Tough Talking: Two Veterans of the Shared Services Industry Open Up (Part 3: Talent Management)
Some Mighty and Heartfelt Lessons from a Decade in the Saddle: "Things I Wish I’d Known 10 Years Ago"
Part III: Talent Management
When SSON asked its members for one word that represents their greatest opportunity and/or achievement, an overwhelming 68% provided the same answer: People. Hardly surprising, given that SSO leaders have been citing their people as their greatest asset, and talent management one of their most pressing priorities, for as long as anyone can remember. But what does that really mean for the individual working in the Shared Services and outsourcing industry today?
We chose a couple of very special SSON friends to answer this question. Both began their SSC careers in the height of the boom in the late 1990s, and collectively they have racked up over 25 years of frontline leadership experience across international brands including Kellogg’s, AstraZeneca, Lockheed Martin, Turner Broadcasting, PA Consulting Group and Ricoh Europe.
In this third of three articles, Ian Herbert, Deputy Director, Centre for Global Sourcing and Services at Loughborough University, puts the tough questions about how to get Talent Management under your belt to John Gregory, Global Finance Lead - Kellogg’s and Andrea Schaffell, VP EMEA Shared Services – Ricoh Europe.
Ian: The SSON survey suggests that ‘People’ are the big issue in business support centres and that resonates with the emphasis on talent management that we see in our research [Centre for Global Sourcing and Services at Loughborough University]. Now, at first sight that’s got to be something of a paradox as the raison d’etre of Shared Services centres tends to be about taking people out of the business, not spending money on developing them, so I think we have the basis for an interesting discussion! John, how do you attract and retain the right people? And keep them motivated?
John: My own thinking is changing a little bit on this at the moment. When I first came into Shared Services in the late 1990s, our European Financial SSC had been set up for about two years and it’s not too farfetched to say that the staffing situation was somewhat chaotic. At one point we had a 50% turnover rate, mainly because there were a lot of other centres setting up in Manchester and the wider North-West of England, and we were competing for talent across the region. Despite having good talent management processes in our front-line businesses, what we weren’t doing was effectively executing those people processes within our centre. To be honest, for a period of time we were fire-fighting in terms of recruitment and persuading staff to stay in their roles, and that made it difficult to take a more planned approach.
Ian: That’s not a unlike what I hear from other SSC/BPO hotspots…
John: That’s right. The North-West has settled down somewhat and, whilst new businesses continue to find the region attractive, there is now a huge pool of experienced people for us to draw on. But all that means that to get the best people to take our centre forward, rather than just coping with the here and now, we have to present an attractive proposition in terms of rewards, interesting work and career development.
Ian: So, what did Kellogg’s do to address the situation?
John: We put in a recruitment plan that actively engaged with local universities, to attract new graduates, many of who had excellent language skills, and also with the accountancy institutes in the UK – CIMA and the ICAE&W – to pull in experienced control people. With a combination of professionally experienced and fresh graduates we managed to stabilise things, but that only created a breathing space. For the longer term we had to move our thinking on.
I should also add that, whilst we were operating in a quite tight financial silo in the SSC, we were also fortunate to be in the same building as our UK and East European businesses, so there were places for ambitious people to go. That isn’t always the case in a Greenfield site, and I think that organisations should take that into account when making relocation decisions.
Ian: How did you manage talent once you had stabilised recruitment?
John: It was quite simple really. We just used the tools that we’d already got as a business and we just executed them very well. A key part of that was running constant one-to-one feedback and mentoring sessions, especially for the better people that we’d identified. But it shouldn’t be just another numbers driven exercise. We had to make sure that the process actually worked.
As an example of believing in what you are doing I’d highlight one of my key managers, who was probably producing the best talent across a number of teams in the SSC. I invited her to an urgent meeting one day, but she declined the request. I said, ‘This is really important, you need to come to this one’. And she said, ‘No, I’ve got a one-to-one with one of my employees and I will not cancel that meeting’.
Now that was a key message for me. Yes, I wanted her at my meeting, but I could also see that she, over above all the managers, was really making the time to sit down with employees and give them the space to talk about what they wanted to do with their careers in the SSC. Postponing such meetings might be expedient in the short term, but it can send out the wrong message because to an individual it’s their job and their career that is important to them.
Not only did we build a stable platform but we also started to develop a great pipeline of talent. That was brought home to me when other function heads started coming to me, asking whom the financial SSC might have that could transfer into their function. In the Finance SSC the external churn reduced from 50% to round about 5%, whilst our internal churn, which we see as a positive factor, went up to 15- 20%, as people started to integrate our talent into their operations. So we were doing something right.
Ian: That’s an interesting point about mobility between the SSC functions.
John: Sure, I think it’s an important one. It’s difficult to find a career path for people in a single-function SSC. Ultimately, people are going to want to leave and broaden their careers, and that’s certainly the case with the brightest talent. Even as you move into a more global SSC structure that still holds true, albeit you’ve got other functions alongside you. In the GBS model you can cross train, not just across different roles within finance, but also within supply chain, HR, IT.
Ian: What about interchange with the front-line businesses?
John: At Kellogg we are seeding the organisation with talent from the SSC, largely the retained finance organisation. That’s a great accolade for the FSSC but I think it’s right to ask whether this is the right talent for the interests of the overall organisation and I think I need to explain that carefully, because you might be thinking that sounds odd?
We mainly have a group of people that are experts in designing and running control systems. They keep us on track with the numbers, and keep us out of the auditors’ hands, but such skills are not only about knowledge – it also becomes a mind-set, a way of working that improves governance and mitigates risk. It’s hard for the same people to suddenly be the ones to think more creatively, to take risks and to drive value for the business.
This is a dilemma and it’s indicative of where we’re at in our development phase at the moment. Career paths into the business sound very logical but we are asking ourselves whether a GBS organisation is in fact the right recruiting ground for the talent that we need to really add value in the retained organisation.
Ian: I suppose a key message is that talent management needs to be a broader programme than restricting itself to the SSC, and should encompass the whole business.
John: My view is that some individuals will make the leap and do very well, having been grounded in the processes and systems that now operate across the whole company. But as we break the GBS away from the retained organisation, we really need to think about new talent attraction strategies for that retained organisation, and not rely solely on the back office, if you like, for recruiting roles that will ultimately transform into the front office. So a lot of thinking is going on, on that topic, within Kellogg at the moment.
To sum up, my message to anybody who’s new to this is to invest in your teams, invest in your employees…those are the people who will really help make it work for you.
Ian: Andrea, what would you add?
Andrea: I do agree with a lot of what John has shared with us. I would just add a couple of things: Some of my experience in the past is, yes, managing your talent is very important and what drives your employees is really important. What makes them happy when they come to work each day? But you can’t forget that everybody also wants career progression and we all know, in Shared Services, we’re a flat organisation and there’s not a way to keep going up and up and up within the organisation. I do believe in people moving back to the business and us being able to cycle people through.
The other thing to consider, and this is what I’ve done in the past, is to do away with the hierarchical titles that we have and figure out how you can improve remuneration for your staff, based on levels of experience in the jobs that they do.
So, a very simple example, and this was back in the early 2000s, was when we said, ‘we don’t have payroll clerks and accounts payable clerks and treasury clerks, we just have clerks’, for lack of a better term, and we had levels A, B, C and D. And we said if you could do one task that was the simplest, you’re level A; if you could do the next, more senior type activity, you’re a B; if you could do both interchangeably, and we could move you as we needed to, throughout the shared services, you’re a level C. That way, you’re able to work with people’s compensation because that makes them happy, if they’re able to do multiple activities and they can grow that way. So it’s helping people understand that moving up is not always as important as understanding what you can do laterally, and the value that you bring.
John: You’ve just sparked a thought. One of the things that we are grappling with now at Kellogg’s is that if in the future we do recruit for the retained organisation directly, rather than through the SSC, how do we get people engrained in the nuts and bolts of our processes, tools, and systems?
I was talking to our CFO the other day and his view is that if we go external for some of our more creative roles in the organisation, then they definitely have to have a stint in the Shared Services organisation, to get them grounded early on in their career. Now that is kind of music to my ears because you know I’ve been at the brunt of customer criticism from people in the retained organisation who haven’t been through the Shared Services journey, and I always find the feedback more balanced for those who have been in there, versus the as opposed to the ones who have never been in there. So that’s another aspect that we will be working through in the coming months.
Ian: I’m going to summarise the key learnings from this session:
- Siting SSCs in location hotspots can result in high attrition levels.
- Reach out to universities and professional bodies.
- Make time for people and the career development process.
- In flat hierarchies there’s a need to think carefully about job titles and help people to see that their experience and development is relevant even when progression is mostly lateral.
- Recruitment into the retained function from the FSSC may require wider skills development.
- The SSC is still a great training ground in the organisation’s systems and processes and helps future business partners to appreciate what the SSC is trying to do.
John Gregory, Global Business Services - Global Finance Lead,Kellogg’s
Having qualified as a Chartered Accountant, John has spent the majority of his working life with the Kellogg Company, holding a diversity of roles, including Recording and Reporting, Audit, Business Development, FP&A, Commercial Finance, and Tax. Latterly, John has become a professional in the Shared Services space. Having headed up the European Finance Shared Services Centre for a number of years, he is now the Global Finance Lead as the Company moved to a Global Business Services structure. John spends his time commuting between the US and the UK.
Ian Herbert, Deputy Director, Centre for Global Sourcing and Services Programme Director & Senior Lecturer in Accounting and Financial Management,Loughborough University
As Deputy Director for the Centre for Global sourcing and Services Ian is a regular contributor to international conferences and manages the CIMA-Loughborough Research Project on Shared Services. He has authored over 60 practitioner and academic articles.
His main research interests are the evolving role of the finance function and the impact of Shared Services on the organisation design and information strategy of the multi-divisional company.
Andrea Schaffell, VP EMEA Shared Services, Ricoh
Andrea has 30 years’ work experience, with the last 18 years dedicated to Shared Services and Outsourcing. Andrea has implemented and run captive Shared Services organisations as single function (finance) as well as multi-function (including HR, Finance, Health & Safety, Facilities, and Corporate Secretary) all on a global basis.
She joined Ricoh Europe in 2013 with responsibility for its Europe, Middle East and Africa Shared Services organisation (with multiple centres in Europe and South Africa). Prior to joining Ricoh, Andrea’s Shared Services experience included including AstraZeneca, Lockheed Martin, Turner Broadcasting and PA Consulting Group.