Geopolitical uncertainty and the labour market

The war in Ukraine, conflicts in the Middle East and trade tensions have shown how quickly events taking place thousands of kilometres away can disrupt manufacturing plants in Poland. Component shortages, longer transport routes, surging energy prices and sudden fluctuations in order volumes have become part of everyday business reality. As a result, companies are increasingly recognising that their resilience is no longer determined solely by crisis strategies, inventories, technology or alternative suppliers. An analysis by Smart Solutions HR experts shows that people play the most important role.

Geopolitics enters the production floor

Polish companies are currently forced to operate under extremely challenging conditions. Decisions made by manufacturing plants in Poland are now influenced not by a single crisis, but by several overlapping sources of risk. The war in Ukraine continues to threaten energy, transport and port infrastructure. This is compounded by tensions in the Red Sea and around the Suez Canal, the situation in the Strait of Hormuz, the trade war between the United States and China, and global competition for raw materials. Disruptions along major maritime routes increase transport costs, extend delivery times and force carriers to use alternative routes. The situation in the Strait of Hormuz is particularly significant, as a substantial share of global oil and gas trade passes through it. Its destabilisation affects not only raw material importers, but also energy, fuel and transport prices.

“Against the backdrop of current international developments, manufacturing is operating in an environment of considerable volatility. Companies are not always able to predict whether order volumes will remain at their current level, whether components will arrive on time, or whether transport and energy costs will increase in the next quarter. Under such circumstances, assessing operational risks and planning alternative and emergency measures as precisely as possible become particularly important, as they help limit the impact of external factors. From our perspective, however, an area that is often pushed into the background, neglected and frequently suffers the most during crises is equally important: employees and the protection of workforce resources,” says Agnieszka Różańska, Business Development Manager at Smart Solutions HR.

Experts have observed that demand for production workers now fluctuates much more frequently than it did just a few years ago. In the past, many companies were able to plan production several months in advance. Today, orders are far less predictable, forcing businesses to respond very quickly to changing market needs. This, in turn, affects staffing decisions and employers’ approaches to recruitment and employment. In practice, a company may request 20 additional workers one month, only to require 50 or 60 people two weeks later to launch another shift. The opposite situation also occurs, with a client scaling back production and reducing its staffing needs within a short period of time.

“A good example is the automotive industry, where production volumes depend both on the number of orders placed by vehicle manufacturers and on the availability of components. The situation is similar in logistics and e-commerce, where demand for workers rises sharply during periods of increased consumer activity, such as Black Friday or the Christmas season. These fluctuations serve as a kind of operational resilience test for companies. They demonstrate how quickly businesses can adapt their workforce resources to changing conditions and prepare them for unforeseen events, including those caused by geopolitical crises,” explains Włodzimierz Kucharczuk, Project Manager at Smart Solutions HR.

The key word: flexibility

According to experts, the uncertainty caused by international developments has taught employers that employees are not merely an operating cost. Increasingly, they are regarded as one of the pillars of a company’s resilience.

Just a few years ago, manufacturing companies focused primarily on filling workforce gaps as quickly as possible. According to experts, the priority today is to build organisational resilience to changing market conditions. This means moving away from rigid workforce planning in favour of flexible team management, which allows companies to quickly adjust staffing levels to current production volumes and order numbers.

“From the labour market perspective, there has been a clear shift in attitudes towards recruitment. Companies increasingly view access to workers as an element of business strategy rather than solely an operational matter. As a result, diversifying candidate sourcing channels is becoming increasingly important, while international recruitment is becoming the standard rather than a solution used only during periods of workforce shortages. This is a deliberate decision that helps reduce staffing risks, maintain production continuity and strengthen organisational stability. The companies gaining a genuine competitive advantage today are those that can respond quickly to market changes and, above all, ensure stable access to qualified workers,” says Mariana Zubryk, Project Manager at Smart Solutions HR.

“The workforce must ensure the continuity, quality and safety of production processes while remaining flexible enough to adapt to changing circumstances. This is why manufacturing plants are more cautious about increasing permanent headcount, recruit in stages more frequently and analyse more carefully which skills are critical to their operations. At the same time, they are developing models based on temporary work, process outsourcing and ongoing cooperation with employment agencies,” adds Agnieszka Różańska.

The approach to candidate sourcing is also changing. Recruiting workers from abroad is no longer treated as an emergency solution introduced only when there are not enough candidates available on the local market. Increasingly, it is becoming a permanent element of workforce strategy and a way to diversify risk.

“Foreign workers now play a key role in securing the workforce required by the manufacturing sector. They help address shortages of local employees, maintain full staffing levels across shifts and ensure continuity in order fulfilment. They also give companies greater flexibility during seasonal increases in production, the launch of new production lines or the acquisition of major contracts. Their availability also has a direct business impact. Workforce shortages can lead to underutilised production capacity, delays and higher unit costs. Employing foreign workers helps reduce these risks and enables companies to maintain greater operational predictability and competitiveness,” says Włodzimierz Kucharczuk.

Multi-skilling is also becoming an important element of workforce security. A growing number of manufacturing plants train employees to perform several types of tasks so that, in the event of absence, downtime or a sudden increase in orders, they can be moved flexibly between positions.

Companies are better prepared, but people remain the foundation

Technology, automation and safety stocks remain important pillars of resilience. However, they cannot ensure business continuity without a sufficient number of people to operate equipment, monitor quality, prepare shipments and respond when a situation deviates from the standard process.

In this context, preparing a workforce contingency plan is of major importance. Such a plan should include ongoing cooperation with an employment agency, building a reserve pool of candidates and maintaining contact with former employees. Multi-skilling programmes and regular workforce forecasting under different scenarios are also essential. This approach enables companies to fill vacancies faster, respond more effectively to sudden changes and reduce the risk of operational downtime.

“Our analysis and conversations with employers and businesses show that manufacturing plants are now better prepared for sudden disruptions than they were during the pandemic or in the first months of the war in Ukraine. Companies are more likely to diversify their suppliers, maintain larger stocks of critical components, use alternative transport routes and develop contingency scenarios. At the same time, the level of preparedness varies. Some businesses still focus primarily on costs at the expense of operational resilience. In practice, a plant’s resilience can be assessed by how quickly it can replace a supplier, restart production after downtime and, above all, fill workforce gaps. The most important test is therefore not simply whether a crisis procedure exists, but how long it takes to return to normal operations in practice. Access to the right people is increasingly what determines whether a company emerges from a crisis with minimal losses and in the shortest possible time,” concludes Mariana Zubryk.