Category: Talent

Potential War For IT Talent In 2021 | Blog

At Everest Group, we study a lot of forward-looking indicators, and we believe the service market prospects for next year are significant. In a recent blog, I talked about anticipating a robust market in the third-party services space in 2021. However, companies face a surplus of opportunities in the coming year at the same time as they face a scarcity of talent.

Read more in my blog on Forbes

Digital Reality Episode 15: Talent for the Future | Blog

This month’s podcast is all about the evolution of IT roles and the need for what we call Shift Right. In tech, we say Shift Left; when it comes to talent, three things contribute to the Shift Right: Right Scale, Right Skill, and Right Shape.

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Cecilia Edwards:

Welcome to episode 15 of Digital Reality, Everest Group’s monthly podcast that moves beyond theory and beyond technology to discuss the realities of doing business in a digital-first world. I’m Cecilia Edwards.

Jimit Arora:

And I’m Jimit Arora. Each month, we bring you a discussion that digs into the details of what it means fundamentally to execute a digital transformation that creates real business results.

When we were entering 2020 and talking about digital transformation, one of the biggest concerns that CIOs had expressed was their ability to get the right talent at scale and speed to support their transformation agendas. Pretty much every hot skill was in the red, based on our analysis, which looked at the demand-supply mismatch between the different skills across different geographies. And in a lot of these hot skills, such as machine learning, AI, and cloud, we saw that demand was exceeding supply by over 40% in select markets.

So, in this very changed environment as we close out the year, we’ve seen a few very different things play out. The one real thing has truly been that digital adoption has accelerated. And one of the things that we’ve always kind of spoken about is that technology is the relatively easy part of the change agenda. It’s the people part, be it the talent or the organization, which needs a lot more focus.

CE:

Right, the culture.

JA:

Absolutely. Absolutely. Any time you say, “Hey, technology is the easy part of digital transformation,” you get a funny look from the technologists. But if you talk to the leaders, you talk to the CIOs, they’ll agree with that. Maybe it’s because they don’t have to actually do it, but essentially it comes down to managing the people agenda, the organization, the culture, as you rightly said, Cecilia. And we see now more than ever before, just given the pace of change we are looking to drive to, the big demands on talent due to the scaled modernization efforts. And then also, if you think about the change that has happened in the operating model, in terms of how we work, where we work, all of this is truly emphasizing the need to look at talent in a fairly different manner than what we were at the beginning of the year.

Which is why today’s podcast is all about the evolution of the talent base, the evolution of the roles, and the broad theme is what we call shift rate. Again, in technology, there is a desire to do more automation, we call it shift left. When it comes to talent, we are saying, “Hey, let’s shift right.” So what do we mean by shift right? It’s building the right scale, it’s creating the right skills, and then defining the right shape of your talent model to really succeed in the talent transformation agenda.

Cecilia, I know we’ve spoken a lot about these three “shift rights.” So talk through the right scale pieces that you’ve been helping clients figure out over the last few months.

CE:

Okay, great. And for those of you who don’t know Jimit well yet, he loves alliteration. So, I will kick it off with our first “R.” so, here are some stats.

JA:

Cecilia, just one thing the “R” and “S”. So, right, right, right, scale, skill, shape. So, yes, I do love my three’s and the alliteration.

CE:

Seeing a double.

JA:

The double alliteration this time.

CE:

That’s right. So, here are some stats. According to a recent study, about 58% of organizations do not have sufficient internal resources to drive their programs. 58%. Furthermore, more than 90% are unable to source and train their talent on key next-generation capabilities. So, that whole model of on-the-job training and seniority, that’s kind of not working. So, these issues get further compounded by challenges related to attrition and project readiness or thinking about the time-to-value of these resources. So here’s where we see a pretty significant challenge in the current environment, and we think that coming out of this pandemic, there really is an excellent opportunity to go back and fix the scale issue at a time when the market’s not yet super hot.

So, some of the key things we see in companies looking to right scale their environments are these. First, they need to forecast the demand to get an objective view of the gap assessment and plan accordingly. That’s obviously going to be a little bit more challenging, but it’s a critical first step that they need to do in terms of right scaling.

Second, they need to create centers of excellence for the areas that are the hardest to find, and they need to drive the company’s recruiting efforts accordingly. You can no longer just have a, let’s say, fair recruiting approach or a generic model. You really need to focus on those areas that are going to be hardest to find.

They need to re-skill. Re-skill and not just replace. So, we’re going to capture this right skilling in a little bit, but you need to do some re-skilling.

You need to partner with the ecosystem. Academia is actually a great place to incubate and absorb talent for the future. I had a client last year who was in the middle of the Midwest, and you’re kind of going, “Where in the world are you going to get the talent?” And there was a school not too far from them. And you know what? They’ve had their best success by partnering with the local universities. So you to actually think about if you’re going to train up the people, why not train them in the skills that you need? So partnering with academia is a great place to do that.

For the remainder. They need to build a robust pipeline of services partners that can ensure that the talent is available and ready when the demand hits. So, there’s this whole piece around, make sure you know what you need, focus with the centers of excellence, think about re-skilling and not just replacing, and then find ways to create a pipeline that’s going to be helpful in your ecosystem. And then at the same time, go ahead and borrow skills from your partners. A group of service partners that can do that for you when the demand hits. So, that sort of helps you with the flexibility of demand that we all know is part of the current business environment.

JA:

Actually, I just have a quick question for you. So as you go back to that first thing, when you mentioned a forecasted demand, we’ve seen that the time horizon that people need to look at needs to change. So, traditional planning assumptions were for a one-year period. What are you seeing change there? Is that becoming longer shorter? What’s your sense?

CE:

We’re actually seeing this interesting combination. It’s got to be shorter, but it also has to be longer. So, weird mix. They actually are needing to still think through what the one-year and three-year plans are going to be, but that cannot be your demand forecast that you’re reacting to. You’ve got to pull that in into much shorter horizons, which is why, if you think about all of the things that we just mentioned, things like partnering with academia, that’s actually going to help you with a longer-term plan. It’s going to help you next year and the year after that, to make sure that you have a flow. If you think about connecting back into that pipeline of services partners, that’s going to help you with the things next month. And so they’re actually having to plan both time horizons, but it certainly, I think, more than ever before, the planning cycle on the shorter end is something that is going to be relatively new for most organizations. And they’re going to have to think about strategies a little bit differently.

JA:

Yeah, that’s a great point. I think what we’re truly seeing is this whole thesis of agility permeates every part of the IT organization.

CE:

Every part.

JA:

You’ve got delivery, you have agility in budgeting to make sure that you don’t create static one-year plans. And now you’re saying that, hey, you need that same agility as you also start thinking about building your talent pipeline.

CE:

Absolutely. Absolutely. So a great example of this right scale is the right scaling initiative of AT&T. It has a vision to change business from hardware to cloud and from a landline business to a mobile-first enterprise. So, the situation was that about half of their employees didn’t have the necessary skills to keep the company competitive. Those are some pretty big shifts. To move to the cloud, but even moving from a landline business to mobile-first, pretty big shifts, and they just didn’t have the talent. The cost of hiring new employees was greater than retraining the existing ones, and replacing workers meant making new ones learn the company culture from scratch – that was going to be a really big challenge.

So, here’s what they did. They started a future-ready initiative where employees were able to get trained by web-based online courses on things like data science and cybersecurity and agility, all of these skills that were going to be necessary in this cloud-based mobile-first world. They developed an internal portal called Career Intelligence where workers could actually see the jobs that are available and the skills that were required for each and the projected salaries, and whether that area has a scope for future growth because what that did is created some incentive because you could see where the opportunities are and then take advantage of things like the future-ready program to train yourself up on skills. And you have a sense of not just why it was good for the company, but how am I going to benefit from it as well? Because I can look at where the salaries are and where the opportunities are for other jobs within the company.

And then the third thing they did was they collaborated with Georgia Tech to launch an online master’s degree program in computer science. So again, they were focusing on: I have a pool of people here today, I’m going to do what I can to re-skill them, work on the culture a bit to motivate them, and then think about longer-term how I’m filling that pipeline so that the marketplace outside of the organization, that those new people coming in would actually have the skills that they need. So there’s a little bit of a summary of our right scaling.

Jimit, do you want to talk about skilling?

JA:

I sure do. I think the last point you made about what AT&T did with Georgia Tech, it actually serves two purposes. One is you’ve got these programs that help you with right skilling, which I’ll get to in a second. But it also, in some ways, acts as a finishing school where maybe in the last semester, there’s a bunch of specialist courses that just make you AT&T-ready so that the company has to spend a lesser amount of time in the first six months to just onboard them on the things that matter. So bridging the gap between academia and business while the students are, are finishing school.

CE:

That’s a great point.

JA:

I’m a great fan of these collaborations between big business and academia. So, right, scale, and this is the one that actually gets a lot of attention, so I don’t think we need to unpack that too much. Most organizations that you speak to instinctively recognize the need to rescale, upscale, right scale. And what we are now seeing is a new set of operating models, which are causing us to redefine the existing job descriptions. And also new roles are emerging. In fact, in the same study that we’d completed earlier this year, about 67% of the organizations said that they expect new skill gaps to emerge because of structural changes in the business, given the current situation.

Let’s take networking as an area. It doesn’t get spoken about a lot, if you think across, everyone’s focused on the agile development on the cloud side, cybersecurity, underpinning all of this as the big network and, hey, we started talking about AT&T, so let’s stick to the team.

We place significant demands on infrastructure in a work from home environment.

And Cisco, for example, identified five new roles that are focused just on making sure you have resilient networks that are secure, that have the throughput to make sure that people stay productive. The one that I find the most interesting is the one called a business translator, and this role effectively takes the business need into a service level security and compliance requirements that can be applied and monitored across the network. And this is astounding. It’s starting to say that there’s a hierarchy of business needs and the network configurations that you need to support these need to be thought out and planned. That’s what that business translator is doing. I know we’ve had variants of this in terms of within your data center, you’ve got X levels of redundancy, but this is trying to create more granularity into that process.

Similarly, we’ve got new roles coming in such as a network guardian, somebody really got creative with these names, I must say. You’ve got a network guardian, you’ve got a network commander who centrally manages automation and orchestration processes to drive intent-based networking. You’ve got a network orchestrator, and then this is my favorite, truly is, you’ve got a network detective. So, what does a network detective do? They queue network assurance tools to ensure that the business intent we identified is being delivered and then work closely with the ITSM and SecOps teams to really identify if there are any places where, well, if it’s a detective if theft is happening in the network protocols, I guess.

CE:

Yeah. As you think about things like network, it’s one of those things that you mentioned that doesn’t get a lot of attention because you just assume it’s just the pipes and it’s taken care of. And I think that it highlights the need to really take a good, hard look at the kind of talent that you need because this environment that we’re in is making us rethink a lot of the things that we took for granted, and those things that were in place and worked extremely well in the old world now have different demands on them. And you just kind of highlighted a few of them, as people are working from home all over the place, you need to now rethink these things. And it’s not the exact same skill that was there before. This network detective’s job just got a whole lot harder with the entire workforce being distributed all over the world and in homes and in any kind of environment. So, definitely important to rethink all of the roles that you have in IT now.

JA:

Here’s the interesting part. What you see on the network side, you take that to applications, you probably have the best examples there. So, the traditional developer tester is becoming a full-stack engineer. You’ve got DevSecOps engineers. And here’s the part that I find the most interesting or frustrating as you start looking at the job requirements which are cookie-cutter, “Hey, I need Technology X, seven years of experience.” Technology X has been around for three years. So, that’s been the traditional mindset. Guess what? You aren’t going to find these people out in the marketplace. And what you really need to do is you need to take who you have right now, re-skill them to fill the gaps in their capabilities to become what you need. So, we’ve done a lot of analysis in terms of what are the best skill pairs. So, if you want to get to a network detective or a network orchestrator, the places where you will start is with your Cisco-certified network engineers. You just want to augment what they have and take it forward.

CE:

So, Jimit, let me ask you this. It seemed as though, not too long ago, we’ve been talking about talent for a while, that one of the themes was: it’s hard to re-skill. Who’s going to teach people how to do it? Where’s that coming from? Have you seen a shift, as we’ve been dealing with this challenge for a while, that there are more resources available to support this re-skilling?

JA:

So, I’d say there are more resources available. It doesn’t mean that it’s become any easier. And as you mentioned in the AT&T example, it’s always more expensive to replace versus re-skill with budgets being under the pressures they are, and only about to get worse. I just think that companies are getting more and more creative in terms of trying to do what they can with what they have versus just going out to look into the market.

CE:

I’d imagine that the online has become a much more acceptable form of re-skilling?

JA:

Oh, absolutely. And you know what? Let’s take an example from the most innovative company out there, which is Amazon. Most innovative, let me back that up, I’m sure I’ll get hate mail for saying that. But if you look at what they’ve done and to think of Amazon struggling with anything when it comes to technology skills comes as a bit of a surprise, but they’ve made a lot of progress in automation. Where they were lacking was in the areas of data science and solution architects of all things. So what did they do? They initiated the up-skilling 2025 program. So, that’s a five-year horizon to retrain the workforce, create a machine learning university. So, there you go. So, that’s an online program which allows people to do self-service, self-based training.

They set up an Amazon Technical Academy, which allowed people with non-technical backgrounds to take up more technology-centric roles, and then most important, and I think this is key to the success of this, is you create learning pathways, which are tailored to the … I wouldn’t say individual, in some ways they are, but you identify personas or archetypes. And then you make sure there are trainings and certifications which help you advance these capabilities. And at the same time, you link performance incentives, where it’s not a penalty, but you get additional growth if you keep progressing on those milestones as defined. So, they’re making it very easy and they also incenting the right re-skilling behavior because they know it’s cheaper for them in the long run.

CE:

Yeah, and I think in both of those examples, AT&T and Amazon, they have a combination of, I’ve got to put the training in place, but I also have to address the cultural component. I have to provide some level of motivation for the people in order to want to participate in these things. So, very interesting.

JA:

Absolutely.

CE:

So, should we talk about right shaping? That’s the third “R.” We see that the third turn that companies need to make is really to ensure that the shape of their workforce is aligned to contemporary requirements. So, that classical pyramid-based approach to services delivery and the commoditized role definitions is really giving way. And I think, Jimit, you mentioned this in an example, just a few minutes ago, it’s really giving way to that full-stack, multifunctional teams, which have both business- or customer-aligned pods that combine technology and functional skills and essentially collapse the previous pyramid structures.

So, I know that was a big mouthful. The takeaway is multifunctional, business-oriented. You’ve got to look at tech and function all combined. So, that whole pyramid structure is really giving way to product-aligned teams, with some companies creating DevOps factories or benches to manage all the different variances in demand.

Another very important dimension of the right shape is also in terms of how companies think of the transition from STEM to STEAM. So, there’s an extra “A” in that second one. The “A” in there represents arts and humanities. So, if we think about digital transformation as helping organizations create breakthrough impact in customer experience and user experience, non-technical skills start to have a really important role to play in the shape of the delivery organization. And so, all of those become really important. So again, you take the full-stack, multifunctional, business-aligned technology, functional product, and non-technical all working together in this very collaborative way that actually helps collectively deliver the talent and skills that organizations need.

JA:

You mentioned this before, and I think it’s important to underscore the point. The whole focus on culture is really key to making sure that the scale, the skill, and the shape really come together to deliver high performance. So, the terms you tend to hear a lot is this whole thesis of a high-performance culture. And again, anytime you get into some of these squishier aspects in a budget constraint environment, then you get a few of the eye rolls, but then if you go back and unpack, why are people really putting this culture in place? It is because it’s actually a very tangible ROI defined through better productivity, velocity throughput.

So, don’t let anyone talk you into, “Hey, culture can be relegated to the sidelines, not important. I’ve got a budget to meet.” The way you meet those budget numbers is by creating this high-performance culture. What research also shows is that the high-performance culture at a team level eliminates the rock star developer role, and then you find that the team always outperforms a collection of very capable individual contributors. So, some very profound implications of not just setting up the right talent model but also making sure that you have the culture backing it up to make this succeed.

CE:

Absolutely. Whenever I hear that conversation, I’m always reminded of the All Star games. I don’t think they’re very good. You get the rock stars from a bunch of different teams together and just throw them together, and there’s no magic because they don’t have a culture. They haven’t worked together. They’re not really a team and they all want to do the rock star thing. And I think that the teams that have worked together and create that culture and rely on each other and have the mix of skills all blended nicely, definitely have the opportunity to perform better.

So, this has been a really interesting year for talent development, from a position of demand significantly exceeding supply. We have some normalcy in the talent market and more talent is available now and organizations have that opportunity to shift right on their talent journey.

So, in every podcast we call out our lessons – we call those the digital reality checkpoints. So now, obviously, I have three again for us this month. The first is put the three-year roadmap in place to shift right. That’s right scaling, right skilling, and right shaping of your organization. You need to think about that long term, even though you have to act short term. So put that three-year plan in place. The second is emphasize a culture in the organization that rewards high performance teams and drives greater alignment between business and IT. And finally, define the skills passport and the learning platform to enable your organization to respond to the dynamic needs of the business environment.

JA:

Thank you, Cecelia. And thank you for listening to this episode of Digital Reality. You can check us out at www.everestgrp.com or follow us on LinkedIn @jimitarora and @ceciliaedwards. If you’d like to share your company story or have a digital topic that you would like us to explore through alliterations you can reach out to us at [email protected]

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Preparing for the Future – COVID-19 Implications for the HR function | Blog

Over the past couple of years, the HR function has experienced drastic changes, particularly in the way employees work, learn, and communicate. The pace of change has been exponential, with enterprises pushing for digitalization. However, no one would have imagined that a single global event, the COVID-19 outbreak, would accelerate one of the greatest workplace transformations of our times.

Digitalization is crucial, as it will help companies enable their internal functions with collaboration and productivity tools for employees and improve operational efficiency with agile business continuity plans.

The acceleration can be credited to the urgency to support employees working remotely so the business can run as smoothly as possible and provide a superior employee experience amidst the panic and uncertainty. With businesses struggling to survive in the face of, what is likely, one of the harshest recessions to date, it’s vital to understand the changes that will be brought about by this global pandemic. These changes will be facilitated by newer technologies such as Artificial Intelligence (AI), Internet of Things (IoT), and automation, and force companies to rethink their existing structures and guidelines

Here’s a look at how HR needs to change to ensure a great work environment in the next normal:

001

Incorporate policy changes for the next normal: With the strain of the coronavirus confining everyone to their homes, companies across the globe have mandated or are encouraging employees to work from home. And this model is expected to stay. Even after the pandemic ends and employees return to their workplaces, remote work will continue to hold significant relevance as enterprises realize its cost-benefit and commit to finding other methods to support business continuity. To ensure its success, companies will have to develop processes and inculcate policies that enable flexible working – establishing guidelines for working remotely, managing employee productivity in physical and digital workspaces, and formulating guidance for managers handling a distributed workforce. Further, the use of digital workers and bots will increase, which will, in turn, result in an urgent need to develop policies regarding cybersecurity, auditing, and redefining instances of human intervention.

Ensure undisrupted workflow: With the new and restructured workforce, companies are also looking to digitize the workplace and automating various processes and workflows to increase efficiency. Thus, HR solutions for automated employee onboarding, automated helpdesk, and productivity tools, along with communication and collaboration tools, are gaining traction in the market. For instance, the adoption of Microsoft Teams and Zoom have dramatically increased, and the uptake will continue.

Utilize the power of virtual learning: Businesses that have typically relied on face-to-face/classroom learning will have to develop a proof of concept for learning using the latest online technologies. The remote working model and increased leverage of digital technologies will also increase the need to upskill and reskill the workforce. In light of COVID-19, enterprises have become extremely cautious with their spending and are seeking cost-effective solutions for their workforces, which adds to the appeal of remote learning. To derive maximum benefit, organizations will have to look not only for relevant skills and talent but also for tools to enable smart learning, as well as enter into partnerships with traditional and non-traditional learning organizations.

Focus on health and well-being: COVID-19 has brought the importance of employee well-being, which encompasses physical, mental, and emotional health, to the forefront. The HR wellness agenda for the future will have two facets: One, the employee side, which includes tools and policies that help employees plan their day-to-day activities, particularly when working remotely and have to deal with increased stress and added concerns of changing benefits ranging from health and hazard to leave policies; and, two, the operations side, which includes tools that track employee sentiment and help improve employee support, thereby ensuring better employee engagement.

Develop new talent acquisition and workforce management practices: Every process in the acquisition value chain will be overhauled to make it more efficient – from the use of AI and Machine Learning (ML) algorithms to source and screen candidates to the use of video interviewing tools to enable remote presence, and chatbots to ensure a superior candidate experience and engagement. Following the COVID-19 crisis, the job market is also set to undergo massive changes; while the demand for some jobs will increase, the overall job market will slow. Enterprises will need to conduct powerful workforce planning to ensure their access to the right talent, and strategically structure existing talent to ensure maximum engagement and productivity.

Use analytics to track workforce- and engagement-related data: As the workforce becomes increasingly (and literally) spread out, and as new ways of working emerge, HR leaders will have to keep track of their organizations’ pulses. Efficient data collection and mining tools will be key to understanding the nature of changes. Organizations will increasingly adopt tools that track how employees work, perform, collaborate, and feel to derive insights to improve operations and engagement. These tools, along with advanced AI capabilities, will also deliver actionable insights for more informed decision-making in a shorter time.

Keep employees motivated: With increasing instances of pay cuts and the uncertainty of the current situation, enterprises are looking for effective strategies to keep their employees engaged and motivated. Deploying a robust R&R solution that quickly recognizes and rewards valuable employees for their effort and commitment to work can help organizations mitigate some of the impacts of the ongoing pandemic and the slowdown, and as a result, boost employee morale.

Emphasize on financial wellness: With the increasing number of layoffs, instances of pay cuts, and market fluctuations, financial security is a significant concern for many employees. To curb these types of fears within the workforce, companies can provide employees with financial wellness options. Features such as budget management tools, financial coaching, and financial stress management tools, as well as the offer of paid leave, on-demand paychecks, and pre-paid cards, can help during these unprecedented and trying times.

Automate tasks, humanize processes: While HR must redesign processes to make them more efficient, it is far more important to keep the employee at the center of these processes rather than the function. This crisis is an opportunity to redesign around the central stakeholder – the employee.

These strategies will help enterprises survive in the new normal while keeping their employees engaged and satisfied, whether they develop them in-house or partner with service providers to deliver them.

Is your workplace future-ready? How do you see the HR strategies transforming? Share your inputs with Priyanka Mitra.

Will COVID-19 Amplify Acqui-hiring and Help Companies Win the War on Talent? | Blog

COVID-19 is truly turning out to be the black swan event of our lifetimes – it will have profound near- and long-term consequences on talent markets around the world. The International Monetary Fund (IMF) recently noted that COVID-19 could contract the global GDP by 3 percent in 2020, causing the GDPs of 170 countries to shrink and making it the steepest downturn since the Great Depression of the 1930s. As discussed in our recent blog, Will COVID-19 Ease the Relentless War for Talent?, talent shortages will become even more acute and the supply-demand gap for emerging skills will further widen as companies undertake rapid digital transformation and adapt to the “next normal.”

Against this backdrop, some firms are seeing this time as an opportune time to acqui-hire – or acquire startups primarily for their talent.

We have been here before. Acqui-hiring tends to spike during and after economic crises. The early 2010s saw a flurry of acquisitions by Silicon Valley giants including Facebook, Google, and Microsoft, aimed at acquiring hot skills. We believe there will be a similar acqui-hiring surge in 2020, with multiples firms announcing plans to acquire emerging skills and accelerate their efforts to build niche capabilities.

Why do companies acqui-hire?

Mark Zuckerberg once said, “Facebook has not once bought a company for the company itself. We buy companies to get excellent people.” This sentiment highlights the premium companies place on good talent. Companies acqui-hire to leverage multiple advantages such as access to highly-skilled talent, reduced time-to-hire and training efforts, developing niche capabilities, and launching a business model.

Facebook has plans to hire 10,000 additional FTEs in its product and engineering teams to tackle high utilization after the pandemic abates and to combat misinformation in advance of the U.S. presidential election in November. Amazon and Google are aggressively hiring product, design, and engineering talent. Apple CEO Tim Cook recently stated that the company plans to hire aggressively, just as it did after the 2008 financial crisis.

With multiple startups facing reduced valuations due to the economic downturn, it is highly likely that a significant chunk of this demand for talent will be addressed through focused acqui-hiring. Additionally, we expect leading Indian service provider players supporting global services delivery, like Infosys, TCS, and Wipro, to accelerate their acquisition efforts to gain strategic capabilities and grow business inorganically. And Walmart Labs has announced plans to hire over 3,000 FTEs for its India centers, aiming to strengthen its India COE by hiring new talent and acquiring relevant startups.

We are already seeing many acqui-hiring deals in 2020, a few of which we describe below. While not all were triggered by the COVID-19 aftermath, we expect the business and economic repercussions of the pandemic to accelerate this trend.

  • Google recently acqui-hired Superpod, an app that allows users to post questions and quickly receive answers from experts, to boost Google Assistant’s capabilities.
  • Tata Group-owned Titan Company, a traditional watchmaking firm, recently acqui-hired HUG Innovations to strengthen its smartwatches and wearables division, and plans to set up a development center in Hyderabad to cater to hardware, firmware, software, and cloud technology.
  • KPMG India acqui-hired Shivansh Solutions, an SAP consulting and implementation services provider, to augment its technology implementation practice, retaining Shivansh’s directors and the core team of SAP consultants.
  • Leading tech-enabled logistics marketplace, LetsTransport, recently acqui-hired and onboarded the team of a web and mobile app development startup, Pixlcoders, to strengthen its supply chain, technology, and applications divisions.
  • Alphonic Network Solutions, a leading mobile application development company, recently completed the strategic acqui-hire of Roaring Studios, a digital startup to augment its web and mobile app development.

As these deals indicate, acqui-hiring presents a great value proposition for companies to access highly motivated ready talent, augment existing offerings, and develop new capabilities. It also proves lucrative for startups, especially those that might be struggling with funding during an economic downturn. We are already seeing early signs of funding scarcity, with industry analysts reporting that total startup funding in New York City is down 48 percent from year-ago levels since the lockdown started in mid-March.

Acqui-hiring can be a win-win for everyone. However, to ensure acqui-hiring success, companies must address critical factors beyond the usual legal and contractual due diligence.

What makes acqui-hiring work?

To make acqui-hiring work, companies must:

  • Explore cost-benefit trade-offs – While multiple acqui-hire opportunities may exist in the market, assess their strategic near- and long-term priorities, and shortlist startups that align with their firms’ objectives and address crucial talent-supply demand gaps.
  • Assess culture fit –Ensure that the acqui-hired talent, who usually possess an entrepreneurial mindset with a constant need to create, has the capacity to adapt to a systemized, rules-based corporate environment.
  • Evaluate employee attitude –Make sure that the relevant skills are accompanied by the right attitude to avoid potential attitude issues.
  • Ensure smooth integration – Properly manage the integration process to eliminate in-house talent’s apprehensions about, and potential resentment toward, acqui-hired team members.

The way forward

The economic aftereffects of COVID-19 will surely create some paradoxes. While on one hand startups may be challenged and job markets ravaged, on the other hand this time could present an opportunity to re-strategize priorities, revitalize operating models, build capabilities, and acquire the right talent. We believe companies that proactively realign their workforce strategies and tactically utilize acqui-hiring will emerge stronger and more resilient.

Companies looking to acqui-hire as way to address emerging talent challenges must undertake the following steps to ensure effective outcomes:

  • Review the global workforce strategy and identify relevant talent supply-demand gaps
  • Identify and evaluate potential acqui-hire options
  • Undertake comprehensive legal and contractual due diligence
  • Develop a comprehensive roadmap for integration with the existing operating model.

We’d love to hear your thoughts on acqui-hiring as an effective talent acquisition strategy. Please share with us at: [email protected] or [email protected].

Will COVID-19 Ease the Relentless War for Talent? | Blog

While some people in the global services industry think that large scale unemployment and the slowdown in growth due to the COVID-19 pandemic may reduce the talent demand-supply gap, we wholeheartedly disagree. Indeed, we believe that strategic workforce planning has become even more critical for the global services industry.

Here are four reasons why organizations need to accelerate their workforce initiatives right now.

Talent shortages will become acute

A survey we conducted in early 2020 found that, even before the COVID-19 crisis, 86 percent of enterprises considered the talent shortage a key barrier to achieving business outcomes. This situation will further exacerbate. It’s true that the impending economic downturn could lead to even more unemployment and oversupply in the talent market. However, the available skills profiles may not necessarily match organizations’ current and future requirements, especially because highly skilled talent is expected to be retained even during downsizing. Increasing focus on automation and digital transformation will further widen the demand-supply gap for skills, making it difficult for organizations to source suitable skills internally or in the open market. The prevailing circumstances (e.g., the lockdown, financial distress, and health issues) may impact overall talent employability in the open market, further compounding the talent availability issue.

Rapid digital transformation is inevitable, and it will intensify the demand-supply gap

COVID-19 has accelerated digital transformation across organizations. It has not only reinforced the utility of tech-enabled platforms and advanced automation for seamless service delivery during mandatory Work-From-Home (WFH) protocols, but also enabled organizations to react to the evolving business environment and customer needs faster. The impending budget cliff and business model changes will further push organizations to prioritize digital transformation, which will have implications on the talent needed both to drive this change and to deliver services after transformation. Demand for emerging skills will spike even faster, again creating the need for reskilling, alternative talent models, and productivity enhancement. We are already seeing a spike in hiring by companies like Amazon and Google. Some firms are seeing this as an opportune time to acqui-hire – or acquire startups primarily for their talent. Leading global banks, healthcare firms, and manufacturing firms are rethinking their talent strategies.

Supposedly foolproof location and BCP strategies did not work in the face of this pandemic

COVID-19 has exposed key issues with enterprises’ and service providers’ existing locations strategy and Business Continuity Planning (BCP) approaches. Nearly three-quarters of enterprises that have offshore/nearshore GBS centers operate in only one location. Even enterprises with multiple GBS centers have a high concentration of talent in their largest center. Others have developed centers of excellence with large portions of their workforce for a specific function consolidated in a few locations. Less than 10 percent of GBS centers were truly prepared for a seamless WFH model. Companies will need to re-evaluate their redundancy matrices and location/portfolio mixes to achieve a more robust BCP. Some seemingly obvious responses to locations portfolio questions may not apply anymore.

WFH is here-to-stay

A 2017-18 survey by the Bureau of Labor Statistics revealed that nearly 30 percent of the American workforce could work remotely. The extended lockdown in the near term and a high utilization, once the COVID-19 crisis has abated, will likely make WFH an integral component of the overall service delivery model. This change will have significant talent implications – motivation, employee engagement, performance metrics, reporting metrics, communication protocols, and collaboration – which organizations will need to proactively address to optimize productivity and enhance output.

COVID-19 has precipitated a fundamental shift in the way we work. There are underlying opportunities for enterprises and service providers that proactively adapt to the new normal. We believe there are four immediate steps that enterprises must take:

  • Review your enterprise global workforce strategy
  • Develop a roadmap for skills development initiatives
  • Review your locations portfolios and BCP strategy
  • Build a playbook for integrating WFH and crowdsourcing into your services delivery models

We’d love to hear your thoughts on how the COVID-19 pandemic is impacting talent strategies. Please share with us at: [email protected], [email protected], or [email protected].

Anti-financial Crime Talent Imperatives in the Digital Age | Blog

For years, financial institutions have struggled to attract and retain quality anti-financial crime (AFC) talent, which remains a compliance program’s most vital asset. And the situation is only getting worse.  Why? First, both the importance and application of anti-money laundering (AML) and fraud risk management are increasing. Second, the requirements and expectations of regulators are snowballing. And third, demand for AFC talent is skyrocketing while unemployment remains low. It’s a perfect storm.

Perhaps most importantly, the AFC workforce must now be able to work with artificial intelligence and machine learning technologies. Financial institutions that can’t adapt their workforce to the demands of this new augmented human intelligence era simply won’t survive. Knowing what talent to look for – and how to attract, manage, and retain it – is key.

The changing definition of talent and the rise of “bilinguals”

In the past, whenever new compliance initiatives or regulations arose, banks tended to staff up operational teams to address them. Now banks realize that hiring operational staff isn’t enough. Instead, solving for the underlying problem – be it “Know Your Customer” remediation, reducing incidences of fraud, or ensuring better AML compliance – is the answer.

To do this, banks are breaking up their talent pyramid into tasks. Those tasks that are manual and repetitive (and therefore subject to a high degree of automation) sit at the bottom of the talent pyramid. And those requiring a high degree of judgment that can be handled only by skilled employees sit at the top. As a result, talent must now be “bilingual,” possessing not only the domain and operational expertise to drive judgments but also the technology expertise to help automate repetitive, mundane tasks.

Attracting talent

If a bank has bilingual workers, it’s not letting them go, so finding such talent at scale through hiring practices alone is unlikely. Instead, the challenge is to identify skilled workers from either a domain or technology background and train them to develop the skills they lack.

One solution is partnering with universities. For example, recognizing that ready talent is not necessarily available in the marketplace, some service providers partner with universities to identify suitable individuals for entry-level positions and then train staff in those positions on AFC fundamentals.

Developing talent

At the same time, the half-life of professional skills is decreasing at an alarming pace. Regulations and technology are constantly changing, so talent agility is key. Organizations must create an environment of innovation, training, and enabling people to do their jobs faster and better, including enabling them with access to the right tools, be they bots or data libraries.

Firms are increasingly using techniques such as micro learning, which breaks information into bite-sized pieces, and spaced learning, which identifies the right moment for intervention so that trainees retain more information. Gamification is another technique that makes learning fun and increases retention.  Through a combination of these approaches, firms can train employees and develop talent much more efficiently.

Retaining talent

Today’s banks are losing employees not only to other banks, but also to techfin firms. Amazon, Apple, Facebook, and Google are all making forays into banking, and they’re always on the lookout for people who can help their engineering teams understand the financial payments and risk disciplines. To retain talent, it’s important to drive workers’ aspirations.

Keeping employees engaged is essential to retention. Engagement can be accomplished through creative challenges and contests that instill sustainable change and help employees use their skills beyond their day-to-day work.

When it comes to AFC talent, it’s a battlefield out there. To learn more about how financial institutions can attract, manage, and motivate AFC talent to achieve the best balance between human and technical intelligence, check out the webinar I recently conducted with Genpact on this topic.

Middle East and Africa: An Emerging Frontier for Global Services | Blog

Numerous locations in the Middle East and Africa (MEA) are emerging as upcoming destinations for global services delivery. Several multinational companies have set up their centers in the MEA region to deliver services to Europe and North America, and tech giants including Apple, Facebook, Google, Microsoft, and Uber are leveraging it for global services delivery.

What’s the appeal?

Availability and quality of talent pool

There’s been a consistent increase in the pool of entry-level talent and experienced professionals with domain-specific skills. Egypt is the leader in the region; due to various government measures to improve education quality and a significant rise in contact center operations in multiple languages, including English, French, and Arabic, the country posted an enormous 35 percent increase in the headcount for global services exports in 2018.

There’s also been a considerable rise in R&D centers and Centers of Excellence (COEs), where talented professionals with relevant and often advanced technological skill sets work to develop state-of-the-art solutions.

Less competition for talent

Because there’s a relatively large population base, limited jobs, and high unemployment rates throughout much of the region – for example, South Africa is at 27 percent and Nigeria is at 23 percent – organizations can procure talent easily and train the workers as per their specific business needs.

Cost arbitrage

Some of the countries in the MEA region offer highly attractive cost arbitrage compared to source geographies. For example, Egypt, Nigeria, and Kenya come in at 70-80 percent less (although Nigeria and Kenya are primarily leveraged to serve domestic markets), and South Africa (for non-voice F&A) and Morocco (for voice-based services) offer cost savings of 40-60 percent over source geographies.

Proximity to Europe

Proximity with various European countries is a big selling point of many African locations. For example, because Morocco offers both cultural and geographical proximity to France and Spain, companies are increasingly leveraging it for French and Spanish voice-based business process services. Because the English language was introduced by British colonists, and because there’s shared cultural affinity, South Africa is becoming a popular destination for voice-based services delivery for U.K. companies. Additionally, because most African countries share similar time zones with Europe, delivery and client teams are able to collaborate in real time, thereby, optimizing work in both the geographies.

The leading locations in the MEA region

The map below highlights key locations leveraged by global enterprises and service providers for global services delivery. While the emerging locations house 20,000 to 100,000 FTEs across global services, nascent locations employ less than 20,000 FTEs in this space.

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A snapshot view of the top five global services delivery locations in MEA

  • Egypt: Offers the most attractive cost-talent proposition, with strong multilingual skills, especially in English, French, and Arabic languages. However, relatively higher operating environment risk with concerns around high inflation rates and repressive government policies
  • Morocco: Primarily leveraged for French and Arabic language voice-based BPS and IT services. Morocco offers moderate-high competitive intensity and strong government support (especially for the IT-BPS sector through financial, tax, and customs advantages)
  • South Africa: Characterized with large, high-quality talent pools and the highest maturity across functions, South Africa houses multiple organizations delivering voice and non-voice BPS, including complex processes. It has a stable geopolitical environment, well-developed infrastructure, high ease of doing business, strong government incentives for the IT-BPS sector, and limited safety and security concerns
  • Mauritius: It is leveraged for IT (both ADM and infrastructure), non-voice business process services, and R&D services to serve French and Canadian markets. It offers a favorable business environment, with government incentives for the IT-BPS sector, such as tax-free dividends and foreign tax credits
  • Israel: Leveraged for delivery of advanced IT (including IoT, ML, and AI) and R&D services, primarily to support the U.S. and Europe. Israel offers a highly favorable business environment with lower tax rates and conducive government incentives, such as low corporate tax and grants up to 20 percent of the amount of the investment.

For a detailed view of each of these locations, please read our latest Location Spotlight reports. Each report analyzes the individual country’s global sourcing profile, key opportunities, drivers, challenges, talent and skills availability, financial attractiveness, and environment risks.

 

Talent Deficit Takeaways from NTT Data’s “Captaining the Talent” Summit in Lisbon | Blog

Developed economies around the world (with the exception of Spain’s) are facing generational low levels of unemployment. While that’s good news for workers, it’s a serious talent deficit problem for employers. How bad is it?

In 2018, the number of unemployed persons per job opening in the U.S. fell below the benchmark of one. In plain speak, that means there are more job openings out there than the number of relevant available people to fill them.

Unemployment in US

And the Beveridge curve tells essentially the same story in Europe.

Against this backdrop, I was very interested in hearing what solutions and ideas were presented at NTT DATA’s “Captaining the Talent” Summit in Lisbon last month. (Full disclosure – NTT DATA arranged my travel for the event.) The event featured a range of speakers from all walks of life – from the former captain of New Zealand’s national rugby union team to British perfumer Jo Malone to TED Speaker and eminent neuroscientist Mariano Sigman.

The common thread among all the sessions was the question on every senior executive and leader’s mind: how to navigate the choppy waters in a talent-deficit world.

Key Takeaways

  • Actively addressing FOMO is vital to talent acquisition and retention: Today’s millennial and younger employees have constant FOMO, or fear of missing out. They often question whether they’re working on the most exciting project, if their firm is solving for the toughest problems out there, and if they themselves are doing the most they can. To acquire and retain these employees, you need to go beyond workplace “gimmicks” like massages, pet-friendly offices, flex hours, and daily ice cream. Your employees need to be invested your company’s mission, and you need to make a genuine effort to make them feel empowered, not just rewarded.
  • Bridging the physical environment must be seamless: Most enterprises fixate on the consumer experience, but often forget that any digital transformation has to be valuable to their employees as well. Employees face friction in executing daily work tasks as they grapple with legacy systems. As their expectations from work and the workplace change, enterprises need to ensure they embrace consumerization of IT and help employees feel more productive and engaged through internal digitalization – from admin/expense/travel tools to more effective knowledge management, trainings, etc. At Everest Group, we firmly believe that true digital transformation has to essentially move from Customer Experience to Stakeholder Experience, enabling significant improvement for four personas – customers, employees, partners, and society.
  • Unlocking true motivation needs reimagined incentives: Traditional rewards and recognition mechanisms are limited in the impact they create, and a one-size-fits-all approach no longer cuts it. Intriguing science behind motivation and its dynamics suggest that you need to work more creatively to enable channels that allow your employees to tap into their search for meaning, e.g., creating a difference in the world they live in. And you must embrace more intelligence and empathy, enabled by technology, to provide a more personalized experience for your employees, like offering them customized learning avenues and opportunities.
  • Enabling true diversity goes beyond a checklist: More often than not, the diversity and inclusion conversation comes down to virtue signaling…a board seat here, a person of color there. But true diversity has to include diversity of thought as well. Successful organizations democratize idea incubation so that even new/young employees feel empowered to contribute and create impact through avenues such as hackathons and internal crowdsourcing initiatives.

Closing Thoughts

What we face today is a talent deficit of a unique nature. In the mature markets, there isn’t enough talent to go around, while the future of work in a global technology environment brings a significant reskilling/upskilling challenge for traditional offshore/nearshore geographies. The common underpinning theme is the irrevocable shift in the profile of people that work in this environment. Talent is changing across the life cycle – from sourcing to retention to relevance – requiring a rethink of traditional talent management practices. How we respond is going to create an irrevocable difference in the future of work.

Global Service Delivery Locations: Where to Go, Where Not to Go! | Blog

Long gone are the days of selecting offshore/nearshore service delivery locations with a regional/local interpretation of demand, a focus on cost savings, and an emphasis on service delivery in and of itself. Today, it is evolving to include a global view of demand, an increasing focus on talent quality and capacity for innovation, and the involvement of group-level strategy at its core.

So, which locations will help enterprises fulfill their requirements? Where can they place a long-term bet for a sustainable strategy that provides a competitive edge against their competitors?

Everest Group’s viewpoint, “2019 Locations Predictions: Follow the Talent,” reveals location-specific forecasts that can guide organizations on how to transform their global delivery location strategies.

Everest Group’s Predictions for Global Services Delivery Locations

Asia

As companies look for large-scale rebalancing and consolidation/right-sizing to fewer centers, the primary focus of a location strategy will be talent quality and availability. Asia has the largest talent pool with varied skillsets for IT, digital, Engineering and R&D (ER&D), and BPS service delivery.

India – India will continue to progress in the next three to five years, driven by growth in the digital and ER&D functions, as well as the increase in the availability of depth and breadth of talent. Cities such as Hyderabad and Pune will experience the highest traction due to increasing demand for complex IT and high-end R&D work from the technology and BFSI giants.

The Philippines – The Philippines will continue its dominance as one of the largest voice-BPS markets, and will also experience growth in IT services, accentuated by a faster rotation into digital such as customer analytics and social media-driven services. We expect increased traction in locations beyond Manila, such as Iloilo, Quezon, Taguig, and Davao, given their attractive cost proposition and untapped talent pools.

Malaysia – Malaysia will continue to grow, especially in the multilingual BPS, banking-BPS, and digital sectors, due to the increasing demand from Southeast Asian markets and global BFSI majors.

Europe, Middle East, and Africa (EMEA)

As companies consolidate their portfolios, and as technology and design thinking-based approaches blur the boundaries between IT and BPS, cross-functional collaboration will become critical to achieving digitalization and faster time-to-market. The EMEA region provides an ecosystem that enables companies to tap into talent that can multi-task, and is more suited for cross-functional center setups.

Poland – Poland will overtake Canada to become the third largest location in the world for BPS delivery, given its expansion of multi-functional delivery centers across various verticals and its strong government support. Cities such as Krakow, Warsaw, and Wroclaw will see traction in high-end IT services, with players setting up digital innovation hubs, including blockchain, cryptocurrencies, and AI.

Ireland – Ireland will experience the fastest growth in the region due to strong government support, well-developed infrastructure, and the increasing trend across global majors to shift their headquarters away from the United Kingdom because of Brexit uncertainties. Beyond Dublin, we also expect higher BPS growth in tier-2/3 locations such as Cork, Limerick, and Galway.

Israel – Israel will witness a significant uptick in next-generation IT services including big data, cybersecurity, cloud, and IoT, driven by a focus on research and close collaboration between academia and industry.

Americas

The rise of reshoring amidst the protectionist policies adopted by leading source geographies, including the United States, is driving companies to scrutinize and consolidate their service delivery portfolios. The Americas region is becoming a preferred choice for firms, given the ease of coordination with onshore teams, better alignment/training, and customer intimacy.

Costa Rica – Costa Rica will experience an increase in center set-up activity, although the typical scale of operations might decline due to the focus on delivering agile transformation and automation solutions to support North American operations.

Jamaica – Jamaica will see accelerated growth, especially in the BPS segment, on the back of availability of a large English-speaking talent pool and dedicated government investments to enhance the business environment.

Canada – Canada will also witness accelerated growth, particularly due to high government investments in attracting foreign investors, and especially in the IT and digital services space. Uncertainty around U.S. government policies will further drive enterprises to expand beyond existing U.S. delivery centers, especially Canada.

In today’s complex, and often volatile, environment, a tightly defined and carefully crafted location strategy is increasingly critical to enterprises’ long-term success. For more details on Everest Group’s Predictions for Global Services Delivery Locations, please see our viewpoint, “2019 Locations Predictions: Follow the Talent” or contact Parul Jain or Anish Agarwal directly.

Substantial Change as HR Becomes Data Driven and Employee-Oriented | Blog

The need to change is coming to the HR world, and it’s happening quickly. It will necessitate substantial changes in the HR mind-set, the way HR groups are organized, the supporting technology and the amount of resources invested in HR. What is driving this incredibly changing universe of HR? And what does it mean for the future of enterprise HR and for third-party HR service providers?

Rapidly changing workforce demographics, coupled with imminent talent deficits, has shifted the HR spotlight to the employee experience rather than an enterprise-facing experience. Thus, it’s now necessary for companies to take a direct-to-consumer approach (the “consumer” being an existing or potential employee).

Read more in my blog on Forbes

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