Crunching the Numbers: 5 Things You Need to Know About the US Shared Services Landscape
If the global Shared Services industry were an alien force with a mothership, there’s a pretty high chance you’d locate it sitting somewhere in the dusty Nevada desert, or high in the snow-topped mountains of Colorado, or possibly sunning itself floating down the Florida Everglades.
Any way you slice it, Uncle Sam has long been regarded as the Mecca of the shared services industry, with the very first SSC activity appearing there almost 3 decades ago. Hard to believe right? (especially if, like me, you belong to generation X and still consider the 1990s to be roughly 10 years ago, until you stop and think about it…). But when you take a closer look at the numbers, that perception isn’t stemming from ‘superpower hype’ or inflated PR, as you might think.
According to the latest research on the U.S. market from SSON’s data analytics centre, SSON Analytics – which focuses on the last 15 years of shared services activity – there is still a very steady stream of new centres launching every year in the world’s largest shared services centre (SSC) market.
This particular analyses focuses only on captive and hybrid centres across the 50 states, so it doesn’t take into account any of the onshore outsourcing relocation we’ve started to see so much of in the last few years. It’s focused more on the how many, where, what and when of everyday organizations’ SSCs from a broad cross section of industry verticals and company revenues.
The story it tells isn’t that surprising: Pretty much every company today has an onshore US SSC footprint.
Having spent 10 minutes drilling down into the interactive filters, whilst sipping on my hot cup of English Breakfast, I jotted down a few (hopefully noteworthy) observations which I thought I’d share…
1. The Global Financial Crisis’s role in propelling Shared Service growth
The timeline for open dates reads like a magazine. Call me a cynic but it’s tough to believe the disappearance of Lehmans didn’t play a significant part in the huge spikes of activity seen from 2009 onwards. That said, that growth has stayed strong and consistent ever since, with the biggest YOY growth of new U.S. centres opening between 2012-2013.
2. What the devil is wrong with Montana and Vermont?
Not “wrong” per se, but why aren’t they getting ANY SSC activity when the other 48 states are all getting a slice of the action? (Arguably TX, FL and CA are still hogging the vast majority of the limelight, but everyone else gets a look in to at least some degree. Even Alaska can say it’s home to a whopping 0.2% of US based SSCs…).
(Editor’s note: If you’re an SSC based in Montana or Vermont PLEASE contact us at email@example.com! It’s always possible our data analysts missed you… but they did look long and hard, so you’re hiding well!)
3. Why isn’t everyone rushing to Arizona to cash in on the graduate talent there?
It’s the fifth highest ranking state for graduate talent availability and yet still only accounts for 1.6% of the domestic Shared Service Centres population? That sounds like a skills opportunity just waiting to be leveraged. Surely it should be swarming with SSCs if sourcing Gen Z and millennial talent is a high priority? It also features right on the median for minimum salary costs by state (see page 8 of Dart’s analysis here). See the small bubble bang-smack in the middle of the graph? Next plane to Phoenix please…
4. Analytics is on the rise and heading for North Carolina
OK, the U.S. isn’t exactly awash with analytics activity overriding other more traditional functions. Finance and Accounting still quite predictably accounts for 37.5% of function-led SSC activity, and HR isn’t far behind at 29.8%. But what is interesting is that 16.7% of all the analytics that does exist is being serviced from North Carolina, with Michigan and NY both following closely behind. N.C. a hub for data scientists. Who would have thought…?
5. The Public Sector explosion
Healthcare, Higher Education and Government sectors: it’s like they all woke up at once and smelled the Shared Services coffee. Their contribution to the spike in growth of U.S. Shared Service Centres since 2010 is significant at 25%, but a brief drilldown of all the SSCs specific to these industries (page 3) reveals this really is a country wide phenomena… All but 7 states have seen public sector SSCs opening in the last 5 years. That’s a whole lot of public sector shared services growth almost everywhere (still no love for Vermont and Montana though!).
Access SSON Analytics’ full US shared services visual data report.