Arcadis NV SWOT & PESTLE Analysis

Strength

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Weakness

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Opportunity

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Threat

1. Shortage of skilled workforce in advanced economies: Employees are a valuable resource for Arcadis because a large portion of them are highly skilled and specially trained. Employee compensations have to be higher to retain employees for longer. The company conducts regular workshops to upskill their employees. As Arcadis is primarily an engineering company, they need a lot of skilled workers for engineering, site management, working in factories, information technology, cybersecurity, flight operations, strategy and management. In 2016, technology jobs in the US outnumbered skilled workers by 3 million and according to estimates, by 2030, the global shortage of skilled workers will reach 85 million, leading to loss in revenues worth $8.5 trillion. As more and more companies are adopting digitalization, the demand for skilled tech workers continues to rise. Some countries have started offering incentives beyond money to attract workers. Greece has partnered with several venture capitalists to invest more in the domestic tech sector. Portugal has offered citizenship to tech workers. Arcadis has to match their competitor’s employee compensation rates and offer incentives to its workers to ensure that they continue to work at their company.

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Political

1. Push for clean energy by world leaders: Newly elected US President Biden recently chaired the Climate Summit 2021 to coincide with Earth Day. Over 40 national leaders were invited, and discussions were held regarding cutting down greenhouse gas emissions to reach UN targets ahead of the COP26 meeting to be held in Glasgow later this year. The summit also showed the world that the US was once again keen to rejoin global efforts to increase sustainability. US committed to cut down its greenhouse gas emissions by 50% by 2030 and UK promised a 78% cut in emissions by 2035 compared to its 1995 levels. Japan and Canada also committed to cut down emissions by 46% and 40-45% respectively. EU promised to cut down emissions by 55% below 1990 levels by 2030. China promised to reduce coal consumption and South Korea agreed to stop the public financing of coal-powered plants. Companies like Arcadis, which focus on building climate resilient solutions, stand to benefit from these developments.

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Economic

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Social

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Technological

1. Hydrogen-powered home heating technology to reduce dependence on natural gas: Countries around the world have committed to reduce GHG emissions and become carbon neutral by 2050 in line with the recommendations of the Paris Agreement. European countries have another problem to solve in the colder months; the emissions from heating homes using natural gas. According to studies, home heating is responsible for a quarter to a third of UK’s total GHG emissions. This is more than the aviation industry emits. The future of home-heating lies in using renewable sources of energy like hydrogen. Hydrogen heating would be convenient as it would still use the traditional boiler system and simply involve swapping the gas networks with hydrogen. However, it is an entirely new concept and there will be practical and technological hurdles on the way. Arcadis has partnered with 20 other companies to build a hydrogen-powered heating system in the Hoogeveen municipality of Netherlands. This will be a pioneer project where 80 new hydrogen-powered homes will be built along with conversion of 1,130 gas-heated homes into hydrogen-heated ones. If this project is a success it will pave the way for more such projects in different parts of the world and serve as a blueprint for future developments in the field of hydrogen-powered heating systems.

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Legal

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Environmental

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