Category: Talent

Hiring Advice In Light Of Potential Recession

Although companies are experiencing growth now, the signs are clear that a US recession is coming and likely will be upon us within a year. The Fed is starting to take measures to reduce liquidity and raise interest rates. Typically, recessions cause companies to pivot from their growth agendas into cost-saving agendas – including layoffs of staff. But layoffs would be a mistaken approach to a recession this time around. This blog shares my advice for handling the labor situation in the recession we now face.

Read more in my blog on Forbes

Strategies to Expand Labor Pools Today and in a Recession | Blog

In today’s hot labor market, with a difficult gap between talent demand and available resources, companies must try to widen the area where they can recruit workers, and hunt for labor pools in new, smaller markets. Google and other tech companies are reaching out to labor markets on the West Coast and in small markets in remote cities. FedEx and other large companies are investing in expensive TV ads to reach workers in non-traditional labor pools. However, the signs are clear that a recession will be upon us in months, and the new strategies for expanding a labor pool often have long run times. What are the best approaches to expand labor pools now?

Read more in my blog on Forbes

Ukraine IT Sector: Resilient, Agile, and Hopefully Here to Stay | Blog

The Ukraine IT sector has grown as a result of, and not despite, its humble, post-Soviet origins, and characteristics of agility and resilience appear to be serving it well. Read on as we share the viewpoint of our expert who traveled to Ukraine after the dissolution of the Soviet Union in this blog.

In March 1992, four months after the dissolution of the Soviet Union, I traveled to Ukraine to attend a hastily convened conference on the liberalization of post-Soviet telecommunications in the Commonwealth of Independent States. Delegates flew into Simferopol on a Swiss Air charter, and we took a rickety bus ride across the Crimean Peninsula to Yalta, the site of the eponymous wartime conference.

The conference was chaotic but enlightening: Soviet telecommunications had been so Moscow-centric that at independence, Ukraine did not have a singular, state-owned telecom carrier and virtually no direct international circuits. Disparate local networks loosely managed by the Ministry of Transportation and Communications were spread across Ukraine’s 22 administrative districts. These networks became Ukrtelecom in 1994, but outdated and inefficient fixed-line service was overtaken by rapid mobile take-up from the mid-1990s.

The results? A generation of Ukrainians grew up with mobility as their default. And the legacy of decentralized infrastructure led to a fragmented internet marketplace with ten or more internet service providers. Mobility and decentralization spawned an entrepreneurial and healthy, if not spectacularly large, IT services sector that now has some 290,000 professionals – 79% of them “individual entrepreneurs,” that was worth over $6.83 billion in export revenue in 2021, according to industry association IT Ukraine.

The Ukraine IT sector, innately agile and resilient, was in many ways prepared even more thoroughly for the dislocation caused by the Russian invasion, having endured 20 months of pandemic-enforced remote working. Anecdotal evidence, popping up in podcasts, on LinkedIn, and in mainstream media, suggests that the Ukraine IT sector is very much still working. Companies like Intellias and Sigma Software in Lviv, GeeksForLess in Mykolaiv, Reface in Kyiv, and many more, have contributed, according to IT Ukraine, quoted in an April 6 article on DOU.ua, to “almost 85% of [IT] companies operat[ing] in a normal business rhythm.”

How long the Ukraine IT sector can maintain that normal business rhythm, of course, remains uncertain. While some look to post-war opportunities in an independent Ukraine, created by the outflow of business from Russia and possibly Belarus, the current reality is that the reduced appetite by foreign businesses for risk and the execution of business continuity plans have meant that work has started to move outside Ukraine.

That said, I expect a significant share of work that is currently being delivered, and that can continue to be delivered remotely, will remain longer-term with Ukrainian companies or contractors, irrespective of whether specialists are operating in western Ukraine or outside of the country.

Indeed, Lviv IT Cluster, a body representing business, academia, and local government, claims that upwards of 40,000 IT specialists have relocated to Lviv in western Ukraine since the invasion, swelling the available talent headcount in the city to between 70,000 and 100,000. For now, internet and power in Lviv still function, and as long as they do, the Ukraine IT sector will find a way to continue its normal business rhythm.

To discuss the Ukraine IT sector further, please reach out to [email protected] or contact us.

Learn more about the current impacts in the Ukraine region in our LinkedIn Live session, How to Manage the Ukraine-Russia Impact on Service Delivery.

Will Service Delivery Change in the IT BPO Industry If They Say Goodbye to WFH?

The entire world responded to the sudden arrival of the pandemic in early 2020 by setting up mandates and reflex policies to keep people from gathering and exacerbating the virus. To keep the IT BPO industry running seamlessly, government guidelines for on-site working were relaxed worldwide so employees could work from home. After few initial hiccups, almost all the major global service delivery geographies e.g., India, Philippines, Poland etc. quickly adapted to the remote working delivery model, ably fulfilled services, and resolutely maintained service quality levels.

As  we return to post-pandemic norms, how are organizations, and employees, reacting to having to go back to the office?

Restoring pre-pandemic economic activity

With two years of the pandemic under our belts, governments are preparing for workers to head back to the office. The rationale provided by the governments is that getting workers out of their houses and back into the office, especially in larger cities, will help support local businesses and boost the economy as more workers visit restaurants and shops while they’re out in the towns and cities. However, most countries are finding that workers prefer a hybrid work model, enabling the benefit of getting people back into the bustling life of the city while also supporting those who need to work from home. In most countries the remote working experiment of the last two years has also led to the exponential growth of digital businesses models such as e-commerce, digital content, gaming, delivery services, online education, and others, which have as much of a multiplier effect on the economy as the traditional physical shopping centers and stores.

Organizations have taken very individual paths when it comes to workplace models in response to the ebb and flow of the pandemic. Some are choosing to stay in a WFH environment, others will be heading back to the office, and some are taking a middle ground approach by offering a hybrid model of each scenario. For example, Google has recently asked its employees to head back to the office this month (April), opting for a hybrid working model of three office days a week.

Regions are currently working with government leaders to determine next steps

There is a lack of clarity in government regulations in most countries on next steps and long-term acceptance of remote or hybrid working. In major global service delivery countries such as India, Philippines, Colombia, etc., the current set of monetary incentives for the IT BPO industry are tied to a physical space, or an office, in a specially designated area (e.g., SEZ in India, PEZA in the Philippines). While the employers have been granted special pandemic-related exceptions for availing these incentives even while working remotely, these exceptions are not long-term and are due to expire in the coming months in most countries. In the absence of permanent policies to support remote work, the industry will be susceptible to uncertainty and pressure of upcoming deadlines on the current exceptions.

For example, in the Philippines, the temporary relaxation for allowing tax incentives while remote working will expire on March 31, 2022. The IT BPO companies were asked to have employees back in the office from April 1, 2022, to qualify for the fiscal incentives once again. This sudden and major change led to many a sleepless night for industry executives. The industry was able to leverage a legal exception in cases of a “national state of calamity,” which allows for employees to work in the office 70% of the time and remain remote 30% without losing incentives. With this exception in place, most of the Philippines’ based IT BPO companies will be able to continue their hybrid workforce models till September 12, 2022.

In India currently, the IT BPO sector is working with the government to ensure that some form of hybrid work is drafted into the new legislation that will replace the Special Economic Zones (SEZ) Act, which is currently being rewritten to revive activities in SEZ areas. Similarly, key service delivery countries in the Latin American region are facing uncertainties with regard to government policies.

The need of the hour is clear for effective policies that allow remote or hybrid workforce models and decouple monetary incentives from the physical office location requirements. Knowing now what to expect in the coming months, whether employees are expected to work in the office or are able to move to a hybrid work environment, will help them better prepare.

How could back-to-office mandates affect the IT BPO industry?

Companies that rely on the global delivery models for technology and business process services should not make any changes right away but should consider a continuity plan and keep a close eye on how events play out. One possible risk to keep in mind is the chance that attrition rises as employees adjust to the new working circumstances if they are asked to return to the office.

Enterprises should also consider the possible ways the industry could be affected without a WFH element for IT BPO employees, not only to protect the population from the ongoing pandemic but when other emergencies come along, such as geo-political disturbances, natural disasters, etc.

A Reimagining of working models could be in order

The return to work dilemma begs the question of whether it’s time to rethink laws and policies, most of which were developed years ago at a time when working outside of the office wasn’t even considered a possibility. We may start to see policies changing globally as countries allow more opportunities for employees to work in a hybrid work fashion if they choose. Countries that fall behind in adapting to new workforce models will risk losing business to countries that make it attractive to employers.

Incorporating the possibility of a permanent WFH or hybrid workplace model in many regions would require a reimagining of policies and tax breaks so that business doesn’t become more expensive for companies and to support employees who need to continue working from home. The opportunity could bring even more success to the industry. The IT BPO industry, with 14% revenue growth in 2021, was one of the fastest growing industries and contributed to millions of new jobs.  Many firms around the globe will likely continue to have employees work remotely or in hybrid models as productivity, customer satisfaction, and new business continue to stay the same or improve.

For more information or recommendations on the status of service delivery in the IT BPO industry, reach out to Prashray Kala, or contact us directly.

Learn about how to create an experience-centric workplace in our webinar, Top Strategies for Creating an Employee-focused Digital Workplace.

Innovative Strategies Driving Talent Sourcing and Acquisition in the Philippines

The traditional strategies for finding the best recruits for jobs are changing. With the talent shortage across all industries, companies are taking innovative approaches to talent sourcing and acquisition. Where will your next-generation talent come from? To stay on top of the war for talent, read on to learn the emerging tactics and a comprehensive framework to expand the candidate pool. 

Traditional talent sourcing strategies

The commonly used practices for proactively locating the best potential hires for open or future positions are no longer enough with the great need and talent shortage. Traditional talent sourcing strategies have included:

  • Using internships to lure top prospects and hiring recent graduates
  • Hiring from within the same industry or location, which offers the benefits of domain knowledge and cultural fit
  • Relocating talent from other locations for their experience, skills, and ability to learn
  • Offering flexible employment such as part-time work and fixed-term contracts. While this is a growing trend, alternative talent for most companies is typically less than 15% of the total workforce, especially for IT and niche skills
Innovative talent sourcing and acquisition strategies

The quest for the right skill sets and talent is driving organizations’ hiring decisions and motivating them to try new operating models. Based on our latest research on the Philippines market and beyond, here are eight emerging talent sourcing and acquisition strategies to consider:

  • Acqui-hiring or hiring through Mergers & Acquisitions: Acquiring start-ups primarily to recruit their employees with specific talent
  • Satellite centers to augment traditional hubs: Setting up small satellite offices to diversify delivery location portfolios, creating extended “spoke” offices without setting up large physical sites to attract talent from a wider area
  • Collaborating with the external ecosystem: Strengthening connections with academic institutions, start-ups, and service providers to leverage their talent pools to develop holistic solutions, increase agility, and reduce go-to-market time
  • Work from Home or Anywhere (WFH/WFA): Exploring work from home or work from anywhere models now, particularly since COVID-19 has increased the acceptance and openness to virtual delivery models
  • Gamification/simulation-based screening assessments: Using gamification-based assessments instead of a traditional interview process with a focus on hiring for learnability and applying skills rather than possessing the core skill itself
  • Hiring next-generation talent and “problem solvers” through hackathons: Hiring candidates through coding events such as hackathons to attract a wider pool of talent from multiple sources and different backgrounds, and to engage with the student community
  • Co-creating a curriculum: Partnering with educational institutes to introduce curated courses for developing and attracting talent with specific skillsets
Comprehensive framework to expand the talent pool

Everest Group has developed the following comprehensive framework to incorporate the many ways organizations in the Philippines are widening their access to candidates to meet ever-increasing talent requirements.

Philippines Blog Image

Below are some approaches leading enterprises are exploring:

  1. Leverage tier-2/3 locations: Tier 2/3 locations: Bacolod, Cebu, Davao, Iloilo, and Pampanga (Angeles City, Metro Clark) for the following reasons:
    • Lower operations costs – Costs in tier-2/3 cities are 10-20% lower compared to a typical tier-1 city because of lower salaries and facility-related expenses
    • Better work-life balance – Tier-2/3 cities provide a decent alternative because employees don’t need to travel to tier-1 cities for employment. The growing adoption of the long-term WFH model may also increase the pool of tenured IT talent operating from these locations
    • Reduced risk – Tier-2/3 locations can act as Business Continuity Planning (BCP) locations to tier-1 locations, providing opportunities to diversify delivery location risk
    • Lower human capital costs – Multiple tier-2/3 cities offer a large, untapped talent pool with relevant skills, providing scalability and the potential to reduce people costs
    • Greater retention – Attrition rates in tier-2/3 locations are 10-15% lower than in tier-1 locations, translating into better service delivery and lower hiring and training costs
  1. Adopt the contingent workforce model: Using contingent workers such as freelancers, independent contractors, consultants, or other non-permanent workers offers cost savings, increased flexibility, and caters to workers’ changing preferences. This trend is growing with 36% of enterprises classifying more than
    16% of their workforce as contingent workers
  2. Increase the use of gig workers: Accessing next-generation skills in locations where companies do not have a physical presence for short-term assignments, tasks, or jobs
  3. Establish satellites/pods: Setting up small-scale (less than 50 full-time equivalent employees) or sub-scale centers, typically within a shared workspace to tap into new locations. Additionally, these arrangements enhance access to scarce talent and aid in Business Continuity (BCP) goals, provide a platform for possible collaboration, Centers of Excellence (CoEs), and offer flexible workspaces
  4. Adopt internal and external crowdsourcing: Leveraging social media and networks to spread the word about job availability. Crowdsourcing across companies has been on the rise
  5. Explore talent hotspots: Establishing a presence in emerging talent hotspots (e.g., Israel, Lithuania, Egypt) to access next-gen skills

We expect a notable increase in the adoption of these talent sourcing and acquisition strategies over the next six to 12 months by Philippines-based shared service centers and other organizations.

To share your comments and questions on talent sourcing and talent acquisition, please reach out us: contact us.

To learn more about the talent shortage and hear ways to rethink talent strategies and expand reach, watch our webinar, “Is the Talent War Threatening the Success of Your GBS?”.

Look at Latin America to Emerge Post-COVID as a Leading Global Service Delivery Destination

As the world emerges from the pandemic and looks for new destinations for high-end information technology and business process services, put Latin America on the radar screen for its lower costs, talent availability, language proficiency, and other factors. Learn why this region is an attractive emerging destination for global service delivery, what countries offer the most promise, and the trade-offs and risks.  

Latin America has emerged in recent years as a leading nearshore destination for companies in the US and Canada, primarily driven by its unique position of cultural parallels and geographic proximity to the North American market.

This popular delivery destination for IT and BP services has undergone dynamic shifts in the past few years, and its location can be increasingly critical post-pandemic to filling talent gaps and providing a more stable geopolitical climate than destinations in Europe, given the current Ukraine-Russia conflict.

Increased capabilities, aided by digital infrastructure investment, and scaled operations delivery are attracting companies to leading locations such as Mexico, Argentina, Brazil, and Costa Rica. Companies that are reimagining delivery in Latin America and growing operations in the region are differentiating themselves by capitalizing on the region’s attractive proposition.

Other favorable factors such as lower costs compared to North America, increased government support, and rising English proficiency are enabling growth, especially for the contact center industry. While promising, organizations need to be aware of some trade-offs and associated risks for operating in the region.

Trade-offs and risks

Organizations looking to enter the Latin American market should be concerned about market congestion, lack of digital infrastructure, and an unfavorable macroeconomic environment in a few key locations.

Leading cities in the region (e.g., San Jose, Mexico City, Sao Paulo) are experiencing growth in competitive intensity, threatening their cost arbitrage against North America. Moreover, countries like Argentina, despite their large talent pool, are facing major macroeconomic challenges brought forth by the pandemic.

On the other side of the coin, countries such as Jamaica, Uruguay, and Guatemala have low market congestion and are primarily leveraged for transactional BP services but have limited maturity in IT and engineering services. Organizations keen to support complex and judgment-intensive processes will need to make substantial investments in talent development in these markets.

Further Latin American destinations also face some challenges around reliability and digital infrastructure scalability. While investments are continuously being made in this area, certain countries within the region still rank relatively lower on the digital readiness scale. This potentially poses challenges for remote working in the post-COVID era.

Leading Latin American locations for financial attractiveness, talent availability, and operating and business environment

Latin America Blog

Here’s a quick look at the top four global services delivery locations by largest to smallest market size in Latin America:

  1. Mexico – boasts the largest scale among Latin American locations for global services delivery (both transactional and judgment-intensive processes). Leveraged to support IT-BP service delivery along with next-generation digital services (e.g., Artificial Intelligence, Internet of Things, analytics), the market faces one of the highest competitive intensity in the region, driven by a large player base and strong sector growth
  2. Colombia – primarily a global hub for voice-related services and transactional BPS delivery. Although it has limited maturity for next-generation digital services delivery, it holds the potential for increased IT and non-voice BP services delivery, given its large talent pool
  3. Argentina – a large-scale, multi-functional hub location to support service delivery to the Americas and some European locations. It exhibits relatively high maturity for next-generation digital services, including AI, analytics, cloud, and IoT, delivered from its highly congested Tier 1 cities
  4. Brazil – primarily delivers IT and BP services to Latin American locations. It has a large base supporting domestic demand (within the country) but global service delivery is limited. While it has a highly skilled talent pool supporting complex/niche skills and judgment-intensive IT work (e.g., cloud computing, big data), its more costly base owing to higher salaries and real estate costs affects its attractiveness as a global service delivery destination
Global service delivery destination to watch

Latin America is well placed in its growth journey to emerge as one of the leading nearshore destinations. Industry verticals such as retail, telecommunications, and Financial Services and Insurance (BFSI) continue to drive overall regional demand. Its unique positioning, strong government support, and growing talent pool make the region a destination of choice for some of the world’s biggest brands, including Amazon, PricewaterhouseCoopers, Galileo, and Pinterest, among others.

To learn more about the dynamics in the region, please read our recently published report Reimagining Latin America Delivery in a Post-COVID World, which highlights the relative attractiveness and talent-cost proposition of key Latin American locations to support global services delivery, based on our holistic and multi-faceted assessment across 12 critical parameters.

For more information on Latin America as a global service delivery location, please reach out us: contact us.

How the Russia-Ukraine Crisis Can Impact Customer Experience Management Services and Alternative Locations to Consider for CXM Outsourcing | Blog

With Eastern Europe serving as a major hub for Customer Experience Management (CXM), the Russia-Ukraine crisis poses a serious threat to service delivery. Now is the time for enterprises with large presences in this region to diversify delivery locations and mitigate risks.

Read on for our expert analysis on the state of CXM outsourcing here, the potential disruptions, and alternative countries to consider for multilingual customer service and tech support to ensure continued CXM services.      

Just as the world was looking to emerge from the global pandemic that caused a seismic shift in work and collaboration models, another highly disruptive crisis looms on the horizon. The recent geopolitical developments in Ukraine and Russia have caused the whole world to take notice, and with new sanctions kicking in every day, many are already preparing for adverse scenarios.

Given that this rift involves nuclear heavyweights in Russia and the NATO countries, the consequences could be far-reaching for the entire world. Consequently, these tense developments have created a lot of uncertainty and consternation for companies having a presence in the affected region.

Eastern Europe, which forms the immediate vicinity of Ukraine, is a major hub for delivering a plethora of customer experience management services for end-users both within and outside this region. Let’s take a look at the potential impacts to CXM outsourcing and alternative locations for CXM services.

Eastern European region CXM snapshot

As a strategic location for CXM services, eastern Europe offers strong multilingual capabilities, relatively inexpensive skilled talent, and cultural similarities and a minor time difference to western Europe. Leading global enterprises and Europe-focused players have a significant footprint in this region, putting them at risk in the current situation. The heatmap below illustrates the country-wise vulnerability index based on the number of delivery centers and corresponding CX agents present in each of them.

Screenshot 2022 03 23 084703

Potential CXM services disruptions and alternate solutions

Due to its skilled and relatively inexpensive IT talent pool, Eastern Europe is highly leveraged for its multilingual support for not only the regional languages such as Russian, Czech, Serbian, etc. but also for many of the major west European languages such as German, French, English, Spanish, and Italian. Poland and Romania also are sizeable talent sources for technical support.

Major cities in Ukraine such as Kyiv and Dnipro have been the most severely impacted by the armed conflict with Russia, and enterprises must accelerate Business Continuity Planning (BCP) measures to relocate affected CXM agents to safer parts of the country or outside of Ukraine to provide immediate relief.

If the conflict escalates beyond the borders of Ukraine in the coming weeks, major cities in Romania, Poland, and Bulgaria – which have the highest concentration of CXM delivery centers – could also be directly impacted.

We also envision a potential threat of cybersecurity breaches in Ukraine, inevitably causing collateral damage to its neighboring countries as well. While no one can foresee how the situation will unfold or its duration, enterprise clients must stay well informed and start devising backup scenarios and activate disaster recovery plans if needed. Although we believe the disruption will be temporary, a long-protracted war can’t be ruled out.

Alternative locations for CXM support services

Considering the uncertainty and volatility, let’s look at some viable alternate locations to help enterprises mitigate their emerging risks:

  • Multilingual customer support – Enterprises should consider new offshore and onshore locations to support major European languages for CXM outsourcing, as illustrated below:
    table
  • Tech support – The best strategy for enterprises is keeping their complex tech-related support in-house through onshore locations. However, for simpler queries, alternative nearshore locations such as South Africa and Egypt offer similar advantages that Eastern European locations can provide at lower price points without any dip in the talent pool. Even offshore locations such as India and the Philippines are suitable alternatives to consider as long-term tech support outsourcing locations

Mitigate risks

The last two years have taught enterprises the glaring importance of risk mitigation as a strategic priority to ensure service continuity, and this year seems to be behaving no differently. Customer experience has established itself as a true differentiator for enterprises of all sizes and shapes in every industry. As such, ensuring that customer support services run unhindered is vital for enterprises to achieve their business outcomes.

Now, more than ever, diversification of service delivery locations will become increasingly relevant to counteract the rising instability that the current geopolitical tensions between Russia and Ukraine as well as similar such events could bring in the future.

While we hope that this devastating humanitarian crisis comes to an end as soon as possible, enterprises that closely re-examine their service delivery footprints and proactively mitigate their risks will be better positioned to absorb any shockwaves that could potentially arise in the coming months.

With the continuing escalating events, it is important to stay informed on the latest developments in this region. Contact us at [email protected] or [email protected] to discuss your situation and solutions.

Discover more about the impacts to the service delivery ecosystem in our LinkedIn Live event, How to Manage the Ukraine-Russia Impact on Service Delivery.

You can also keep up on the impact of service delivery from Ukraine and the CEE region in our  resource center where you’ll find our consolidated coverage.

Five Actions GBS Organizations Must Take to Address the Global Business Services Trends and Challenges of 2022 | Blog

2021 was a milestone year for Global Business Services (GBS) with most enterprises reporting the model exceeded expectations for global business services solutions and delivery. GBS provided the needed strength and agility to seamlessly supply value without disruption from the pandemic. GBS organizations also saw higher Net Promoter Scores (NPS), a metric showing customer satisfaction and loyalty, with an increase of 10-25% in 2020 and 2021, and established higher stakeholder engagement and service delivery expansion.

With this steady stride set in motion, GBS organizations are now looking to approach 2022 with a renewed focus on increasing the value of delivering global business service solutions. They are striving to boost proficiency, digitalization, and customer-centricity while taking steps to adapt to current challenges like inflation, a talent deficit, higher costs, and the ripples set in motion from the pandemic.

So, what should GBS organizations focus on now to establish and meet expectations for 2022 and beyond?

Challenges Abound – A Global Talent Shortage Compounded by Rising Costs

Based on our report, It’s Not a Talent War; It’s a New Reality – 2022 Key Issues in Global Sourcing, GBS headcount growth is expected to be steady, with average growth moving from 4-5% in 2020 to 8-10% in 2021. However, with the current global talent shortage and inflation rates reaching as high as about 15% for some roles in 2021, expectations for salary will increase by about 8.1% in 2022.

The talent shortage will not be a brief bump in the road and will require short- and long-term strategies. We’re seeing declining population pyramids across North America and Europe, which means fewer new working-age people in the coming years. Specifically, 2.4 million fewer new workers are coming into the market than in the past five to ten years. India will bring 1.8 million more people into the workforce in the next few years but is showing an impending decline about ten years out.

Top Priorities for GBS Leaders in 2022

GBS leaders should act swiftly in 2022 to make addressing these challenges a priority. Our Key Issues study reports that GBS organizations plan to make cost improvement their number one priority. With the current talent shortage, GBS organizations must also focus on shaping the workforce they have today, including better integrating a future hybrid working model and reskilling and upskilling their workforce to meet evolving needs, among other strategies. Finally, even though GBS organizations thrived during the pandemic, many are getting back on the innovation and growth path and picking up projects that were sidelined during 2020.

Five Actions GBS Leaders Should Take to Address 2022’s Challenges

As GBS leaders rethink cost and talent strategies in 2022, what actions should they consider today and in the coming months to continue delivering value?

Action #1 – Advance Efforts to Shift to Hybrid – If You Fail to Plan, You Should Plan to Fail

In 2022, GBS leaders will look at adjusting their leadership, governance, operating, and talent models to ensure career growth and preserve productivity.

As workers moved to a work from home (WFH) model during the pandemic, most were surprised to discover how well employees and organizations adapted. The GBS industry learned ways to manage remote teams very quickly, and many workers today prefer to continue working from home. The hybrid model is emerging as the preferred working model to reach a balance and retain the benefits of working from home and the office. Our research shows that 70% of teams are likely to operate in hybrid models moving forward. However, many have reservations about maintaining performance benchmarks and ensuring data security, among other concerns. But with the pressure to meet the needs of their employees, many are bending to incorporate the hybrid model to avoid risking losing talent to other more flexible organizations.

Action #2 – Reset Expectations on Cost Arbitrage from the GBS Model

We saw wages increase significantly in 2021, many by 10% and more. This increase is more apparent for IT and engineering skills; however, we’re seeing increases across various roles and skills, including finance, supervisory, managerial, senior executives, business operations, and others. We expect an average wage increase of 8.1% in 2022.

GBS leaders will need to rethink how best to control operating costs. This could be done by assessing the scale of real estate needed or managing talent to retain value without overspending. Leaders will also need to reset expectations in light of the current changes and challenges and focus more on business impact than historical expectations.

Action #3 – Pivot GBS to Support the CEO Agenda Through Innovation, Transformation, and Operation Resilience

GBS organizations will want to pivot this year to focus on supporting the CEO agenda. With the current challenges top of mind, CEOs are looking for innovation transformation and operational resilience. Mature GBS organizations that aim to deliver an increased services evolution beyond arbitrage can deliver twice as much total business impact, whether through enhanced end-customer experience, accelerated digital transformation, increased productivity, or other methods. To do this, we’re seeing many GBS organizations develop multiple types of Centers of Excellence (CoEs), either within or outside of the GBS, to alleviate cost pressure, an absence of existing capabilities or innovation, or an urgent need for business model or digital transformation. The CoEs might target core operations, IT, talent, automation, or sourcing and vendor management, to name a few, and focus on optimizing and innovating various aspects of people, processes, and technology.

Action #4 – Execute Battle Plans to Navigate the Talent Wars – Understand the Talent Shortage Poses Serious Risks to GBS Model Success

A multi-pronged strategy with various tactics is needed to address short- and long-term talent challenges. These approaches could range from making the best of existing talent through engagement, reskilling/upskilling, and evolving the delivery model to rethink talent acquisition altogether. For example, GBS leaders could consider ways to stand out during college recruiting, find new methods to retain talent, or even look into different locations through options like impact sourcing. Finally, many are considering if now is the time to partner with universities to improve education and training programs and develop more project-ready talent.

Action #5 – Obsess Over Employee Experience

For our final action, GBS organizations should consider how to drive GBS employee experience at the enterprise level. It’s no surprise that enhanced employee experience results in improved productivity, efficiency, and innovation, better retention rates, and, ultimately, increased customer satisfaction. If GBS employees have thriving employee experiences, they will better serve the enterprise functions, business units, and internal and external stakeholders. Further, GBS organizations that focus on improving the employee experience and offer hire-to-retire services will maximize their capabilities and help deliver a better overall customer experience.

To learn more, watch the webinar, “5 Success-driving Actions GBS Organizations Need in 2022,” for expert insights from our analysts and the complete, in-depth breakdown of these five strategy actions. You will also hear from leaders from Cargill and Novartis on their employee value proposition and plans for future working models.

Short-term and Long-term Picture of Talent Shortage | Blog

Fiscal policy and spending, inflationary pressures, combined with the recovery from the COVID-19 pandemic recession, resulted in our current overheating economy that demands a larger workforce. Combine that demand with the multi-year global talent shortage plus the social dynamics of the “Great Resignation” and early retirements post-COVID. This adds up to far more than a short-term staffing and attrition dilemma. At Everest Group, we have studied this situation and what it means for short-term and long-term business concerns. Read on to discover the reality of what’s ahead.

Read more in my blog on Forbes

How Companies Can Find Required Skills despite Acute Talent Shortage | Blog

Companies today face a global acute talent shortage for the next three to five years. The pressing issue in this situation is finding or accessing the necessary talent to meet a company’s business needs. We at Everest Group launched an ongoing initiative to research and understand the different techniques and channels for talent acquisition. This blog explains some of the techniques that we uncovered.

Read more in my blog on Forbes

Request a briefing with our experts to discuss the 2022 key issues presented in our 12 days of insights.

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