadingrapidly across manufacturing and logistics.

2. What is skills-based staffing?

Skills-based staffing is the practice of selecting and placing employees basedon their actual capabilities, rather than relying solely on education, workhistory, or job titles.

Key differences:

• Traditional hiring: Focuses on education and years ofexperience.
  
• Skills-based hiring: Prioritizes practical ability, softskills, and technical competencies that fit job requirements.

This is particularly important in manufacturing and logistics because:

• Production processes are increasingly automated.
  
• Workforce flexibility is needed to handle seasonal demand or specificorders.
  
• Certain roles require specialized skills (e.g., CNC operation, supply chainmanagement, handling hazardous goods).

Skills-based staffing evaluates actualcapabilities instead of relying solely on degrees.

3. Benefits of skills-based staffing in manufacturing andlogistics

This recruitment approach not only reflects a trend but also delivers tangiblebusiness value:

• Shorter hiring time: By focusing on skills, businesses canskip unnecessary education or experience filters. Skills can be verified throughpractical tests or job simulations, making the process faster.
  
• Lower HR costs: Hiring the right person from the startreduces early turnover and retraining costs—critical in industries wherereplacing staff is costly.
  
• Optimized operational performance: Employees matched toroles by skill adapt quickly, perform better, and make fewer mistakes, reducingtraining time and boosting productivity.
  
• Increased flexibility: With skill profiles stored,companies can reallocate staff across departments as demand shifts, especiallyduring peak seasons.

The greatest benefit of skills-based staffing is cost optimization andperformance improvement.

4. In-demand skills today

Not all skills carry equal weight. In today’s manufacturing and logisticsenvironment, some skill groups are particularly valuable:

4.1/ Manufacturing:

• Operating automated machinery: Hands-on ability with modern production linesand troubleshooting.
  
• Equipment maintenance and repair: Minimizing downtime and saving maintenancecosts.
  
• Technical drawing literacy: Supporting precision inproduction.
  
• Workplace safety: Compliance with standards and accident reduction.

  4.2/ Logistics:

• Warehouse management systems (WMS): Proficiency in inventory managementsoftware.
  
• Transportation coordination: Planning and supervising goodsmovement.
  
• Handling hazardous materials: Mastery of safety regulations andprocedures.
  
• Supply chain management software: Tracking, analyzing, and optimizing goodsflow.

Technical and digital skills are increasingly dominant in manufacturing andlogistics recruitment.

5. How to implement skills-based staffing

Adopting this model requires a structured and standardized process to ensurebusinesses not only hire correctly but also sustain workforce development. Atypical process includes:

• Step 1: Identify required skills
  Conduct jobanalysis for each role, clarifying core and secondary skills. Build aSkill Matrix listing all necessary skills and proficiencylevels to ensure objective evaluation.
  
• Step 2: Assess candidates scientifically
  Movebeyond resumes and traditional interviews. Use practical tests, job simulations,situational interviews, and psychometric assessments to gain a complete view ofactual abilities and reduce hiring errors.
  
• Step 3: Allocate staff based on skill profiles
  With skill data in place, allocate staff to roles best suited to theirabilities, and reassign as business needs change—especially useful in seasonalpeaks.
  
• Step 4: Continuous training and development
  Skills-based staffing doesn’t end at hiring. Upskilling and cross-trainingexisting employees ensure adaptability to new technologies and processes,keeping the workforce ready for future demands.

6. Challenges and solutions

Although skills-based staffing offers clear benefits, businesses often faceobstacles in implementation. Addressing these challenges is key:

• Difficulty measuring real skills
  Soft skills andsituational abilities are harder to quantify.
  Solution: Use a mix of assessments—hands-on practice,situational interviews, on-site evaluations, and assessment centers to simulatereal scenarios.
  
• Lack of skill profile management tools
  Without aproper system, tracking and updating employee skill data becomesfragmented.
  Solution: Adopt HRM systems with SkillMapping and analytic dashboards to track competencies, identify skill gaps, andplan training effectively.
  
• Internal resistance
  Change from traditionalhiring often meets pushback from managers and staff.
  Solution: Transparent communication of benefits, training formanagers and employees, and sharing success stories from early adopters helpbuild trust and reduce resistance.

Technology adoption and effective internal communication are crucial toovercoming challenges in skills-based staffing.

HR2B: Your trusted partner in skills-based staffing

As a strategic partner for many manufacturing and logistics companies inVietnam, HR2B supports skills-based staffing with:

• Detailed skill profiles for each candidate.
  
• Transparent selection processes based on measurablestandards.
  
• Flexible staffing services: short-term, long-term, orseasonal.
  
• Training advisory services to upskill existing teams.

Skills-based staffing is not just a passing trend but a long-term workforcestrategy for manufacturing and logistics. By focusing on actual capabilities,businesses can hire the right people at the right time, optimize costs, andboost efficiency.

To succeed, companies need standardized skill frameworks, modern managementtools, and experienced staffing partners like HR2B—ensuring not only today’sworkforce solutions but also readiness for future market shifts.

https://tinyurl.com/y8upeewa

Linear Economic Model and Circular Business Strategies

 

Take, Make, Waste - Why Some Brands Plan for Obsolescence

The process of planning for obsolescence not only hurts consumer experience - leading to lower lifetime value but is also terrible for the environment. Here we look at reasons why good companies still plan for obsolescence.

Planned Obsolescence and The Linear Economy

If you have ever purchased a product only to find it break soon after the warranty has ended, you know the frustrations of planned obsolescence. According to Investopedia planned obsolescence is:

“A strategy of deliberately ensuring that the current version of a given product will become out of date or useless within a known time period. This proactive move guarantees that consumers will seek replacements in the future, thus bolstering demand.”

The process of planning for obsolescence not only hurts the consumer experience with a brand - leading to lower lifetime value but is also terrible for the environment.

When products are designed to break, the potential of their raw materials is not fully realized and instead often end up in landfills. Fresh raw materials are then required to manufacture new products. It’s a vicious cycle, with the environment taking the dual impact of raw materials extraction as well as an increase in waste.

With so many downsides, why do good companies focus efforts on making their products worse?

The Linear Economic Model

This is known as the linear economy, where raw materials are extracted and made into products that are then purchased, consumed and, ultimately, discarded. This process is often referred to as “take-make-waste”.

In a linear economy, value is created by producing and selling as many products as possible. This model grew out of the Industrial Revolution of the late eighteen hundreds. While companies have found ways to make each step the process more efficient, little has changed to update the incentive structure put in place by take-make-waste.

It is this incentive structure that drives brands to do the illogical and design products to be worse, not better - hurting consumers and the environment in the process. It would be beneficial to all if these efforts were focused on a fair value exchange where consumers, brands and the environment could co-exist together in a beneficial way.

A New Way Forward

Luckily, consumers are voting with their dollars and demanding more from their products and the companies that produce them. We are currently undergoing a flight to quality in consumer goods that benefits companies that produce high-quality, long-lasting products — creating loyalty and ultimately driving an increase in lifetime value.

Additionally, sustainability is becoming a topic of increasing importance, with consumers again opting to purchase products from companies that produce products in a sustainable way and work to increase recycling.

This begs the question, if brands need to invest more in sustainable production while creating products that last longer, how can these brands stay in business? A new system is needed where value is exchanged between brands and consumers throughout a product's life and, finally, repaired, upcycled or recycled.

Circling in on Circularity

Circular business strategies are increasingly becoming a competitive advantage for those looking to strengthen their position in the market over others offering traditional one-time sales.

Earlier we broke down the linear economic model and how it creates incentive structures that cause companies to plan obsolescence into their products. This not only creates a frustrating consumer experience, but also wastes long-term potential of raw materials —  leading to significant and unnecessary ecological and economic waste.

When considering product development within the linear economic model, only incremental gains can be realized to reduce the impact of always needing to sell higher and higher quantities of products — again driven by the fact that brands can only realize value once:  when a product is sold. Instead of thinking about products through a linear sequence of steps, companies should consider the full lifecycle of a product and its material components.

Enter the circular economy — also known simply as circularity. In a circular economy, products are kept in use for as long as possible, with their material components reused to create new products at their end of life to realize maximum potential.

With circularity, brands no longer need to constantly push new products and can instead focus on providing the maximum value possible through existing products and resources. In return for providing long-term value, brands can provide a better customer experience and charge for it accordingly. And because the full potential of material inputs is realized, waste is minimized while revenue is maximized. Circularity is the answer to bringing customer satisfaction, business success and environmental sustainability into a symbiotic state.

Circular business strategies are increasingly becoming a competitive advantage for those looking to strengthen their position in the market over others offering traditional transactional product sales. The circular model better fits the way consumers prefer to purchase products and services: with smaller payments at the time value is provided over large up-front investments.

Value can be created a number of ways within the circular economy. Let’s take a look at a few.

Product Service Systems

By now we are all familiar with the service economy. Services like Uber, Airbnb, and TaskRabbit provide users with what they want without the need to invest in purchasing a physical product. Applying this model to a physical good gives you  a Product Service System, or PSS, where services are layered on top of product ownership adding a layer of value to the value chain.

Image Wikipedia

Product Service Systems can be broken down into three main categories:

Product Oriented

Products are sold to consumers with additional services offered to increase the value of the overall offering.

Use Oriented

Products are not sold directly; instead, the function of the product is provided through leasing or renting the product. With this business model, ownership of the products remain with the company providing them.

Results Oriented

In this business model, products only play a role in helping provide a service to the user. For example, a car is used to transport consumers using ride sharing apps, but the car is never owned by the customer.

These business models form the foundation for companies to not only replace revenue from traditional, one-time product sales, but actually increase revenue and customer satisfaction by driving repeat usage of the services offered.

With circularity becoming an obvious evolution of current linear business model, brands need a way to execute on the above business model shifts. In our next piece we will discuss the tactics to transform any business into a circular one.

https://tinyurl.com/4uscwfun

Management, The Process

 

https://tinyurl.com/yc4yt7aa

A Radical Rethink of HR

 

Carolyn Geason-Beissel/MIT SMR | Getty Images

Ashley Goodall

Human resources needs to rethink its role as an agent of management and become a passionate advocate for employees and their interests.

For the human resources profession, this has been the best of times and the worst of times. Early in 2020, as the realities of the pandemic set in, all the big issues were HR issues and the function was challenged and valued as never before. Four years later, HR is asked to return to its traditional role of bridging between what business leaders insist on and what will keep the workforce at least partly happy. Some employees have been forced back to the office, against their wishes, and the only reason we’re no longer talking about quiet quitting is that we’re too busy grappling with the latest rounds of layoffs. So as we embark on the next era of work, the time is ripe for a rethink of HR.

To understand what the contours of a new concept might be, let’s tease apart the various interests at play inside a company. Imagine a Venn diagram consisting of two circles. The first circle represents the interests of a particular business. We’re quite familiar with the sorts of things it contains:

• Gain market share. 
• Create better products. 
• Invest in new opportunities. 
• Drive efficiencies. 
• Optimize the organization. 

The people-related things in this first circle include ensuring that the workforce has the right skills, or managing labor costs, or building a roster of strong leaders. These are all, obviously, necessary parts of running a business, especially one of any size, and they’re all perfectly good things. But they are not the only things, either.

So let’s consider the second circle. This circle represents not the interests of the business, as the first one does, but rather the interests of the people working there. It contains some things that are extrinsic — getting paid a fair wage, getting promoted — and many more things that are intrinsic — doing work that makes a difference, belonging to a supportive team, doing work that’s interesting and challenging at the same time, getting better at something, and so on. The second circle contains all the things that make a job worthwhile for the person doing it.

Now, the first important point to make is that our two circles do not perfectly line up with each other. There are things that are in the interests of the business that are very much not in the interests of employees (layoffs, restructurings, late-night emails, open-plan offices, long-haul travel in coach); and there is plenty of stuff that is in the interests of employees but not very much in the interests of the business (raises, vacations, sleep). In the olden days, the fact that the circles don’t exactly align was made up for by pay and benefits, the function of which was to compensate people for some stuff that wasn’t great (hence, in one sense, compensation). Again, a non-crazy proposition: Because we (the business) recognize that there’s some stuff that’s a little bit sucky for you (the employees), we should do something to make up for this and induce you to hang around, whether that something is money, or benefits, or wellness gurus, or foosball tables, or Instagrammable offices.

Even if that approach were ever really sufficient, it certainly isn’t now, as the widening gap between companies and their workers illustrates. The unwillingness of employees to mutely accept what their employers have to offer is a reflection of the importance of the second circle — employees’ interests — and a reflection as well of the perception that between them, business leaders and HR have inadequately addressed those concerns.

HR and the Second Circle

Right now, HR sees itself as the implementation arm of the people-related things in the first circle — and this certainly appears to be the role that most businesses want it to play. In many organizations today, HR functions either as an agent of management or as a slightly awkward mediator between employees and management, trying to explain what’s going on to employees while nudging management in a better direction.

But this brings us to the second important point, which is that notwithstanding the fact that these two circles are different, they do nevertheless overlap. There are things that are quite naturally in the interests of both the business and its employees. The business would like people who are at the top of their game, and people like to spend time doing what they do best. The business would like better products, and people like to improve things. The business would like strong relationships with its customers and partners, and people like to form strong relationships.

That’s why I maintain that HR’s fundamental accountability must be for all the things in the second circle. HR should become a full-throated advocate for employees and their interests. It should be an expert in understanding the employee experience on the front lines (not just as relayed via senior management) quantitatively and qualitatively, and it should be an expert in what humans need in order to do their best work and to make their fullest contribution. Given that the long-term interests of any organization and the long-term success of its people are one and the same, an enlightened leadership team will ask HR to play this role, and will empower it to do so.

HR should become a full-throated advocate for employees and their interests.

One good way for HR to embrace this accountability would be to make the overlap between the circles as big as possible — to argue for all the things that serve everyone’s interests, and to identify more investments and programs and systems and other initiatives that lift all boats. Creating a methodology to support great teams is one example — great teams produce innovation and performance and all sorts of other, first-circle things; at the same time, a great team offers an essential human experience to all its members and so is also an instance of a second-circle thing. Introducing programs to help people use and share their strengths is another example — when people spend more time doing what they do best, the quality of their work increases (first circle), as do the intrinsic rewards of doing great work (second circle).

This is to argue that HR should return to its roots — concerning itself not just with the things that affect people (often negatively), but with the things that people need. In this sense of returning to fundamentals, HR should be radicalized. It’s time for all of us in the profession to take ourselves seriously as the people who best understand the essential conditions of human flourishing, and who are best positioned to advocate for those and thereby to unlock performance, innovation, and productivity.

Here’s what that looks like.

Time for HR to Refocus: Three Key Steps

The first step is to understand what life is actually like in the second circle. This means to create and share quantitative and qualitative measures of employee experience. But there’s a challenge here: If the chosen approach — the all-employee survey or feedback session or similar — is designed and explained as something to serve and inform management, then participation rates will be low, data will be poor quality, and it will only be possible to collect it once or twice a year, for fear of creating survey fatigue. The trick is to figure out how to create data that is massively useful for teams on the front lines, to figure out how to get it in their hands as quickly as possible, and only then to aggregate it up the organization to provide a broader measure.

At Cisco, we created a brief team-level engagement survey that team leaders could trigger themselves, without HR’s say-so. The results came back to them in a couple of days, because most people move a bit faster when the request for input comes from their immediate boss. The team could discuss the results together, and decide what changes they wanted to make in how they worked together. HR, meanwhile, could tally the scores across the organization and get a real-time and reliable pulse of the day-to-day experience of work.

The second step begins with the recognition that training of those team leaders is a non-optional investment in second-circle health. Our teams at work are the single biggest determinant of our experience at work, and team leaders have an outside influence on the experience of being on a particular team. Today, however, much leadership training is an afterthought. We promote people to leadership roles because they’ve excelled at non-leadership jobs and we offer them a couple of weeks of training at some point in their first year. The support we give them is mainly concerned with how to operate the performance management system or the compensation system — both artifacts of the first circle.

What would it look like if, instead, we trained team leaders as though theirs was the most important job in the company? For starters, we would surely begin their training before offering them the role, and consider their performance in training as part of their eligibility (and we would ask team leaders joining from other companies to meet the same standards).

What if we trained team leaders as though theirs was the most important job in the company?

We would start leaders out with small teams, and only consider them for more senior roles when they had demonstrated their people leadership acumen, not just their ability to deliver business results. And we would support leaders with ongoing refresher training, or special sessions dedicated to emerging topics of interest. In short, we would treat the development and support of team leaders as a system, worthy of sustained investment over many years, rather than as a one-time morale-boosting event when budget allows.

The third and last step, meanwhile, would rethink how HR itself is structured. At the moment, in most large organizations HR maps its resources to the leadership structure of the business — so when a function attains a certain size, it is assigned an HR generalist to sit at the leadership table and advise the senior team. The structure of HR, in other words, is a first-circle structure. And this, in turn, shapes HR’s cognitive model of itself — if you ask HR professionals what the role of HR is, they will tell you in some form or another that it exists to serve the interests of the business, because these are the interests that they are most frequently exposed to.

A second-circle HR organization would instead map itself to the teams, and their team leaders, and their interests. Every HR professional would have a portfolio of teams assigned to them, and would be asked to check in with each of these teams and their leaders every couple of weeks. For some, supporting a portfolio of teams like this would be a full-time job; for others, it would be something to do in addition to other responsibilities. But for everyone in HR, it would be a chance to engage directly with the needs of the people on the front lines, and to help meet those needs.

https://tinyurl.com/4p7a2xch

Designing the Organisation and Enterprise Architecture

 

https://tinyurl.com/2ts7hwf8