Strategies to Expand Labor Pools Today and in a Recession | Blog

May 10, 2022

In today’s hot labor market, with a difficult gap between talent demand and available resources, companies must try to widen the area where they can recruit workers, and hunt for labor pools in new, smaller markets. Google and other tech companies are reaching out to labor markets on the West Coast and in small markets in remote cities. FedEx and other large companies are investing in expensive TV ads to reach workers in non-traditional labor pools. However, the signs are clear that a recession will be upon us in months, and the new strategies for expanding a labor pool often have long run times. What are the best approaches to expand labor pools now?

Technology Platforms that Address Talent Management Challenges | Market Insights™

April 26, 2022

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5 Steps to Managing High Outsourcing Spend | GSA On-demand Webinar

April 21, 2022

According to Everest Group, 43% of service providers are actively seeking to increase prices on existing contracts. Globally, there has been an average of a 6% increase in price requested by service providers.

Join Ricky Sundrani, Vice President at Everest Group, in this webinar hosted by GSA to explore:

What are the increased pricing trends across technology and business services
What does the future of pricing look like
How to best address inflation in contracts
How to best negotiate price increases
How can we ensure that price increases are reaching the employees of service providers
Should there be industry standard guidelines on how to approach this subject

Watch Now

When

Presented live on Thursday, April 21, 2022

Presenters

Ricky Sundrani
Vice President, Everest Group

Mark Crichard
Partner – Commercial, Technology and Outsourcing, RPC

Kerry Hallard
CEO of the GSA

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9 Outsourcing Myths Debunked | In the News

April 13, 2022

The global IT services industry has emerged from two-plus years of a global pandemic to establish itself as even more vital to the success of enterprise IT organizations. As corporate IT looks to manage unrelenting demand for technology-enabled change in a challenging talent environment, outsourcing partnerships have proved pivotal.

“Companies are finding it exceedingly hard to find skilled talent especially in the US and Europe, and consequently outsourcing (and offshoring) are becoming important for companies to access talent in labor markets such as India,” says Jimit Arora, Partner at Everest Group.

Record Net Employee Addition by TCS, Accenture in Last One Year | In the NEws

April 12, 2022

Information technology giants Tata Consultancy Services (TCS) and Accenture reported record net employee addition in the last one year with over a lakh increase in headcount by each, indicating strong demand and business momentum in the coming quarters. Employee addition is one of the key measures indicating the business outlook.

According to Yugal Joshi, Partner at Everest Group, a global research firm, hiring is indeed a strong indicator of demand. However, service providers do not reveal their hiring trends globally, but are generally focused on India.

Deconstructing the Future of Work | In the News

April 12, 2022

Four-day weeks, on-demand pay, “rural” talent, digital workers… in recent times, we’ve heard these ideas accompanied by seemingly teleological questions about work as a construct.

The timing is understandable given the confluence of factors at play – the rise of digital, labor pyramid issues, and the after-effects of a global pandemic, including a desire for more meaning in work and convenience through remote work. After years of navel-gazing, society is finally waking up to the fact that our jobs, the way we do them, the time we spend, and the very fundamentals of the nature of work itself are perhaps incongruent with the world we now live in.

This realization opens up the very 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, and how do we design for it? Fundamentally, we can break it down into three distinct components: the how, the where, and the who.

Read the full article on Business Reporter

Talent Crunch Pushes up Pricing of Time and Material Projects for IT Firms | In the News

April 8, 2022

The IT services industry is facing a severe demand and supply imbalance for talent. This, in turn, has led to an increase in pricing by 15% for time and material (T&M) projects where clients pay only for time and resources spent.

During the height of the pandemic, many companies pushed their service providers to reduce pricing and so, some hikes are a reversal of that too, said Yugal Joshi, Partner at Everest Group, a global research firm.

Innovative Strategies Driving Talent Sourcing and Acquisition in the Philippines

April 7, 2022

The traditional strategies for finding the best recruits for jobs are changing. With the talent shortage across all industries, companies are taking innovative approaches to talent sourcing and acquisition. Where will your next-generation talent come from? To stay on top of the war for talent, read on to learn the emerging tactics and a comprehensive framework to expand the candidate pool.

Traditional talent sourcing strategies

The commonly used practices for proactively locating the best potential hires for open or future positions are no longer enough with the great need and talent shortage. Traditional talent sourcing strategies have included:

Using internships to lure top prospects and hiring recent graduates
Hiring from within the same industry or location, which offers the benefits of domain knowledge and cultural fit
Relocating talent from other locations for their experience, skills, and ability to learn
Offering flexible employment such as part-time work and fixed-term contracts. While this is a growing trend, alternative talent for most companies is typically less than 15% of the total workforce, especially for IT and niche skills

Innovative talent sourcing and acquisition strategies

The quest for the right skill sets and talent is driving organizations’ hiring decisions and motivating them to try new operating models. Based on our latest research on the Philippines market and beyond, here are eight emerging talent sourcing and acquisition strategies to consider:

Acqui-hiring or hiring through Mergers & Acquisitions: Acquiring start-ups primarily to recruit their employees with specific talent
Satellite centers to augment traditional hubs: Setting up small satellite offices to diversify delivery location portfolios, creating extended “spoke” offices without setting up large physical sites to attract talent from a wider area
Collaborating with the external ecosystem: Strengthening connections with academic institutions, start-ups, and service providers to leverage their talent pools to develop holistic solutions, increase agility, and reduce go-to-market time
Work from Home or Anywhere (WFH/WFA): Exploring work from home or work from anywhere models now, particularly since COVID-19 has increased the acceptance and openness to virtual delivery models
Gamification/simulation-based screening assessments: Using gamification-based assessments instead of a traditional interview process with a focus on hiring for learnability and applying skills rather than possessing the core skill itself
Hiring next-generation talent and “problem solvers” through hackathons: Hiring candidates through coding events such as hackathons to attract a wider pool of talent from multiple sources and different backgrounds, and to engage with the student community
Co-creating a curriculum: Partnering with educational institutes to introduce curated courses for developing and attracting talent with specific skillsets

Comprehensive framework to expand the talent pool

Everest Group has developed the following comprehensive framework to incorporate the many ways organizations in the Philippines are widening their access to candidates to meet ever-increasing talent requirements.

Below are some approaches leading enterprises are exploring:

Leverage tier-2/3 locations: Tier 2/3 locations: Bacolod, Cebu, Davao, Iloilo, and Pampanga (Angeles City, Metro Clark) for the following reasons:

- Lower operations costs – Costs in tier-2/3 cities are 10-20% lower compared to a typical tier-1 city because of lower salaries and facility-related expenses
- Better work-life balance – Tier-2/3 cities provide a decent alternative because employees don’t need to travel to tier-1 cities for employment. The growing adoption of the long-term WFH model may also increase the pool of tenured IT talent operating from these locations
- Reduced risk – Tier-2/3 locations can act as Business Continuity Planning (BCP) locations to tier-1 locations, providing opportunities to diversify delivery location risk
- Lower human capital costs – Multiple tier-2/3 cities offer a large, untapped talent pool with relevant skills, providing scalability and the potential to reduce people costs
- Greater retention – Attrition rates in tier-2/3 locations are 10-15% lower than in tier-1 locations, translating into better service delivery and lower hiring and training costs

Adopt the contingent workforce model: Using contingent workers such as freelancers, independent contractors, consultants, or other non-permanent workers offers cost savings, increased flexibility, and caters to workers’ changing preferences. This trend is growing with 36% of enterprises classifying more than
16% of their workforce as contingent workers
Increase the use of gig workers: Accessing next-generation skills in locations where companies do not have a physical presence for short-term assignments, tasks, or jobs
Establish satellites/pods: Setting up small-scale (less than 50 full-time equivalent employees) or sub-scale centers, typically within a shared workspace to tap into new locations. Additionally, these arrangements enhance access to scarce talent and aid in Business Continuity (BCP) goals, provide a platform for possible collaboration, Centers of Excellence (CoEs), and offer flexible workspaces
Adopt internal and external crowdsourcing: Leveraging social media and networks to spread the word about job availability. Crowdsourcing across companies has been on the rise
Explore talent hotspots: Establishing a presence in emerging talent hotspots (e.g., Israel, Lithuania, Egypt) to access next-gen skills

We expect a notable increase in the adoption of these talent sourcing and acquisition strategies over the next six to 12 months by Philippines-based shared service centers and other organizations.

To share your comments and questions on talent sourcing and talent acquisition, please reach out us: contact us.

To learn more about the talent shortage and hear ways to rethink talent strategies and expand reach, watch our webinar, “Is the Talent War Threatening the Success of Your GBS?”.

Look at Latin America to Emerge Post-COVID as a Leading Global Service Delivery Destination

April 7, 2022

As the world emerges from the pandemic and looks for new destinations for high-end information technology and business process services, put Latin America on the radar screen for its lower costs, talent availability, language proficiency, and other factors. Learn why this region is an attractive emerging destination for global service delivery, what countries offer the most promise, and the trade-offs and risks.

Latin America has emerged in recent years as a leading nearshore destination for companies in the US and Canada, primarily driven by its unique position of cultural parallels and geographic proximity to the North American market.

This popular delivery destination for IT and BP services has undergone dynamic shifts in the past few years, and its location can be increasingly critical post-pandemic to filling talent gaps and providing a more stable geopolitical climate than destinations in Europe, given the current Ukraine-Russia conflict.

Increased capabilities, aided by digital infrastructure investment, and scaled operations delivery are attracting companies to leading locations such as Mexico, Argentina, Brazil, and Costa Rica. Companies that are reimagining delivery in Latin America and growing operations in the region are differentiating themselves by capitalizing on the region’s attractive proposition.

Other favorable factors such as lower costs compared to North America, increased government support, and rising English proficiency are enabling growth, especially for the contact center industry. While promising, organizations need to be aware of some trade-offs and associated risks for operating in the region.

Trade-offs and risks

Organizations looking to enter the Latin American market should be concerned about market congestion, lack of digital infrastructure, and an unfavorable macroeconomic environment in a few key locations.

Leading cities in the region (e.g., San Jose, Mexico City, Sao Paulo) are experiencing growth in competitive intensity, threatening their cost arbitrage against North America. Moreover, countries like Argentina, despite their large talent pool, are facing major macroeconomic challenges brought forth by the pandemic.

On the other side of the coin, countries such as Jamaica, Uruguay, and Guatemala have low market congestion and are primarily leveraged for transactional BP services but have limited maturity in IT and engineering services. Organizations keen to support complex and judgment-intensive processes will need to make substantial investments in talent development in these markets.

Further Latin American destinations also face some challenges around reliability and digital infrastructure scalability. While investments are continuously being made in this area, certain countries within the region still rank relatively lower on the digital readiness scale. This potentially poses challenges for remote working in the post-COVID era.

Leading Latin American locations for financial attractiveness, talent availability, and operating and business environment

Here’s a quick look at the top four global services delivery locations by largest to smallest market size in Latin America:

Mexico – boasts the largest scale among Latin American locations for global services delivery (both transactional and judgment-intensive processes). Leveraged to support IT-BP service delivery along with next-generation digital services (e.g., Artificial Intelligence, Internet of Things, analytics), the market faces one of the highest competitive intensity in the region, driven by a large player base and strong sector growth
Colombia – primarily a global hub for voice-related services and transactional BPS delivery. Although it has limited maturity for next-generation digital services delivery, it holds the potential for increased IT and non-voice BP services delivery, given its large talent pool
Argentina – a large-scale, multi-functional hub location to support service delivery to the Americas and some European locations. It exhibits relatively high maturity for next-generation digital services, including AI, analytics, cloud, and IoT, delivered from its highly congested Tier 1 cities
Brazil – primarily delivers IT and BP services to Latin American locations. It has a large base supporting domestic demand (within the country) but global service delivery is limited. While it has a highly skilled talent pool supporting complex/niche skills and judgment-intensive IT work (e.g., cloud computing, big data), its more costly base owing to higher salaries and real estate costs affects its attractiveness as a global service delivery destination

Global service delivery destination to watch

Latin America is well placed in its growth journey to emerge as one of the leading nearshore destinations. Industry verticals such as retail, telecommunications, and Financial Services and Insurance (BFSI) continue to drive overall regional demand. Its unique positioning, strong government support, and growing talent pool make the region a destination of choice for some of the world’s biggest brands, including Amazon, PricewaterhouseCoopers, Galileo, and Pinterest, among others.

To learn more about the dynamics in the region, please read our recently published report Reimagining Latin America Delivery in a Post-COVID World, which highlights the relative attractiveness and talent-cost proposition of key Latin American locations to support global services delivery, based on our holistic and multi-faceted assessment across 12 critical parameters.

For more information on Latin America as a global service delivery location, please reach out us: contact us.

Is the Talent War Threatening the Success of Your GBS? | Webinar

April 5, 2022

ON-DEMAND WEBINAR

Is the Talent War Threatening the Success of your GBS?

Access the on-demand webinar, which was delivered live on April 5, 2022.

Global business services (GBS) organizations remained resilient in the face of the pandemic; however, they now must confront a global talent shortage, particularly in digital and high-value skills, to continue delivering business value and fulfill heightened expectations of the enterprise.

As GBS organizations now look to rethink talent strategies and expand their reach in 2022, what do leaders need to know – and do – to tackle the talent challenge?

Join this webinar as our experts explore: