Thrive, Survive or Suffer the Consequences (Part 1)

Posted: 07/09/2012

(At the 8th Annual Shared Services Week in Sitges, near Barcelona, Spain, COLT Telecommunications’ Director of Shared Services, Kirk Wilkenson, hosted a seminar on "Creating a robust staffing strategy in a competitive climate". One month on, Kirk presents a report on the seminar, comprising an indispensable two-part guide to attracting and retaining the talent you need to keep your SSO flourishing.)

Part 1: Talent Acquisition

We had an excellent session in Sitges with a diverse group of established and new shared service center operators in the UK, Eastern Europe, and mainland Europe; staff sizes were ranging from under a hundred to over four hundred. The group was addressing the issue of creating a robust staffing strategy, especially in the competitive markets that most shared services exist in. I titled my introduction as "Thrive, Survive or Suffer the Consequences", meaning: manage the pipeline of talent to come in, as well as retaining the talent once you’ve hired them, or you can find yourself in serious trouble quite quickly.

At the beginning of the session I did a survey and we discovered that amongst the practitioners in the room we would need to hire close to eight hundred people in the coming year. We started our discussion around sourcing the talent, what were the issues we faced, and what were some of the possible solutions. We broke that first problem into three parts. First was the case where the talent exists in your market that you need to hire, but for some reason you are having some difficulties bringing them into your organisation. We wanted to look at what issues you need to address there. The second was when your shared service location may be in a place where you don’t have sufficient quantities of that talent, or it just doesn’t exist: what do you do then? Finally, a third part of that problem is overall speed; we all know most businesses are in a very dynamic environment where you must respond to changing needs in the services you offer and the projects you undertake, so is there anything you can do to speed up bringing in the talent?

Where the talent exists in your market, but you’re having trouble in attracting and hiring those people and getting them into your organisation

First we covered the basics you must address. You need to make sure that: your paying rates are competitive with the market; your overall positioning is right; and you’ve done the survey work to understand where you are.

The group agreed that pay was not the key differentiator, but you have to make sure that you are in the right band and positioned appropriately. The next major points all started to center around one theme, which is: for any prospective employee, why should he join your organisation? What is the USP of your firm versus others in the market place that are competing for talent? This is where we started to see that a lot of the things that would attract an employee are a lot of the things that would retain him.

One key thing we looked at was: is your brand in the marketplace? Do you have a strong brand, the type of company that is in the press, a reputation as a leading organisation that people want to work for? If not, you need to start to develop you brand locally: you need to build awareness, you need to make sure that people understand what your company is about, and why it may be advantageous to their career to join your firm. Perhaps you offer some kind of industry or technical experience that they can’t get anywhere else.

You need to make sure you can define your USP, your differentiator in the market. Sometimes it’s flexible work life balance; it’s education and training; it’s providing professional qualification fees; perhaps it’s just a different culture - a more relaxed and informal culture, or a more creative R&D-type culture. Again, you need to package all these elements and offer a compelling reason for an employee to join.

Some other things that we looked at were: making sure you have a clear career path; social activities, other benefits that you might offer that again might distinguish you from other employers. Part of your recruitment advantage might be the local city, and its attractiveness; you might be able to draw from a wider area, not just the local market.

In terms of identifying that talent, and getting it through your door, you should use whatever is appropriate in your market place. A lot of times it is advertising in the right papers or professional journals. If you do want to work with recruitment agencies, be sure to screen them; make sure they understand your business and your needs. In addition, there may be professional or technical associations that you should be present in to build your network and awareness in the market. A common best practice from all of the centers is the employee referral programme: generally in shared service hotspots in particular cities, if you hire one strong employee he’ll have a network of friends that he can refer just from being well connected in that market place. Another element is job fairs; we even started to look at the possibility of those internationally, again where language requirements are important.

Especially if you’re a technology orientated company, make sure your recruitment is aligned with a more technically advanced approach - digital messaging, internet job postings, again exploiting the intranet - using mobile communications to stay in touch with people, to alert people about opportunities, and to get a network out there working for you.

If you’re in a particular location and the talent and the skill sets you need just don’t seem to be available in that market

This is clearly a much more difficult problem to solve, but it’s a characteristic that many brown-field sites may experience. Also, in some cases you may have exploited a cost arbitrage in terms of labour, but you might perhaps have given up certain language or other skills when selecting the ‘lowest cost’ location.

One of the first questions to ask is: do you make or buy the talent you need? Especially for skills other than language - you can train and develop people over time to have the skills that you need. You can send them on Six Sigma courses, for process management; you can develop their technical skills, IT - particularly ERP - and fill those over time.

That is probably an element of what you need to do, but it certainly won’t solve the short-term problem. In addition you probably want to ‘buy’ in some talent. That’s an area where you must be careful because you need to manage your overall paying scales within the centre. You don’t want to get into a position where you are paying someone too much - out of line with the rest of the staff - for specific skills that you bring in. Nevertheless this is likely part of the answer.

As I mentioned earlier with regards to recruiting in general, if you look at international job fairs, international recruiting - especially when you need language skills combined with professional skills - a problem we see there is that you may be building in future attrition. You can convince people for a good pay package, in an attractive city, to maybe up their roots and move. You might keep them for two to three years - but the experience of our group is that over that time they get homesick, they get other offers, they want to go back. Of course, if they’re a truly mobile employee then they will be willing to move again for another job.

Another thing to look at is internal transfer within the organisation. Again, employees may want to do only one or two year secondments, but at least when they leave the SSC, you can retain that talent within the company overall. It also may be a good development opportunity for those employees.

Looking at more radical options - more difficult to implement and maybe longer-term - if you have a significant need and there is a significant gap in the quantity of resources you need for a particular skill set, be it language or otherwise, you might want to think about an additional location. Some companies have solved the problem by opening up a second location: another branch of the shared service organisation. It may be to cover certain activities – using a two-site strategy to address the skill requirements. For instance, back office, transactions, the R&D, and essentially all of the non-language requirement functions off-shore, and contact centres located where you can get native languages to suit your requirements.

In some cases looking at the long term of your shared services, you might want to migrate to a new location entirely, and to phase out the existing location. Again you probably want to look at that as a strategic option depending on the long term, where you are going with your shared service center, and the size of the skill gap: what is your position in the marketplace and whether you can get the skills that you need long-term for the growth and development of broader services in your centre. Is it a marginal change that you need to make or is it a significant gap?

Finally, another option is outsourcing. If there is a particular piece of work, of expertise that you can’t find, possibly you could outsource that activity – in a way, you are ‘renting’ a second location to supply the missing skills. Other ideas included expanding the base from which you recruit those skills, through teleworking. In addition, for some specific skill sets maybe in terms of tax or VAT expertise or particular software expertise, you might be able to temporarily fill that gap by convincing someone to commute, perhaps by offering three days in your location and two days working from home. This might provide the short-term solution while you ‘build’ the long-term skills by having local staff learn from the expert.

So there are some options to solve that problem, but above all I’d encourage everyone to take a long hard look at where you are taking your shared service center: are you in a location that provides all of the skills that you need? If not, you need to look at alternate locations. There are of course huge financial implications, so it needs to be a very carefully considered strategy.

The speed dimension: how can we speed up this whole talent acquisition process?

I have to admit that the group could not think of many ideas to shorten the cycle time; the best ideas we came up with were basically centered around doing better planning to minimise the impact of the cycle time. It takes anywhere from one to three months for a junior level position, and three to six for a senior level position; factor that into your planning, and try to get a grasp on your growth and your attrition rates.

If you’re going to have twenty per cent attrition, you can work backwards from average lead time, add the training and learning curve period and initiate prospective hiring. You’re essentially working towards a just-in-time recruitment, where the better you can forecast and predict staffing requirements, the more likely you are to get the talent just in time. In addition, you should look at cross training teams and employees to make sure that they can cover each other through peaks and troughs.

Another thing is to make sure that as you forecast your requirements, if you do have peaks in terms of staff attrition or gearing up for projects, you need to recognise those and make sure that you try and smooth that out so you have a steady process throughout the year. The other thing that comes into play is to try and maintain a bench (overstaff) if you can financially afford it. You keep some talent onboard that can fill in, or come in as new projects emerge.

Again, shortening the cycle time is probably going to be very difficult, especially in markets where there is a regulatory or legal requirement for a notice period. So it’s all to down to the planning; trying to line things up so that you don’t have vacant man-days in any position for any length of time.

(To read the concluding part of this article, click here.)

Posted: 07/09/2012

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