Category

Talent

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

By | Benchmarking, Blog, Outsourcing, Talent

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.

 

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

By | Blog, Talent

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.

Why is Leadership Changing in India’s Service Provider Firms? | Blog

By | Blog, Talent

Leading service providers in India are going through substantial change due to executive leadership churn. The question is: is this bad? To answer, let’s look at what’s driving the churn and how long it’s likely to continue, and why.

Take Cognizant, for example. The firm has gone through leadership change for some time. First, it changed the chairman of the board and a few board members. Then it changed the CEO. With the recent resignations of Debashis Chaterjee, EVP and President, Global Delivery, and Prasad Chintamaneni, EVP and President, Global Industries and Consulting, we’re now seeing turnover in the next level down in executive leadership. And I believe we can expect more turnover.

Similar churn has been happening at other services companies given the fact that each of the top five India heritage companies announced a new CEO in the past three years.

What’s Driving the Executive Churn?

Underpinning the leadership turnover is the providers’ move to a new business model. They shifted away from struggling with the issues of the labor arbitrage model and moved to the digital platform model. As companies move down this path, I think it’s natural for their leadership to evolve.

Evolving the executive leadership is natural because the old guard must give way to the new guard – firms must bring in fresh thinking. The prejudices, paradigm and old rules of thumb don’t work in the new digital model (or, at least, only a few of them work). To succeed in this transition, the firms must change their thinking. One way to do that is changing the leadership.

The offshore services majors have extraordinarily deep talent benches. To keep their deep talent pools, they need to provide opportunities for them to progress and move on to more senior roles. When the senior teams move on, it opens opportunities for this talent. And it’s an opportunity to being in some new blood from the outside. That talent combination can be quite healthy, particularly at a time where companies are no longer scaling the known, existing model. Instead, they are moving into uncharted waters with a new business model that is evolving and being defined.

Another manifestation of the executive leadership churn is taking place at TCS, which is handling the digital shift differently. The firm reorganized to give its deep talent pool opportunities and new responsibilities. Instead of executives leaving TCS, we see a substantial reorganization that opens opportunities for the young blood, new talent, to take on more executive responsibilities. TCS handled this in a different mechanism to achieve the same goals as Cognizant – bringing new blood through. TCS retained its old blood by giving them different responsibilities and by shaking things up and moving people around.

This is what’s happening, and it affects pretty much all the service industry’s firms.

How Long Will the Leadership Churn Continue?

The executive leadership churn is predicated upon the fundamental industry shift into a new business model, which naturally causes this turnover. The turnover is healthy and inevitable, given the degree of organizational change going on.

I think it’s prudent to watch for too much of a good thing. However, the turnover is inevitable. I believe we’ll see more change as companies navigate and embrace the new digital future and move deliberately into that future.

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

By | Blog, Shared Services/Global In-house Centers, Talent

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

By | Blog, Talent

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

Persistent Team Vs Contract Labor Crucial In Solving Business And IT Misconnects | Blog

By | Blog, Digital Transformation, Talent

A major frustration between business units and their enterprise IT organizations is the issue of employee churn. The same issue affects relationships between enterprise IT and third-party service providers. Let’s look at how a company’s talent model affects whether the results of the IT work are consistent with the needs and desires of the business.

Read more in my blog on Forbes

On-demand Payroll: A Holy Grail for Employees and Employers?

By | Blog, Talent

When you think of payroll, the last thing that probably comes to mind is “flexibility.” For longer than anyone reading this blog can remember, payday has come on the same day(s) of the month for most employees. This puts a significant portion of the global workforce in a bind; they live paycheck to paycheck, and find it difficult to make ends meet, pay down debt, and save money.

However, in today’s world of increasingly instant gratification, those days could be ending.

Enter “On-demand Payroll,” an emerging area within payroll that gives employees the freedom to decide how and when they want to get paid, and provides them some level of safety should an unexpected expense pop up that wasn’t on their radar.

Benefits for Workers

Benefits of On-demand Payroll

Increase in flexibility: One of the key benefits is that it enables employees to choose their pay schedules and stay on top of their finances or react to sudden expenses.

“Payrolling” the gig-economy: With the world moving towards the gig-economy, an on-demand payroll system has the potential to overcome the limitations of the current payroll process for contingent workers and freelancers.

Financial wellness: This will help workers better plan and budget their expenses, preventing them from running into cash flow problems. Additionally, it will help them stay away from predatory lenders and payday loan products that can lead to added fees and greater financial burdens.

Expedited payroll for unexpected situations: In cases of missed payroll deadlines or an employee’s unexpected departure, an on-demand payroll framework can eliminate any delay and proceed with the payment instantly.

All this results in better employee engagement and satisfaction, leading to an overall increase in the employee experience.

Employers will also benefit. Given the strong link between financial stress and employee health, on-demand payroll will result in reduced absenteeism and increased employee productivity and retention.

On-demand Payroll Solution Ecosystem

Payroll service providers and FinTech companies are developing capabilities to support enterprises’ desire to move to on-demand payroll. For example, there’s been a rise in financial wellness platforms that help employees budget, plan, and track their expenditures and savings. And digital wallets and pay cards can serve as alternatives to banks by acting as vehicles for direct deposit and allowing payments for purchases, and can facilitate faster payroll payouts.

Two Most Common On-demand Payroll Scenarios

Earned wage payments –The employee uses the on-demand payroll platform to request payment for hours/shifts worked, choosing to receive the payment in a wallet, on a pay card, or into a selected bank account. The deduction is calculated into the employee’s regular cycle payroll payment, whether it was for the full or partial amount.  For this to work effectively and seamlessly, the enterprise needs to have an integrated system that can access all the relevant information needed for payroll processing, such as work hours data, tax related information, and employee data.

Advance payments – The employee asks for a salary advance (the maximum amount may be limited by company policies.) Although this scenario does not require a sophisticated and integrated system, enterprises must carefully track these transactions to make sure they’re properly accounted for, and to avoid running into cash flow issues.

Questions to Consider

Just like all other innovative approaches, on-demand payroll also comes with its fair share of challenges. So, here are several questions you should ponder before making the move.

Will there be an impact on my enterprise’s cash flows?

While employers may embrace a heightened role in their employees’ financial wellness, changes in pay schedules can mean disruption to cash flow management and forecasting, as well as added administrative burdens.

Will this impact tax calculations and payments to the government?

Due to the personalized nature of payments, employees may be withdrawing cash during non-standard financial cycles. Enterprises need to take into consideration whether it will impact the various mandatory reporting mechanisms, government payments, and filings.

What commercial model should be employed when a platform is used?

The most appropriate commercial model will be jointly determined by the on-demand payroll platform provider and the enterprise. Points to factor into the decision include whether or not the employees will be charged for using the platform, and whether a bank must be involved in advance salary requests.

How will the system be implemented?

Enterprises will need to integrate the various components required for a seamless transition to the new system, including time and attendance, the payroll platform, etc. They must pay particular attention to how the relevant data will be accessed, processed, and reported.

On-demand payroll forms a crucial part of the broader concept of “Employee Experience Suites.” Our upcoming three-part research series will cover these, practical ways to improve the employee experience, and some of the startup trailblazers disrupting this area.

Is your enterprise planning to reimagine the payroll process? Have you successfully implemented on-demand payroll? We’d love to hear from you about your experiences, questions, and concerns. Please connect with us directly at:

[email protected]  and [email protected].

Can Indian Tier-2/3 Cities Fit the Bill for Digital Services Delivery? | Sherpas in Blue Shirts

By | Automation/RPA/AI, Blog, Shared Services/Global In-house Centers, Talent

India continues to offer an attractive service delivery location proposition for global companies, given its unique combination of a low-cost, scalable English-speaking talent pool, and the breadth and depth of available skills.

As the global digital services industry matures, and with increasing competition in the tier-1 cities, companies are looking to reduce the costs of talent and access additional untapped talent pools for digital services delivery.

Can tier-2/3 cities in India fit the bill? Let’s start by looking at the current state of digital services delivery in these cities.

Existing Landscape

Today, India is the largest destination for digital services delivery, with 75 percent of the market. Tier-2/3 cities in the country currently hold 14-16 percent of the market share, and we expect this proportion to grow by 15-20 percent in the next couple of years. Ahmedabad, Chandigarh, Coimbatore, Indore, Jaipur, Kochi, Lucknow, T-puram, and Vadodara are the top nine tier-2/3 locations, accounting for 55-60 percent of the digital services headcount in tier-2/3 cities.

Tier-2/3 cities are mostly leveraged to provide social & interactive (41-43 percent), cloud (21-23 percent), analytics (16-18 percent), and automation (10-12 percent) related services. When it comes to sophisticated digital technology services, such as cybersecurity, mobility, and Artificial Intelligence (AI), service providers still prefer tier-1 locations such as Bengaluru.

Major digital services Tier 2 3 blog

Now, let’s evaluate how tier-2/3 Indian cities’ value proposition stacks up against tier-1 cities.

 

What’s ahead for India’s Tier-2/3 Cities?

 Here are some of the key findings from our recently published report, “Will Tier-2/3 Indian Cities Carve a Niche in the Digital Story?

  • Tier-2/3 cities will continue to be leveraged predominantly as spokes to major hubs in tier-1 cities for the next two to three years
  • Because of a lack of skilled talent, delivery of advanced digital services such as machine learning, cyber security, and mobility from tier-2/3 cities will remain a distant dream for the next few years
  • An increasing number of enterprises will set up global in-house centers (GICs) or shared services centers for delivery of digital operations, due to increasing confidence and improvements in infrastructure quality
  • Reskilling/upskilling for digital capabilities will be paramount for companies operating in these cities
  • A few large service providers will invest in training talent, and benefit from early mover advantage by becoming distinguished employers in a less competitive market

To learn more – including the metrics around availability of talent, market maturity, cost of operations, business and operating risk environment, and implications for market participants including buyers, service providers, investment promotion councils, and industry bodies – please read our recently published report, “Will Tier-2/3 Indian Cities Carve a Niche in the Digital Story?.” We developed the report based on deep-dive discussions with leading shared services centers, service providers, recruitment agencies, and other market participants.

Next-generation HR: Key Considerations for Successful Adoption | Sherpas in Blue Shirts

By | Blog, Digital Transformation, Talent

HR has certainly come a long way in being perceived as a strategic function with significant impact on business outcome. Yet, despite workforce and technology investments, multiple challenges – including the growing talent deficit, problems with skilling and retaining niche talent, and the increasing flexibility and better experience demands of Millennials and Generation Z – are inhibiting HR departments from attaining their full strategic potential on behalf of the enterprises they serve.

The solution is moving to a next-generation HR model with digital transformation at the core.

Next-gen HR Model

The inefficiencies of the traditional model – siloed HR systems, a large number of touchpoints, and a disjointed employee experience – are clearly exposed by the challenges cited above. The next-generation HR model addresses these issues with a cloud-based platform at the center, augmented by technologies such as advanced analytics and automation. This results in an intuitive and integrated model that has the ability to provide an enhanced employee experience.

To successfully adopt the next-generation HR model, enterprises should take a structured approach that considers several important factors.

Employee Experience Should be the Focal Point

While the importance of operational cost reduction and process standardization can’t be disparaged, enterprises should prioritize the employee experience when they plan for a digital HR transformation. Be it HR service delivery or technology modernization, the end goal should be to provide an integrated, intuitive, and seamless employee experience to better attract, engage, and retain talent.

In our recently published report, “The Key Ingredients for a Digital-First HR Transformation,” we identified two critical components of the best employee experience:

Empowerment: HR should offer employees integrated, accessible, and disintermediated workflows and systems that empower them to serve themselves. Methods include employee self-service tools, omnichannel experiences, chatbots, and analytical tools, all of which enable employees to have more control over the decisions they make.

Engagement: Millennials and subsequent generations exhibit different behavioral patterns, are digital natives, and expect seamless employee experiences. Enterprises should adopt solutions that enable HR to engage and retain this ever-evolving talent. Solutions that are integrated, user-friendly, and provide consistent experiences across sub-processes / third-party portals with optimized response times and accuracy should be the key focus areas.

Ensure Orchestration of Digital Technologies to Maximize Impact

Rather than implementing a handful of technologies haphazardly, enterprises must take an orchestrated approach to digital HR transformation that enables the technologies to feed off each other, find synergies, and maximize the impact.

The findings in our recently published report made it clear that while each individual technology lever (see chart below) is powerful, enterprises can realize the maximum transformative impact when all the levers are applied in cohesion.

Technology in HR

Why is this? Although the impact of technologies such as Robotics Process Automation (RPA) and BPaaS are focused on enhancing the efficiency of various processes, predictive and prescriptive analytics are capable of deriving net new insights.

On the other hand, cognitive/AI technologies such as Natural Language Processing (NLP) and Machine Learning (ML) can be bundled with other digital levers to significantly improve the stakeholders’ experience, in addition to increasing efficiency and providing net new gains.

Engage Service Providers for Help

To help support buyers’ growing demands and needs, service providers are increasingly offering HR and technology consulting services. Capabilities they offer include:

  • How to understand and plan for the impact of digital adoption on the enterprise’s workforce
  • How to adopt and derive value out of digital investments (i.e., third-party cloud solutions such as Workday, SuccessFactors, and ServiceNow, automation, and analytics solutions)
  • How to optimize HR processes

With technology changing so rapidly, organizations need to make sure that they fully embrace digital transformation, and buckle up to face and be ready for the changes. Many organizations are already working in this direction.

To learn more about this topic, our recent report titled “The Key Ingredients for a Digital-First HR Transformation” identifies and deep dives into five key levers (automation, analytics, cloud, advisory, and employee experience) that will help enterprises successfully transform their HR function.

Is your enterprise planning to undergo a digital HR transformation? Have you completed it? We’d love to hear from you about your experiences, questions, and concerns. Please write to us at: [email protected] or [email protected]

Upskilling and Reskilling: Is It Just Good L&D or Something Different? | Sherpas in Blue Shirts

By | Automation/RPA/AI, Blog, Shared Services/Global In-house Centers, Talent

Is upskilling and reskilling little more than a thinly disguised attempt by HR departments to rebrand Learning and Development (L&D)? The answer, as one practitioner pointed out at a conference in Poland, is “no.”

I recently presented to the Association of Business Services Leaders (ABSL) Chapter in Krakow, Poland about the talent acquisition challenges that digitization poses to Shared Services Centers (SSCs.) The argument runs roughly like this:

  • Robotic Process Automation (RPA) is replacing human agents in transactional roles, freeing up capacity in the workforce. This can mean lay-offs at worst, or unqualified internal candidates reapplying for roles at best
  • There is greater demand for people with new skills both technological (design thinking, robotics, autonomics, analytics) and soft (pattern-recognition, complex problem solving, leadership, intuition) than can be met by simply recruiting externally
  • As automation takes care of transactional processes, organizations can enhance the value of their brands and the service they provide by having more people in roles which emphasize first contact resolution, emotional intelligence, listening, etc.
  • This new value chain focuses on outcomes: people are measured against quality of outcome rather than throughput (for instance, a shift from average handling time to CSat), which in turn requires new management thinking around staff incentives, culture, and business model.

The data in the presentation was based on the Everest Group survey of 81 SSC leaders in Poland, the Philippines, and India, published earlier this year (see “Building a Workforce of the Future – Upskilling/Reskilling in Global In-house Centers.”)

So obvious was the message that emerged from the survey that one or two skeptics in the audience questioned why retraining that part of the workforce most affected by the trend of automation was even worthy of discussion. Is it not just good L&D practice? And surely survey respondents would not admit to anything other than good practice when asked the question?

Not quite true: there were survey respondents, albeit no more than 10 percent of them, who said that they were not planning to undertake upskilling and reskilling as a means of addressing talent shortages. A small majority, 58 percent, said upskilling/reskilling was the highest priority in addressing this same problem, while 10 percent, possibly the same nagging 10 percent, said it was a low priority.

The discussion continued after the presentation. Without experience as a practitioner, I wrestled with an explanation as to why this 10 percent stubbornly refused to fit the theory. Thankfully, the HR head of a Krakow-based SSC rode to my rescue and gave the answer.

This is the group, she said, which understands that reskilling and upskilling is indeed good L&D practice but remains wedded to external hiring of permanent and temporary staff. It is the group that fails to see that existing employees must be recognized as the key pool to meet scarce talent requirements in SSCs.

Her explanation, thankfully, echoed our contention that successful application of reskilling/upskilling to talent acquisition needs:

  • Senior leadership backing to ensure adequate resource and profile within the organization
  • Implementation of a skill-specific talent acquisition strategy to identify both critical areas of shortage and those most suitable for reskilling/upskilling
  • Quick roll-out of pilots in critical areas of shortage to build confidence and to learn
  • Breaking down of functional barriers and giving employees wider exposure to functional roles
  • A combination of effective duration and appropriate method (job rotation, on-the-job training, mentoring, peer-to-peer learning, and specialist external providers)
  • Clear communication of career paths, internal opportunity, incentive, and compensation
  • Patience and persistence!

She explained further. In her experience, the real difference between reskilling/upskilling as good L&D practice and reskilling/upskilling as a talent acquisition solution is simple. The talent acquisition solution approach is not considered aspirational, “something that HR does,” or nice to have. Rather, it is a strategic imperative.

How nice to have somebody who really knows what they are talking about answer a difficult question on my behalf!