Tag: talent

Talent Shortage Expected to Hamper Innovation, Customer Service in 2019, According to Everest Group Report | Press Release

Firm to share research findings on enterprise key issues and offer insights, recommendations on outsourcing.

Talent challenges are starting to create real hardship for enterprises—hampering innovation, delaying implementation of critical projects, and adversely impacting customer service—according to the results of a recent Everest Group survey of global enterprises. Enterprises rank the difficulty of finding, retaining, upskilling and reskilling talent among the three most pressing issues they will face in 2019. Pricing pressures and adapting to shifting business models round out the list.

Everest Group will discuss these insights in a webinar on Thursday, December 13, at 9:00 am CST:Enterprise Key Issues in Global Sourcing: Exposing Disconnects and Unlocking Opportunities.There is no charge to participate.

“At Everest Group, we believe that talent shortages will continue to become more chronic as demographics and policies combine to exasperate available labor challenges, particularly in the U.S. and Europe,” said Michel Janssen, chief research guru for Everest Group. “Organizations will be forced to use automation technologies of all kinds to make their existing workforce more productive.”

Despite the challenges enterprises face, the majority of respondents to the Everest Group survey (51 percent) viewed 2018 as a great year, and 84 percent expect growth in 2019.

In the webinar, Everest Group experts will address the following topics:

  • Talent challenges – finding, retaining, upskilling and reskilling – are having a real, negative business impact and lead the list of enterprise key issues for 2019.
  • The role of the chief digital officer continues to expand. Study participants from both the enterprise and service provider viewpoints reported significantly increased decision making capacity and budgets going into 2019.
  • In a recent survey, service providers indicated their top technology investments are robotic process automation (RPA) and artificial intelligence (AI)/cognitive computing; however, those don’t match enterprises’ top investment priorities, which comprise cloud solutions, automation and big data analytics. Everest Group experts will discuss the mismatch and what it means.
  • While cost reduction remains a high priority when outsourcing, it’s not in the top two value propositions among survey respondents.

***Register for Complimentary Webinar here***

What Are the Hot Global Services Initiatives for 2019? | Sherpas in Blue Shirts

There is little doubt that 2018 has been an interesting year.  And it makes one wonder what’s ahead.

As we all know, the fate of most businesses is now based upon the global economy. In the U.S., the economy has been on fire with great GDP growth, record stock markets (until the recent dip!), and unemployment rates that are at generational lows. But President Trump’s “America First” policies have introduced a layer of uncertainty to the business world. And the rest of the world certainly has experienced a mixed bag of economic results.

So, what’s next? While it is easy to worry about rising interest rates, tariffs, increasing global/regional geopolitical tensions, and maybe even global warming – none of these issues are directly within your business’ leadership team’s control.

Yet, there is one common issue (at least in the U.S./European markets) that is becoming even more persistent, and that is the talent shortage across many different segments of the economy.  Our hypothesis is that organizations are going to need to double down on their automation efforts to get more productivity out of their existing workforce.

Do you agree with our automation prediction? Or are there other challenges more pressing for your organization? We want to hear what you think are truly the most important topics impacting your organization and its plans for 2019.

Take our 10-minute survey and let us know what you think about:

  • Your top growth challenges
  • Changes in global services buying centers and service delivery activities
  • Your digital priorities
  • Your talent challenges and priorities

As thank you for your participation, we’ll share a summary of the results; you’ll gain a comprehensive understanding of the areas where your peers are focusing their attention. Are they the same as yours? Completely different? A mix? Will 2019 be a repeat of 2018 Crazytown? Take the survey and see. (Although no promises on getting the right answer to that last one.)

TAKE ME TO THE SURVEY

Fresher-heavy talent pyramid of Infy heads to US | In the News

India’s second-largest software services exporter Infosys is taking its time-tested talent pyramid model — with a large base of freshers at the bottom — to the US where it plans to hire more than 10,000 people in two years.

Peter Bendor-Samuel, chief executive at Everest Group, however, expects the increased local hiring on-site to impact Infosys’ operating margin.

“I do not think that the hiring of US talent, which is replacing importing Indian talent, will better position Infosys or any other of the Indian firms in their ability to win business,” he said. “In fact the higher cost of this talent will negatively affect margins. We estimate that over time it is likely to cost Infosys up to 3 points of margin.”

Read more in The Economic Times

 

Clues into Amazon’s HQ2: What Does the Vancouver Announcement Tell Us? | Sherpas in Blue Shirts

In early November, Amazon announced that it will expand its presence in Vancouver from 1,000 jobs to 2,000 jobs by 2020. Although this did not receive nearly the same attention as Amazon’s request for proposals for the 50,000 employee location dubbed “HQ2”, there are some valuable clues to glean (see our earlier detailed assessment on the viability of Amazon’s HQ2 strategy and potential locations for our more complete analysis).

We read three important clues in this announcement.

  1. Vancouver is not a serious HQ2 candidate. Although Amazon is clearly comfortable enough with Vancouver to continue expanding there, it is a signal that Vancouver is not a serious candidate for the second headquarter location. If Amazon felt otherwise, the announcement did not need to be made and lose leverage in negotiating incentives for HQ2. There are multiple reasons why Vancouver may not be a strong candidate – size or cost of talent pool, too similar to Seattle, no time zone diversification, or that the complexities of operating in Canada outweigh the benefits of mainly operating in the U.S.
  2. The targeted scalability of HQ2 is going to be REALLY HARD. Assuming that Vancouver and HQ2 will have roughly similar mixes of talent, we can see that Amazon is scaling at only 15% of the rate targeted for HQ2. After setting up in 2015 and reaching 1,000 employees in 2017, Amazon is planning to reach 2,000 employees by 2020. Let’s assume that is 2,000 people over four years for an annual rate of 500 net-new employees. HQ2 is targeting 50,000 employees over 15 years, which is over 3,000 per year – 6 times what is being achieved in Vancouver. This supports our earlier view that any city under 4 million in population is clearly not viable (Vancouver is under 2.5 million) and even the largest cities (which are 7-15 million) will struggle to consistently grow at the rate indicated by Amazon for HQ2.
  3. Hmmm…is Amazon truly serious about HQ2 as stated? For purposes of our earlier analysis, we assumed that Amazon truly intended to pursue its stated vision (up to 50,000 employees in 15 years with an average salary in excess of US$100,000 and the HQ2 acting as an equal to Seattle). The announcement about Vancouver is interesting and revealing because it is inconsistent with Amazon seeking to aggregate its scale into large locations. A 2,000 employee location is certainly large, but it is much smaller than currently located in Seattle or the planned HQ2.

If centers at much smaller scale are valuable to Amazon, why even pursue the HQ2 strategy?

First, Amazon might realize that a single 50,000 location is likely too big and contemplating whether it can make “clusters” (cities within very short distances from each other) produce similar benefits as a single location, which would be multiple buildings anyway. If Amazon believes this, it might be looking to select multiple cities within a cluster for the HQ2 strategy (think Philadelphia, Baltimore, Washington, DC).

Second, Amazon may have intentionally set a very, very large 50,000 employee target to get maximum attention and creativity, but is planning to structure the eventual single location agreement to only commit to 5,000-10,000 employees. Still very large, but something it has a much easier chance to fulfill and then potentially exceed as it so desires.

In summary, we believe these clues Echo many of our earlier perspectives and underscore that the eventual outcome may be quite different than stated – we remain Primed to hear what Amazon decides in 2018.

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