Category: Talent

Gig Worker Benefits Collective: Transforming Benefits Delivery in the Gig Economy | Blog

The rising trend of gig work, especially among Gen Z and Millennials who favor nontraditional employment, is garnering attention. However, the lack of workplace benefits for many gig workers is a significant concern. A viable proposal for this urgent need is a Gig Worker Benefits Collective. Read on to learn more.

Reach out to discuss this topic further.

With more than 70 million individuals in the US engaged part or full-time in the gig economy, the notable lack of workplace benefits and life insurance coverage for these flex workers has sparked widespread debate.

About half of Gen Z and millennials, who constitute over 50% of the workforce, gravitate toward nontraditional employment. Consequently, employers are reconsidering benefits for gig workers while navigating various legal and tax complexities.

Employees access benefits in the following ways:

  • Employer-provided benefits – Employees typically offer benefits, using them as an incentive to attract top talent
  • Purchasing individual policies – This alternative provides individuals flexibility and control over coverage
  • Government assistance – This serves as many employees’ safety net. However, the ongoing debate in the US over classifying an “employee” and “independent contractor” complicates matters for gig workers

While this issue appears daunting, finding an answer is possible. Let’s explore this further.

Proposing a solution: The Gig Worker Benefits Collective

One proposal is to create a Gig Worker Benefits Collective for these short-term workers across various employers. This centralized hub would bring together multiple employers or gig platforms under a comprehensive benefits umbrella.

Here are some benefits a Gig Worker Benefits Collective could offer:

  • Centralized administration: A central administration entity or pooled plan provider would manage benefit plans, including health insurance, retirement savings, and other relevant benefits. Technology and digital platforms would streamline administration and communication
  • Flexible benefit options: Through the collection, gig workers could choose from a wide range of benefits based on needs. Options may include health insurance, retirement plans, disability coverage, and more. Furthermore, this would give gig workers the flexibility to customize benefit packages
  • Cost sharing: Participating employers would contribute to the collective pool to cover administrative expenses, potentially reducing costs for individual employers. The collective could leverage economies of scale to negotiate better rates with insurance providers and service vendors
  • Portability and continuity: This solution would ensure gig workers could continue their benefits even when transitioning between different gigs or employers within the collective. Having seamless benefit continuity would enhance worker satisfaction and retention

The Gig Worker Benefits Collective represents a professional, tech-enabled solution designed to address gig workers’ unique needs, potentially changing the landscape of life insurance and group benefits for the gig economy.

To discuss gig worker benefits further, please contact [email protected] and [email protected].

Watch the webinar, Locations and Workforce Strategy 2024: Insights, Trends, and Key Priorities, for insights into strategic workforce decision-making for 2024.

Top Employers for Tech Talent™ ─ Understanding Brand Perception from the Perspective of Tech Employees in India, the US, and the UK | Blog

In today’s competitive talent market, presenting a compelling brand image is critical to attracting and retaining the best tech talent. This blog presents the top tech employers in three markets based on employees’ brand perceptions of more than 400 organizations as well as other key findings from Everest Group’s research.

Download the report

Brand perception matters

Attracting and retaining top tech talent has grown increasingly difficult in recent years due to the impact of new work models during the pandemic, rapid technological advancements, and fiercer competition. These disruptions have played a significant role in shaping employees’ expectations, providing candidates with a wider array of options in selecting employers and job opportunities that align with their preferences.

Having employees with niche skillsets and expertise is increasingly critical to sustaining a competitive edge. A recent Everest Group survey found that 34% of respondents struggle to find quality tech talent, emphasizing that the battle for tech talent is still far from over and underscores the need for organizations to differentiate themselves.

Employer brand perception – or how current and potential employees view the organization’s brand – is one of the most critical factors in attracting talent. For employees and candidates, perception is reality.

In today’s digital era, employees can easily research and collect information on a company’s culture, reputation, policies and practices, and values. Online platforms such as Glassdoor and Indeed, social media, and various forums allow employees to access reviews, ratings, and feedback.

Based on these insights, employees develop their perceptions of an organization – but the potential issue is that these views can differ from the image the organization wants to project. Let’s look at research that helps to better understand this dichotomy.

Introducing Everest Group Top Employers for Tech Talent Report

While most organizations regularly collect internal feedback from employees, they can be blindsided by the perception of their brand from an outside-in perspective.

Everest Group Top Employer for Tech Talent™ report is designed to draw on publicly available information and the latest feedback capturing prospective employees’ perceptions about the organization’s reputation as a tech employer.

The report analyzed 400-plus organizations across India, the US, and the UK for their employer brand perception rating as a tech employer in the respective markets.

The study examined brand perception across dimensions such as compensation and benefits, career progression, senior management, work-life balance, culture and values, and diversity and inclusion. It also evaluated the performance of the tech employers in local talent markets, spotlighting attrition rates, joiner-exit ratio, and overall employee satisfaction ratings.

Insights from the report

The analysis of the outside-in perspective revealed fascinating insights into employee expectations. Tech employers need to watch the trends in employee sentiments to maintain a positive brand perception. Here are some takeaways:

  • Employer brand perception is dynamic and fluctuates over time. Job seekers are constantly evaluating employers who must be watchful of changing brand perception
  • Employee expectations constantly change, and approaches that previously worked may not be relevant now
  • Maintaining the status as a top employer is a monumental feat that requires an ongoing process of creating and maintaining a superior employee value proposition
  • Systematic local talent market differences play a critical role in determining employer brand perception. Employees in India, for example, assign varying degrees of importance to different components of employee value proposition compared to counterparts in the US and the UK
  • Perceived brand perception strongly influences and correlates with success in the talent markets for tech employers

Learnings from Top Employers: Shell and SAP

To better understand what makes the leading employers stand out, Everest Group hosted a webinar featuring two companies viewed as top employers for tech talent across all three analyzed geographies.

Jimit Arora, Partner at Everest Group, and Mihir Bade, Senior Analyst at Everest Group, discuss with Brandi Khouri, Vice President of Human Resources at Shell, and Shweta Mohanty, Head of Human Resources at SAP, the secret sauce behind their successes.

During the webinar, Shell highlights that the challenge to develop energy solutions of today and tomorrow, collaboration with experienced and high-caliber colleagues, the opportunity to create a direct impact, and a value-led environment are the keys to their success as an employer of choice.

For leading technology organization, SAP, connecting employees with its purpose and culture creates the difference. The core element of co-creation is well reflected in SAP’s employee value proposition of “we build breakthroughs together.”

To learn the details of these successes, view the webinar, 2023 Top Employers for Tech Talent: Create a Powerful Employer Value Proposition.

Enterprise and CIO leaders are invited to request a complimentary copy of the Top Employers for Tech Talent™ report providing an overview of their organization’s outside-in perception and a benchmark comparison with industry peers.

Download the report

Introducing Talent Genius™: The AI-powered Insights Platform for Workforce and Location Strategies | Blog

Making the best location and workforce decisions to optimize for risk, cost, and talent pipeline sustainability is critical in the constantly changing global services market. Having uniquely targeted, up-to-date data and insights to develop strategies and future plans are now key to success. Read on to learn about Talent Genius™, Everest Group’s new interactive, on-demand platform delivering the insights and intelligence IT and BPS organizations need today.   

Uncovering the right talent and locations amid economic uncertainty, shifts in geopolitical climates and monetary policies, inflation, attrition, and skill shortages is one of the biggest challenge Information Technology (IT) and Business Process Services (BPS) industries must overcome today.

The wrong workforce and location strategies in an unstable market could lead to suboptimal costs and waste, a lack of long-term growth and sustainability, continued challenges in acquiring and retaining talent, the inability to deliver on organization or client commitments, and overall increased risk. It is critical organizations have market visibility to build the right strategies, but they lack the data they need to make confident location and talent decisions.

That’s where Everest Group’s recently launched Talent Genius™ comes in.

This dynamic, Artificial Intelligence (AI)-powered insights platform has been purpose-built to guide IT and BPS location and workforce decisions with the most comprehensive, reliable, and current location and talent data. With Talent Genius, global IT and BPS firms can build, monitor, and optimize their location portfolio and talent hubs by staying on top of talent market trends.

With Talent Genius, business leaders can find the guidance needed to understand the latest market trends and get a step up when planning for the coming years. The interactive, on-demand platform identifies and analyzes key trends in the global labor market so leaders can quickly develop data-driven location and workforce management strategies.

Let’s take a closer look at this new solution.

How does Talent Genius work?

Everest Group is committed to creating sustained value for the IT and BPS sectors by applying practical research to specific workforce problems. Talent Genius combines Everest Group’s years of extensive location and talent insights with ongoing market research. It offers a range of data-driven insights and analytics to help global organizations understand the rapidly changing talent market and make well-informed talent and locations decisions.

Through intuitive dashboards, IT and BPS firms get a clear view into locations around the world for country and city assessments, demand hotspots and trend monitoring, salary benchmarking, language skills scalability, peer demand and hiring trends, and peer employer brand perception.

Talent Genius offers organizations the capability to be competitive, future-ready, and confident as they build their talent and location strategies with the ability to:

  • Evaluate 100-plus cities and more than 30 countries for economic, geopolitical, and competitive risk, wage inflation, attrition, and IT and BPS talent supply and demand
  • Assess talent demand as markets change by function, roles, skills, and city or country, and select from 25-plus languages to quickly identify the right markets for specific needs
  • Optimize for cost as budgets fluctuate while attracting and retaining talent by offering competitive salaries and choosing the right locations to grow
  • Detect competitive hiring opportunities and threats to determine where competitors are hiring and the functions and roles they’re hiring for
  • Understand how competitor employees perceive important factors such as compensation, benefits, and career growth and get an inside look into how employees perceive your organization compared to competitors

Using this tool, location and talent strategy leaders can easily determine where they should expand to optimize costs while improving access to talent. They also can assess if they are in the right countries and cities to maintain a robust, risk-managed portfolio.

Why you’ll get the right data and outcome with Talent Genius

As the leading research firm in the global service space, Everest Group has decades of experience partnering with global IT and BPS organizations to provide location and talent insights to enable confident decisions.

With Talent Genius, IT and BPS companies can prepare for the future with clarity and confidence. Powered by deep research and a client-first approach, Talent Genius is more than just a software platform. IT and BPS organizations can also directly engage with Everest Group analysts for further insights and support. The unique combination of on-demand data and expert insights ensures organizations have the right level of support to make the best decisions, while still providing the analyst support and guidance Everest Group is known for.

Talent Genius will become IT and BPS organizations’ competitive advantage to create a more agile, data-driven location portfolio. From workforce management strategies to global talent sourcing, Talent Genius offers the data and insights needed to make informed decisions.

“The global services market runs on the power of talent. It’s critical that organizations make the right decisions when it comes to creating and optimizing their workforce and location strategies. That is why we are excited to expand our services portfolio with this new cutting-edge location and talent intelligence tool. With Talent Genius, at the click of a button, our clients will have the highly-contextualized, expert-vetted information they need to confidentially make those decisions. With our commitment to innovation and excellence, we are certain that this new offering will provide unparalleled value to our clients. – Everest Group Vice President Sakshi Garg.

Learn more about Talent Genius or contact us to book a demo.

Alert on Engineering and IT Hiring Dilemmas for 2023 | Blog

The most dangerous words regarding investing are, “This time, it will be different.” The same words often occur when planning for a recession. But, quite possibly, this time, it will be different. Why do we at Everest Group believe it may be different for the looming recession we now face? Because there is a confluence of trends that are different from past recessions.

Read more in my blog on Forbes

The Top GBS Employers™ in India, The Philippines, and Poland – Discover Why They Are the Top Global Business Services Companies for Talent | Blog

Everest Group’s Top GBS Employers™ across India, Poland, and the Philippines report illustrates the top global business services companies selected for best work environment and job satisfaction rating by employees. Read on to discover what the workforce looks for when choosing an employer and view the complete list.

 See the Report

As the battle to find the right talent and skillsets resumes, GBS employers must build an exemplary brand to stand out among their peers to attract and retain top talent. The talent shortage worldwide is here for the foreseeable future and is a constraint against growth goals. Developing and implementing a talent strategy should be at the top of any employer’s priority list. One tactic that many are turning to is closely tracking and honing their brand, or how talent perceives them in their local market.

Developing a solid brand perception will not only address the talent shortage challenge but also help draw in a strong and resilient workforce, so organizations will survive uncertainty and thrive in intensely competitive environments. The top global business services companies are incorporating the key components and top requirements that talent are gravitating towards – work environment, compensation, career development, and diversity – and are critical in building employer brand perceptions and meeting evolving workforce expectations.

The top global business services companies selected across India, The Philippines, and Poland

Everest Group analyzed the employer brand perceptions of 200+ leading GBS organizations across India, Poland, and the Philippines to discover what a top employer brand perception encompasses, view the full report. The study examined multiple dimensions, including compensation, career progression, senior management, work-life balance, culture and values, and diversity.

This first-of-its-kind study also analyzes the performance of each of the top global business services companies in the local talent markets based on attrition rates, joiner-exit ratio, and overall employee satisfaction ratings.

Finally, we assessed what top global business services companies are doing to differentiate themselves in talent markets, targeting the most desired themes from talent: work environment, compensation, career development, and diversity.

Why GBS organizations need this information today

Workforce expectations have transformed dramatically over the past few years, and organizations have to evolve their employer brands to meet those expectations. The pandemic brought about the work-from-home (WFH) era, dispelling many negative notions around WFH, and set a standard of work-life balance, flexibility, and autonomy that employers must deliver. Our research shows that over half of today’s organizations expect over 40% of their employees to continue working from home or in a hybrid style over the next two years or so.

More and more employees today are also choosing to work for companies that not only have sustainability goals and strong culture and values but adhere to diversity, equity, inclusion, and belonging (DEIB) practices, which ensures employees have equal opportunities and ultimately feel more valued.

And at the top of the list, employees want to work for organizations that offer career paths, opportunities for upskilling, and fair compensation.

The Top GBS Employers™ rankings provide an outside-in proxy on how prospective candidates pursuing tech and ops careers perceive employer companies – helping firms baseline their employee value propositions (EVP) effectiveness vs. their immediate peers.

How are the top global business services companies being ranked?

Recent employer perception studies have been too broad, with no specific view capturing tech talent’s concerns. This analysis is based on publicly available information, including Glassdoor, Indeed, and LinkedIn, and the latest feedback capturing prospective employees’ perceptions about top GBS organizations. The rankings from the report provide a comparative snapshot of leading firms’ market perceptions among the tech and ops workforce. We ranked each GBS employer on employee satisfaction grade, compensation and benefits, work environment, career opportunities, and diversity and inclusion focus and investment.

The top ten across India, the Philippines, and Poland

By assessing the ratings and feedback from popular public sites and critical sources for employees conducting employer research, we narrowed down the top ten in India, the Philippines, and Poland:

  • Across India, the overall top GBS employers are Google, Mondelez, Microsoft, Bank of America, SAP, JPMC, P&G, Target, American Express, and Novartis
  • In the Philippines, the overall top GBS employers are Henkel, SAP, JPMC, Telstra, P&G, SunLife, Wells Fargo, American Express, Chevron, and 3M
  • And in Poland, we saw Mondelez, Microsoft, SAP, Standard Chartered, Google, Cisco, Bayer, AstraZeneca, ING Group, and P&G come through as the top GBS employers

See the full report for a complete view into the rankings in the different regions.

Key takeaways from the research

Throughout every market assessed, it’s clear that compensation, work environment, and career development are among the top sought-after aspects when choosing a new employer and have the most impact on employer brand perception.

Employers with the highest rankings offer relatively high entry-level compensations and robust training, set benchmarks to allow for pay increases, perform salary corrections, and have opportunities for fast-track promotions, especially at lower experience levels. High-ranking companies also offer flexibility and options for remote work and the chance to work across teams for cross-functional exposure. Other perks among the highest ranked employers are opportunities to work on the latest tech stacks and develop techno-functional and behavioral skills, along with good 401K matching and health insurance options, market-competitive benefits, and decent paid time off.

Employers that incorporate these practices will significantly increase their overall employer brand perception and discover more success in finding and retaining talent.

Top global business services companies can also leverage Everest Group’s Talent Performance Framework to optimize their talent management strategies and build future-proof talent models.

Exhibit one: Everest Group’s Talent Performance Framework

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To learn more about Everest Group’s Top GBS Employers or to discuss the Talent Performance Framework, reach out to [email protected] or Contact us.

Also, join us for our Conversations with Leaders LinkedIn Live series, a part of Everest Group’s GBS Leadership Exchange, Episode 3 | Who Are the Top GBS Employers?, featuring GBS executives who have shown significant leadership and innovation in GBS. In this session, Rohitashwa Aggarwal, VP of GBS Research and Advisory at Everest Group, and Shweta Mohanty, VP and Head of HR for SAP, India, will discuss the Top GBS Employers, and what they are doing to set themselves apart.

Tackling Technology Talent Management to Ensure Continued Enterprise Satisfaction | Blog

Post-pandemic, enterprises have given IT service and technology providers high marks for improving commercial models and customer-centricity, but talent management is emerging as a major concern. Customers want their providers to ensure resource availability, improve employee quality, and manage attrition – all during the Great Resignation and current labor shortage. Discover a framework for effective talent management in this blog.

Emerging from the pandemic, IT service and technology providers’ enterprise satisfaction ratings increased for the second consecutive year, moving up from 70% to 75% last year, according to our IT Services Enterprise Pulse Report 2022.

After enduring the turmoil and uncertainty of the pandemic, enterprises surveyed said they valued IT service and technology providers’ efforts to adapt to sudden enterprise demand shifts, take a more customer-centric approach, and offer flexible and transparent commercial relationships.

However, talent management – or attracting, selecting, and retaining employees – has emerged as a key pain point for enterprises, along with the lack of value-add and innovation from providers.

Providers need to resolve their technology talent management issues to ensure continued growth in enterprise satisfaction levels going forward and prevent workforce issues from negatively impacting their customers’ project timelines, costs, and quality.

What do enterprises want from their IT service and technology providers?

Most importantly, talent management and attrition have become key focus areas for enterprises, and they want their IT service and technology partners to ensure talent availability, invest in learning and development, and manage attrition. Enterprises surveyed said they expect their partners to ensure that the right talent with the right skills is available to them at the right time and place.

They also desire:

  • Partnerships – Enterprises are looking for IT service and technology providers to transcend from being services and technologies providers to strategic partners they can have balanced and forward-looking relationships with
  • Innovation and collaboration – They want partners to collaborate with them more often and bring new and innovative ideas to the table. Customers are looking for openness from providers about what they can and cannot do so they can jointly decide the best way forward
  • Transparency – Customers seek transparency and flexibility in project management, delivery, and commercials. They expect their IT service and technology providers to showcase high levels of customer-centricity and be responsive and proactive
  • Technology skills – As enterprises around the world pump up their technology modernization efforts, they want providers to combine their technical and domain expertise in delivering services powered by new-age digital themes like cloud modernization, automation, Artificial Intelligence (AI)/Machine Learning (ML), etc. contextualized to enterprises’ business landscape and challenges

Enterprise satisfaction state

These might sound like big desires, but providers have been doing a good job delivering on most of them. Let’s take a look at the current state of enterprise satisfaction.

IT service and technology providers have fared well in helping enterprises navigate through the post-pandemic world and meet their business objectives like cost reduction. Enterprises are satisfied with client management, commercials, and technical expertise and are increasingly viewing providers as strategic partners.

Here’s how the scores have improved:

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Technology talent management – a key enterprise concern

Despite the many positives, IT service and technology providers are struggling to manage attrition and ensure talent availability and quality, making their partners unhappy. While enterprises recognize that IT service and technology providers are trying to improve their talent management, a lot more needs to be done.

Even before the pandemic and Great Resignation, enterprises were worried about their IT service and technology providers’ talent management initiatives, and the recent turn of events has made this lack of focus more glaring and detrimental to enterprises’ business objectives.

In our survey, companies said they expect their partners to ensure that the right talent with the right skills is available to them at the right time and place – and that’s no small feat.

While the talent management issue is impacting enterprises across industries and geographies, it is more prominent in Banking, Financial Services, and Insurance (BFSI), and manufacturing as resource availability and retention are major problems.

Enterprises in the Middle East and Latin America have been the most vocal about their dissatisfaction with providers over technology talent management. In a separate Everest Group study, Technology Skills and Talent: Reimagining Talent Acquisition and Management with Technology Platforms, we found that the project readiness quotient of the talent pool in skills such as Artificial Intelligence (AI), SAP HANA, Oracle Cloud, and security is considerably low with a significant spike in demand for critical roles in data and AI, security, and cloud.

Enterprises want their partners to ensure talent availability, invest in learning and development to improve quality, and manage attrition by ensuring employee retention and faster replacement of exiting talent, as shown below:

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How to move forward   

As IT service and technology providers struggle with managing attrition, ensuring resource availability, and improving the overall quality of talent, enterprises suffer because it affects project timelines, cost, and quality.

IT service and technology providers need to adopt a continuous workforce planning model keeping in mind the factors that impact talent demand and supply. They also must take a holistic approach to manage attrition by being employee-centric and investing in learning and development to improve employees’ effectiveness.

Talent management framework

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With the framework illustrated above, IT service and technology providers can solve the talent availability, attrition, and reskilling conundrum and ensure the high levels of enterprise satisfaction seen post-pandemic last going forward.

To explore more on your talent management strategy, read our IT Services Enterprise Pulse Report 2022, or reach out to us at [email protected], [email protected], and [email protected].

You can also discover key strategies best-in-class companies are deploying to position themselves for success in our webinar, Planning for a Recession: Is the War for Tech Talent Finally Over?

Solving the Need to Cut Costs in IT and Engineering Services in a Recession

Every large firm in North America, Europe, and the industrialized world is going through a fundamental transformation to emulate how tech companies operate. We’re early in this transition, but this new way of operating and competing is so fundamental that it will continue even during a recession. The demand for IT and engineering services won’t slow and will far exceed other industry sectors, even in a recession. Although this is comforting for companies selling tech products and services, it poses a number of dilemmas for other companies.

Read more in my blog on Forbes

US Staffing Industry: A Sea of Opportunities Among the Thunderstorms | Blog

With the continued talent shortage creating demand for contingent workers, staffing firms are experiencing new opportunities to expand and diversify their services. Many are joining forces to seize growth, as seen by a flurry of mergers and acquisitions in this dynamic space. To learn more about the challenges, opportunities, and outlook for the US staffing industry, read on.    

The US staffing industry and contingent workforce have become integral to the economy. Driven by the unique employee recruitment environment over the past year with the Great Resignation and dramatic labor pyramid shifts, staffing firms are being presented with new growth opportunities as they help fill the talent gap.

On the back of strong economic growth in 2021, the staffing industry grew significantly. However, this momentum is expected to drop off due to a myriad of internal systemic challenges and increased competition from traditional and non-traditional players.

Despite the anticipated slowdown, the market is still expected to remain above pre-pandemic levels as enterprises increasingly turn to the contingent workforce in the next 12 to 18 months, according to Everest Group’s Future of Work 2021 survey.

Additionally, the fear of a looming economic downturn and associated layoffs will further add to contingent talent demand because enterprises will not want to invest in full-time hiring with the uncertainty.

Given such rapid fluctuations in the market, staffing firms must navigate various challenges to sustain their growth trajectory, including:

    1. Rise of alternate sourcing channels: As contingent talent gains hold, enterprises are increasing investments in advanced contingent workforce management solutions and alternate sourcing channels. The current lack of sophistication in leveraging contingent workers will likely prevent any single alternate channel from threatening the staffing industry’s business. However, enterprises are looking at the entire gamut of hiring approaches such as direct sourcing and gig platforms to broaden their search scope and meet talent requirements. This increased competition in the staffing space, coupled with higher penetration of Managed Service Providers (MSPs), who aim to reduce supplier costs and draw their fees from supplier margins, will impact traditional suppliers’ or staffing firms’ net fee incomes
    2. Lack of differentiation and commoditization: The staffing industry globally and especially in the US, has two unique characteristics.
        • Staffing firms do not enjoy an exclusive relationship with associates. Associates/candidates typically have relationships with multiple staffing firms and have next to no switching costs.
        • Clients release a requisition to several staffing firms simultaneously. Price and speed of execution play a significant role in winning business.

      The combination of the above factors results in commoditization and difficulties in creating and sustaining differentiation in a highly fragmented industry with low entry barriers

    3. Cyclical and uncertain business: The staffing business is cyclical, and growth is linked to broader economic growth. While some market segments/roles may be resilient to changes in the business environment, the overall industry is vulnerable to business cycles. Leading economic indicators suggest the possibility of a recession in the future, which would impact the staffing industry’s growth

 

While current market conditions present a significant number of challenges and disruptions for staffing firms, many of these obstacles can be pre-empted if staffing firms begin to differentiate themselves.

While staff augmentation is largely commoditized, going up the value chain is one of the main ways through which staffing firms can differentiate themselves. Staffing firms can also invest in areas such as associate upskilling/reskilling, technology integration with services, and Diversity, Equity, and Inclusion (DE&I) to stand out. Based on their historic growth and penetration levels, staffing firms may explore opportunities to diversify across the following areas

  • Geography: Expansion across new domestic and international geographies
  • Industry: Expansion across new sectors and clientele
  • Skill categories: Expansion across new and adjacent skill categories
  • Solutions: Building capabilities to offer high-value solutions beyond staff augmentation, such as managed services

The staffing industry has been very dynamic in recent years, with service providers expanding their capabilities and diversifying their portfolios, both organically and inorganically. Service providers have been quick to capitalize on the opportunity offered by the pandemic and moved quickly to expand their capabilities and portfolios via mergers and acquisitions. Some of the most interesting and significant developments include:

    1. ManpowerGroup, a workforce solutions firm, acquired Ettain group, a staffing firm focusing on IT, healthcare, and digital creative managed services, to bolster its global IT staffing and managed services brand, Experis. The deal is expected to improve ManpowerGroup’s strength in delivering IT staffing services to financial services and healthcare clients
    2. Adecco Group, a staffing and talent advisory firm, acquired AKKA, an engineering and R&D staffing firm, to bolster its high-tech services brand, Modis. AKKA and Modis will jointly form Akkodis to strengthen its capabilities as a digital solutions provider in the smart-industry market
    3. Motion Recruitment Partners, an IT talent solutions firm, acquired MATRIX Resources, an IT staffing and managed services firm, to bolster its specialized IT staffing business. This acquisition will enable MRP to expand into six new sales markets. It also acquired The Goal, an IT staffing provider, to strengthen its presence with federal government clients
    4. Kelly Services, an IT, science, and engineering staffing firm, acquired Softworld, a specialty IT staffing firm, to add new high-tech skill categories as well as to deepen its presence in industries such as financial services, healthcare and life sciences, aerospace, defense, and retail
    5. Swoon, a US-based staffing firm, acquired Grapevine Talent Acquisition, an executive search firm, to expand into niche industries such as sensors and controls, pharmaceutical, petrochemical, biotechnology, satellite agriculture, linear components, and process instrumentation
    6. Digital Intelligence Systems (DISYS), a global staffing and managed services firm, acquired Signature Consultants, an IT staffing, managed services, and consulting firm, to deepen its IT staffing capabilities and expand into new North American clients.

 

Thus, the staffing space continues to provide opportunities for staffing firms to diversify their portfolios into new geographies, skill categories, and managed services solutions through M&A activity. As the economic environment is frequenting between crest and trough, the staffing industry will continue to remain dynamic. Additionally, fears of looming recessions and funding freezes across industries will offer a unique opportunity for well-capitalized staffing providers to pursue M&A targets at attractive valuations.

To discuss the US staffing industry and contingent talent, contact [email protected], [email protected], and [email protected].

Learn more about workforce changes, read the blog, Deconstructing the Future of Work Trends.

Mortgage Industry Trends Driving Layoffs and Five Tactics to Avoid Job Cuts

While nearly all industries are dealing with a talent dearth, the mortgage industry is faced with unprecedented layoffs. Rising interest rates, high housing prices, and a shortage of listings have cooled mortgage and refinance activity from the pandemic boom, leading mortgage lenders to cut thousands of positions in recent months that are no longer needed. Learn five tactics companies can take to remedy the layoff crisis in this blog.

Let’s take a look at the market factors that have contributed to the current situation.

The overall mortgage industry was ignited during the pandemic by two years of low-interest rates that somewhat bolstered originations. But the increase in interest rates early this year has since curtailed the short-lived volume increases, reducing the demand for both new originations and refinancing.

Dwindling demand has been exacerbated by the limited housing supply, skyrocketing house prices, declining home values, increase in frauds, a detreating secondary market, and uneven and untimely mortgage payments.

To better understand where the market is headed, we looked at the Annual Mortgage Origination estimate from 1990 to 2019 before the pandemic. The estimates in the chart below show that even if total new originations have increased every year, new originations and refinancing growth has been somewhat cyclical. The exception is the steep decline from 2005 to 2008, when the US mortgage industry experienced a financial crisis.

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Looking at the 30-year mortgage fixed rate, interest rates have been steadily declining over the past few years – until the sharp increase in early 2022, where rates were first hiked in December 2021 to 3.11% and steadily rose to 5.30% by the end of May 2022.  With US inflation at an all-time high of 8.26% in April 2022, the consequential rise in mortgage rates contributed to the purchasing power crunch and reduced demand for new originations.

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Mortgage industry trends contributing to increased layoffs

Faced with the combined problem of rising inflation and the corresponding mortgage rate increases by the Federal Reserve, mortgage companies have resorted to slashing an overabundance of positions that were added during the pandemic uptick.

This is not the first time the mortgage industry has faced mass layoffs. Recent estimates show that since January 2022, more than 10,000 employees in the industry have been displaced from their roles across enterprises and providers.

Mortgage industry experts, enterprises, service providers, and analysts cite the following factors for the recent job eliminations:

  • Cyclicity: The mortgage industry appears to go through two- to four-year cycles, as shown in the above graph. After the low-interest rates through 2020 and 2021 that propelled activity, the industry is now facing the brunt of less activity in early 2022
  • Limited housing supply: Given the limited availability of in-demand housing and the steady increase in new originations, house prices have shot up. This, in turn, is pushing home buyers out of the market
  • Uneven hiring: Companies increased their workforce strength exponentially during the pandemic to keep up with the home-buying surge. The Bureau of Labor Statistics reported that the US home lending industry witnessed a rise of more than 50% in total employment – from 130,000 workers in July 2019 to more than 425,200 in February 2022. Now, as the market is slowing and mortgage rates are rising, the industry is forced to let go of its surplus workforce
  • Macroeconomic factors: The impact of COVID, the Russia-Ukraine war, rising oil prices, and inflationary pressures have had an impact on overall consumer purchasing power, further impacting the mortgage industry
  • Services shift: Even though the volume is low, buyers are shifting their expectations and demand from originations to specialized services such as quality assurance (QA), quality control (QC), title insurance, securitization, and others. Enterprises solely relying on origination as their core services are faced with lower volumes, leading to increasing layoffs of employees working in areas with reduced demand. Providers need to acknowledge this shift in mortgage operations and plan their labor force accordingly. Watch this space for our future report focused on the emerging needs for specialized services in mortgage operations

Five remedies for layoffs in the mortgage industry

Despite the various factors that ignited the mass layoffs, companies can approach market fluctuations with the following remedies:

  1. Outsourcing: Instead of embarking on a hiring spree and allocating huge volumes of resources for specialized staff, mortgage companies should opt to outsource processes to established mortgage service providers. This can reduce fixed costs while using existing resources to the fullest and saving money by only paying for services they use. Through outsourcing, enterprises are shifting the onus to the service providers. Since providers bring experience in managing and redeploying employee pools across multiple industries and processes, they can often distribute and redeploy employees instead of outright firing them
  2. Develop adaptable and interchangeable skills: Service providers and enterprises need to align their labor force to industry needs, such as planning for the anticipated shift from originations to upcoming services like securitization and servicing. By developing adaptable and flexible skills, employees can find jobs in other industries and services if their positions are eliminated
  3. Upskill and reskill talent: Enterprises and service providers are providing the labor force with executive courses and mortgage-specific training to keep them on track with industry needs and requirements. Employees should complete internal training programs and seek external training to keep their skills updated so they are relevant to the company’s requirements
  4. Alternate hiring strategies: Instead of hiring based on the market ebbs and flows, companies should follow a lean approach and hire judiciously. Companies should implement hiring freezes for non-essential positions when there is a hint of a demand slowdown. They can also hire contractual employees when they anticipate a boom and make temporary positions permanent when the market stabilizes
  5. Digital transformation: To accelerate productivity and growth, it has become imperative for employers to leverage digital transformation. Digital tools can be used to automate mundane voluminous tasks, freeing employees to handle more analytical and important tasks, thus reducing the chances of hiring and allocating huge volumes of resources for mundane tasks

Mortgage industry outlook

While the layoffs and financial crisis have led to a negative sentiment of the mortgage industry among buyers and investors, service providers who are developing digital strategies and enhancing the customer experience can help change this perception. To learn more, see Everest Group’s recent report on leading service providers in the mortgage industry.

To discuss mortgage industry trends, contact Shrey Jain at [email protected].

Explore more of our latest insights in our blogs and webinars.

Deconstructing the Future of Work Trends

Four-day weeks, on-demand pay, “rural” talent, and digital workers in recent times, we’ve heard these ideas accompanied by seemingly teleological questions about work as a construct. With the work landscape rapidly evolving, questions arise about what the future of work will look like. Read on to learn more about how technology, location, and talent can be utilized to reconstruct our understanding of work, as well as gain positive lasting effects for companies.

With the rise of digital labor pyramid issues, the after-effects of a global pandemic, and the desire for more meaning in work and convenience through remote work, the work landscape is being met with a promising possibility of re-examining and perhaps reconstructing work for the new era. But, beyond the clarion call, what exactly does it entail? How do we understand the future of work trends and how do we design for them? Fundamentally, we can break it down into three distinct components: the how, the where, and the who. Let’s take a look at the trends shaping the future of work.

Nature of work – how will work be done?

As we look at the adoption of cloud and AI technologies in the workplace, it becomes clear that the nature of work will change considerably. Robotic process automation (RPA) and Artificial Intelligence (AI)-based automation can significantly reduce the number of transactional tasks delivered manually, in addition to a few judgement-oriented tasks. The universe of tasks that can be automated or simplified will expand as these technologies mature and systems of record become more scalable, data pipelines are streamlined, and meaningful data itself becomes more accessible. This further enhances our ability to use data to derive insights and make informed decisions.

Everest Group’s future of work research shows adoption of these technologies has accelerated during the pandemic. More than 70% of organizations have invested in digital in the past 12 months, and about 50% expect to invest more in the next six to 12 months. Naturally, all of this has implications for the kind of work that then falls to the human workforce. With transactional tasks largely automated, judgement-, expertise-, and empathy-oriented tasks and related skill sets (including “soft skills”) become more important. But this is not a doom and gloom job-loss scenario; digital hardly ever is. Digital will also create jobs for talent who can acquire skills related to automation, AI, analytics, and the cloud.

In essence, the nature of work is changing. Enterprises will need to prepare for these eventualities by ensuring they have adequate skilling programs in place, starting by building skill taxonomies for the future, assessing current skill sets, and building out continuous learning, upskilling, and reskilling programs to enable a future-ready workforce.

Work location – where will work be done?

Our research indicates that over half of today’s enterprises expect more than 40% of their employees to continue to work from home over the next two years or so. The pandemic has dispelled certain notions about remote work while highlighting its challenges. No longer do we question if remote work is efficient or even a possibility; video calling and conferencing tools, collaboration technologies, and the potential of the metaverse have meaningfully reduced the friction that deterred work from home. Employees have benefitted from shorter commute times, greater flexibility, and proximity to family.

On the other hand, 55% of enterprises see employee engagement as a key challenge in a remote-only environment, and 50% see organizational culture as difficult to maintain with full-time work from home. The middle ground (hybrid work) seems destined to be lasting among the future of work trends. Enterprises need to redesign physical and virtual workspaces, embedding information security as needed and changing management styles to accommodate the hybrid working model.

As remote working has gained more acceptance and mature economies have aged, the time has also come to de-link talent from geographic locations. Beyond the US and India, emerging technologies such as AI and automation have sizeable talent pools in multiple countries across the world. The enterprise of the future should seek to leverage this talent, applying similar guiding principles as those for hybrid work with an additional focus on local compliance, managing cross-cultural teams, and customizing policies.

Talent model – who will do the work?

As work and workplaces evolve, so will the talent we need. We already spoke to the need for a geographically distributed and suitably skilled talent. The future workforce will also be diverse, equitable, and inclusive. Diversity will, in some ways, be necessitated by the need for a variety of in-demand skills sets and changing labor pyramids, but beyond that, it is a fairly well-established fact that diverse workforces simply do better and bring a variety of perspectives to the table, enabling enterprises to serve their clients better too. From this perspective, in the digital age, organizations will need to bolster their diversity, equity, and inclusion programs, define concrete goals and metrics, and mobilize internal and external resources to help meet these goals. DE&I will be among the trends shaping the future of work to watch for.

As we look to fulfill specific skillsets for future work, organizations will also do well to consider contingent or temporary workers in addition to traditional permanent ones. Contingent workers are in greater supply now and will offer a good pool of talent to tap into, particularly for in-demand and next-generation skills. This will require careful consideration on the part of enterprises, as not all roles will be suitable for fulfillment. Even among the contingent workers, some skillsets will be in higher demand.

Attracting talent also will pose a challenge for enterprises. Today, a large portion of contingent programs are run through procurement. A holistic program run by HR (including contingent and permanent workers) that can communicate the employer value proposition well, help with engagement, and leverage data to improve program management might just be needed as we transition to this new construct.

The future of work is neither esoteric nor mundane – it is somewhere in between, and it is here already. It will require us to question well-established paradigms, rethink the framing of work in our lives, and push us to redesign and reconstruct. Enterprises that move the needle now stand to gain a lasting competitive advantage.

To learn more about the future of work trends, contact us or reach out to Everest Group Partner, [email protected].

At Everest Group, we help clients navigate their digital transformation journeys and provide assistance in implementing digital technologies. Currently, we are offering assistance to companies that are launching Web 3.0 and Metaverse initiatives with a complimentary outline of definitions and use cases. Request a summary.

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