London, 4 April, and Intelligent Sourcing was delighted to co-host a dinner with The Everest Group in the Royal Horseguards Hotel. Speakers were uniformly excellent and the willingness of the guests to join in with a discussion (Chatham House Rule so no names) was a joy.
There will be a report in the “Out and About” section of the next issue of the magazine, due in June, but it’s worth highlighting a few points. Everest vice president (and Intelligent Sourcing contributor, we feel importantly) Anurag Srivastava outlined where the current state of digitalization was in and blew up the myth that the millennial generation is putting pressure on customer experience; it may be that they are pointing out what’s possible but by now every generation has huge expectations. Vice president (and Intelligent Sourcing magazine contributor as before) Sarah Burnett pointed to the amount of money there was in the channel – with UI Path recently being valued at £7bn there was no question that people were expecting a lot of growth.
A chatbot programmed to be a seven-year-old boy has become the first artificial Intelligence (AI) bot to be granted official residence in Tokyo, Japan. A NZ-based entrepreneur developed the “world’s first AI politician,” who is expected to run as a candidate in 2020. The CEO of Deutsche Bank estimates robots could replace half the bank’s 97,000 employees. U.S. Defense Secretary Jim Mattis implored President Trump to create a national strategy for AI. The University of Central Florida’s Center for Research in Computer Vision developed an AI-based system to detect often-missed cancer tumors.
The above references highlight a mere fraction of the recent cognitive and AI-based developments. With every passing day, next-generation technologies are integrating seamlessly into our everyday lives. Enterprises, service providers, and technology enthusiasts across industries and business domains are closely looking at these revolutionary and rapidly evolving technologies, which currently seem to have only the sky as the limit to the number of use cases they can generate and empower. Indeed, countries the world over are welcoming this change, with the UAE recently becoming the first to appoint a minister for AI.
All Business Processes are Beholding this Change, and Talent Acquisition is no Exception
Why do businesses need to embrace this change? The answer is simple: technology is no longer a means for savings money – factors such as enhancing the stakeholder experience and mining hidden insights are becoming even more crucial for companies to sustain their operations and stay relevant in the ever-changing economic environment.
The entire global services industry is undergoing a tremendous transition from labor arbitrage to a digital-first model. In the HR space, talent acquisition (TA), including both permanent and contingent workforce acquisition, is continuously developing as a space ripe for ever-evolving innovation. Startups, HR tech incubators, and investors continue working towards eliminating recruitment pain points and creating a seamless hiring experience for both candidates and recruiters alike.
Where is the Journey towards Digitalization of TA Heading?
A host of technology offerings – from basic automation tools to gamification solutions to higher-end point solutions and cognitive and AI systems – are emerging in the TA space. And per our recent research to understand where service providers and enterprises are in their journey toward unveiling the full potential of these technologies, the emerging landscape looks promising to kick-start a digital revolution that can transform TA in ways never imagined before.
The following exhibit highlights four key new-age technologies that are finding significant traction in the TA space. The proper conjunction of all these technologies, just like the various organs of a human body, will give rise to effective and more efficient TA systems.
Within TA systems, Analytics applications act like the left brain hemisphere, executing the more logical, analytical, and objective tasks that need to be accomplished. NLP applications act like the right brain hemisphere, executing the more intuitive, thoughtful, and subjective functions. RPA drives the implementation as the muscle, completing the loop to accomplish the objectives, and targets the left brain, the right brain, or both. ML acts as the layer that sits behind all these technologies, and enhances the output further by giving machines the ability to remember and learn from patterns or behavior of the engaging stakeholders, gradually eliminating manual intervention completely.
Here’s a simple example to demonstrate this process in TA: NLP applications learn about candidates – say from resumes, social media, etc. – to help analytics systems evaluate and predict best fit candidates from the information learned. RPA then reaches out to the shortlisted candidates. And all the while, ML technology carefully observes and documents everything to train the systems for better future use.
What’s on the Immediate and Near Horizon?
While some TA functions and tasks have already been automated, our research suggests that within the next five years, over 50 percent of them can be further digitalized leveraging next-generation technologies. The applications of these above technologies in TA are many-fold – AI-based sourcing and screening; psychometric, behavioral and gamified assessments; chatbot-driven candidate communication; and cultural fit, future performance, and attrition prediction – to name just a few.
The ultimate aim is to simultaneously engage and win quality hires, leave a lasting candidate experience, and remove all manual, non-core functions from recruiters’ and hiring managers’ plates.
The time is right for taking a holistic technology-driven revamp of TA functions to stay ahead of the curve in the quest for winning talent in a market that is agonizingly short of quality talent!
Click here for a detailed view on the next-generation technologies shaping TA. And here for a deep-dive into the process and technology digitalization potentials in TA.
Healthy P&C Insurance BPO market has grown 17 percent since 2012 and is expected to grow 14 to 16 percent through 2017.
The global property and casualty (P&C) insurance business process outsourcing (BPO) market registered nearly 17 percent compound annual growth rate (CAGR) over the last few years to reach US$1.45 billion, according to new research from Everest Group. Amid political uncertainties in the United States (due to the presidential election) and the United Kingdom (due to Brexit), Everest Group expects the market to grow at 14 to 16 percent, reaching US$1.9 billion by 2017.
The growth potential of the P&C Insurance BPO market is highly attractive to service providers, but with over US$460 million up for renewals in the next three years, competition will become more intense. Everest Group advises service providers to differentiate themselves through specific value addition capabilities, particularly analytics, robotic process automation (RPA), and third-party administrator (TPA) capabilities.
Analytics: P&C Insurance BPO buyers are looking for a wide range of analytical capabilities, ranging from basic reporting-focused offerings to highly sophisticated predictive and prescriptive analytics solutions. Analytics solutions are particularly desired to address fraud identification and prevention. Fraudulent disclosures and claims amounted to 6 percent of total premiums in the United States in 2015.
RPA: P&C insurers are expecting service providers to offer RPA solutions that can automate rule-based processes. Automation solutions are being highly leveraged in claims processing as well as policy servicing and reporting, resulting in improved efficiency, faster processing, and higher accuracy. RPA can yield incremental cost reduction anywhere from 15 percent for offshore operations to as high as 45 percent for onshore operations.
TPA: Certain processes such as premium collection, claims adjustment and claims disbursement, particularly in the United States, require service providers to possess a TPA license for each of the states to be operational in. Service providers with TPA capabilities and relevant BPO experience will be able to offer end-to-end process coverage, including the complex pieces and therefore have a competitive advantage.
“Digitalization is another key driver that will impact this market,” said Skand Bhargava, practice director, Business Process Services, at Everest Group. “P&C insurers need to respond to the strong and growing consumer preference for digital channels, and most will turn to service providers to help them build multi-channel capability and improve time to market with these digital products and services. Digitalization is one more example of how service providers are progressively managing a larger part of the P&C value chain, far beyond claims processing.”
Nearshoring is on the rise thanks to a number of reasons such as the affinity between British companies and their European peers and a pool of highly qualified workers. “With increasing digitalisation, we see nearshore locations being better equipped for some types of processes that require close cultural alignment with Western Europe”, says Sarah Burnett, vice president of research at the Everest Group. Read more.