Alok Singh
All Posts By

Alok Singh

Alok Singh is a Senior Analyst for Everest Group located in our Gurgaon, India office.

Simplifying skilling in Global in-house Centers (GICs) | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

With technological developments and digital disruption driving changes across most facets of global enterprises, it comes as no surprise that talent strategy has evolved from an HR topic to a board room agenda item. Because of their evolving role in how they can best support their parent companies, talent strategy is a top concern for global in-house centers (GIC) as well.

Through our extensive research in the GIC space, we’ve identified several trends among GICs that have experimented with upskilling and reskilling their team members to prepare and enable them to address today’s known and tomorrow’s as yet unknown challenges.

Trend 1: Investments in Skilling Mid-level Employees have been Underwhelming

Skilling Needs in GIC

Most GICs have dedicated skilling programs for senior management (Layer 3) and programmatic hiring and training programs for entry-level talent (Layer 1), including partnerships with universities/agencies. But, interestingly, there’s a big gap in GICs’ skilling practices for mid-level/Layer 2 employees.

Because Layer 2 employees form the backbone of a GIC by providing strong domain and process expertise, and typically have deep organizational knowledge, GICs need to escalate the skilling initiatives targeted to them. The right skilling practices for these individuals will be critical to GIC’s successful evolution and ability to sustainably deliver services in the future.

Trend 2: GICs are Experimenting – Starting Small across Multiple Areas, then Deciding Where to put Their Money

Because they’re lacking clarity on areas to prioritize, GICs are piloting upskilling and reskilling initiatives across multiple functions. These are typically small-scale pilots of less than 50 team members for less than three months. After evaluating the success of the pilots, GICs plan to scale-up the initiatives across their broader employee segments and organizations.

These pilots will help GICs decide where to invest. But they must also consider their peers’ best practices for upskilling/reskilling in the same or similar functions. This will help guide them in how to best avoid unproductive investments.

Trend 3: It’s Largely an In-House Game

GICs are primarily using in-house teams to develop and run their reskilling and upskilling initiatives. They believe they can reduce risk with internal teams that have a strong context and understanding of the business. This approach also allows them to experiment more, given lack of clarity on exact requirements and end results.

However, they may benefit by making selective use of external specialist providers in areas where they lack internal capabilities, such as use of gamification and simulation for training, role mapping and employee suitability assessment exercises, and change management training.

Trend 4: It’s Just a Part-Time, On-the-Job Affair

In most areas, GICs prefer part-time upskill/reskill training for their employees. Full-time training is limited to certain next gen skills, like digital, or across functions, e.g., of contact center employees in the use of analytics. When used, full-time training often occurs over just one to two weeks.

There’s no clear cut, overarching answer on whether the   part-time or the full-time model is a better choice. GICs need to consider factors such as complexity of the new skills, employee time off their current jobs, and the rate of previous training successes to choose the appropriate model in each given situation.

We recently surveyed senior leaders from 80+ GICs across India, the Philippines, and Poland to assess the changing nature of skills/competencies needed for the future, and the roles GICs can play in addressing the changing skill requirements. Contact us here to see the results, and to exchange perspectives on evolving skills needs and approaches to future proof your talent strategy.

And keep your eyes peeled for our next blog on this topic, where we’ll talk about best practices and how some GICs have upskilled and reskilled their team members.

 

Talent Management in Global In-house Centers: Are You Future-Ready? | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

There’s no question that digital technological advancements, evolving business requirements such as changing consumer needs and faster time to market, and a heightened focus on customer experience are significantly changing the profile of skills needed to deliver services. As most global in-house centers (GIC) are already facing challenges in hiring people with the right skills for the future, it is concerning that their talent-related preparation for such a tectonic shift is lacking.

Talent Management GIC_1

Here are four talent management imperatives for GICs to develop the workforce of the future.

1. Identification of Skills Gap

As automation and other technological advancements kick in, human skills, such as innovation, design thinking, problem solving, empathy, and ethical thinking will become more critical. Identification of skills gap will be pivotal for GICs’ talent acquisition and development strategy. A recent Everest Group study of 80+ GICs across India, Philippines, and Poland identified multiple, and difficult to hire, skills that are likely to become more important in the future.

Talent Management GIC_2

2. Upskill/Reskill Current Workforce

Firms’ talent challenges will intensify with the automation of transactional services. They will face the dual risks of a large existing workforce with many skills that are likely to become redundant, while struggling to find talent with the right skills for their future needs. Upskilling/reskilling existing talent is an important lever for GICs to address these challenges while preserving their trained workforce with string domain/industry know-how. (See our detailed report on upskilling/reskilling in GICs for additional perspectives.)

3. Evolve Talent Acquisition and Development Strategy

As GICs look to develop a future-proof talent strategy, they will need to think outside the box to tap into alternative sources of talent. Opportunities include hackathons, hiring from startups and other industries, project-based partnerships with specialist agencies, and flexible resourcing. From an L&D perspective, traditional classroom model needs to evolve as learning is becoming more real-time, customized, and digitized, e.g., MOOCs, simulation, and gamification.

4. Agile Human Capital Planning

With a dramatic decline in skills’ half-life, particularly in the technical space, GICs need to identify and focus on skills that are more likely to be critical for their growth. A more frequent approach to human capital planning might be essential to account for rapid changes in these skills.

While many GICs are still taking a wait and watch approach to the talent management issue, some have already embarked on this transformational journey. And those that are proactively addressing it are reaping big rewards.

Watch this space for more insights and success stories. And if you’d like to share your challenges, successes, or questions with us, please feel free to write us at [email protected] or [email protected].

Should Your Global Service Delivery Locations Portfolio Include Western Europe? | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

As enterprises move from an arbitrage-first to a digital-first model to gain business value beyond cost savings, and to lessen the impact of potential immigration-related issues, service delivery from locations that were traditionally considered “onshore” is gaining prominence.

Western Europe* is one region that has gained significant importance as a global/regional delivery geography over the last several years. Indeed, Everest Group’s research on the growth of back- and middle-office services delivery demonstrates a compellingly strong value proposition across all the countries in the region.

 

service delivery

* The Western European region is defined as Austria, Belgium, Denmark, France, Finland, Germany, Greece, Italy, Ireland, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and United Kingdom.

Yet, due to multiple misconceptions about the region, some readers may need to be convinced of its viability as a digital-first delivery location. Thus, here are some fallacy-busting facts from our recently-released report, “Emergence of Western Europe for Centralized Global Service Delivery to Europe”:

  • Myth 1: Western Europe is predominantly a source geography, not a delivery geography
  • Reality 1: Global in-house Center (GIC) setup activity has seen significant growth, with double the number of new setups in 2014-2016 compared to 2011-2013

service delivery

  • Myth 2: Western European cities cannot offer more than 10-20 percent savings
  • Reality 2: Contrary to popular belief, selected locations in Western Europe can offer cost savings up to 30-50 percent over tier-1 locations (e.g., London, Frankfurt, and Paris)
    • Barcelona, Belfast, and Lisbon offer the highest cost savings due to lower salaries and infrastructure costs

 

  • Myth 3: Western Europe is primarily leveraged by Western Europe-based enterprises for service delivery
  • Reality 3: In 2016, U.S-based enterprises established the largest percentage of new GICs in the region

 

service delivery

 

  • Myth 4: The value proposition offered by Western European locations is limited to support of European languages
  • Reality 4: Western Europe’s value proposition extends far beyond language to the availability of skilled talent, stable business/operating environment, cultural affinity, high maturity for certain niche services, and delivery of skill-intensive work. Multiple locations in Western Europe are particularly well suited for complex digital services (e.g., analytics, blockchain, and mobile development.)

Clearly, there are many reasons why Western European cities are playing a strong role in the delivery portfolio of a growing number of organizations that have highly advanced locations strategies.

Of course, there are multiple factors that could potentially alter the landscape of delivery from Western Europe. Issues global services leaders need to carefully consider include Brexit, adoption of digital technologies (e.g., social, mobile, analytics, and cloud), and likely changes driven by the General Data Protection Regulation (GDPR) and the European Central Bank (ECB.)

For a more detailed analysis of the value proposition of Western European cities, and relative comparisons of leading locations, please see our recent report, “Emergence of Western Europe for Centralized Global Service Delivery to Europe.”

Trump-type Protectionism Threatening Global Services in APAC | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

On April 18, President Trump signed an executive order for interdepartmental review of the H1-B visa program, a move largely aimed at curbing the allotment of H1-B visas to entry level IT professionals from other countries. While it took months for him to officially make a move, his protectionism agenda seems to be spreading far and wide, with several countries in the Asia Pacific region embracing similar protectionist stances to address unemployment.

Australia pulled the plug on its most popular temporary work visa, the 457 visa program. This program allowed companies based in Australia to employ foreign workers, for a period of up to four years, wherever they faced a shortage of skilled workers in the domestic market. It was largely used by global IT companies to source workforce from other countries, mainly India. The Australian government has stated that it will replace the 457 visa program with two temporary visas for skilled professionals. Certain IT skills (e.g., web developer) have been already removed from the list of ~200 occupations that qualify for these visa programs.

In a similar event, the Singapore government restricted the number of visas that can be issued to foreign IT professionals. This has impacted both new visa applicants and those seeking a renewal.

And two weeks ago, the New Zealand government announced plans to tighten access to skilled work visas in a “Kiwi-first” approach to immigration.

Crackdown on visas to skilled foreign workers a threat to global service delivery models

Policy changes that restrict movement of skilled professionals across borders can cause several operational challenges for the prevailing global delivery models of almost all major service providers. The regional delivery centers of leading global and Indian IT service providers based in these APAC countries are likely to face the biggest challenge, as the restrictions against importing talent will make them reliant on local, expensive talent. This, in turn, might negatively impact their margins.

In the short term, enterprises’ and services providers’ cost of operations might witness a spike due to limited availability of landed resources in the onshore workforce. Typically, the difference in cost between a landed and a local resource in most geographies is 10-15 percent. And, based on recently completed research, we estimate that service providers’ margins from onshore operations could drop by up to 16 percent due to the proposed changes to the H1-B visa program. This will likely require service providers to recalibrate their pricing strategy and/or revisit their onshore-offshore delivery mix.

In the long term, service providers are likely to push towards offshoring as a lever to protect their overall margin. And there might be increased instances of even complex work being delivered from offshore locations to reduce dependence on work-visas for onshore locations, in turn requiring increased training and upskilling of employees in offshore locations.

Do you have or run global services operations in APAC? Have you and your teammates formulated an immigration issue mitigation plan? Our readers would love to know how you’re addressing this challenge!

Learn more about Everest Group’s Locations Optimization practice.