Demands and attributes of the outsourcing workforce
Date: Friday , June 01, 2007
When three degrees of subcontracted separation from a client constitutes a meaningful customer relationship and 50 people doing data entry in a seventh floor flat in Kolkata represents a $100 million valuation in the minds of the promoters, all systems are moving full bore in the frenzied world of BPO and outsourcing. This momentum is a manifestation of many events as well as timing. Contributing factors range from the already well documented opening up of hitherto closed economies, corporate emphasis on cost reduction, corresponding process improvements, nationalism, rational and irrational exuberance as well as what in the end may be the most compelling factor, the global quest for high caliber talent.
Outsourcing connotes many images from the IPO millionaire to the disenfranchised workers who feel that ‘their’ jobs are being exported to the hapless tech support worker frantically trying to communicate with a frustrated American housewife trying to get the latest cake recipe downloaded from MarthaStewart.com. These are but a few of the many scenarios that repeat themselves multiple times a day, every day, of every week, of every month, you get it.
The core dilemma that providers and users of outsourcing services face is in fact the dearth of talent to meet the business world’s increasing appetite for world class third party services, such as customer care, telemarketing, analytics or traditional application maintenance or infrastructure management. This may seem implausible given the coverage of India, China, Eastern Europe, the Philippines and Latin America as limitless and burgeoning hubs for skilled workers to execute this litany of activity. The reality is that the education complex in these countries is simply not equipped to produce the caliber and volume of workers required to grow the BPO/ITO industry in a sustainable fashion.
Some of this is being offset by forward thinking companies such as State Street, who through their partnership with Zhejiang University in Hangzhou, China created a genuine global talent resourcing partnership way back in December 2001. IITs and the regional technical colleges in India are also doing their part and one can cite several examples of corporates partnering with and even investing in higher education in order to address this increasingly complex talent crunch.
The big challenge behind this talent crunch is the fact that outsourcing for cost has essentially become irrelevant. If service levels and deliverables do not meet customer or more importantly end user satisfaction, low cost falls to the bottom of the criteria in the question of whether to outsource or not. As State Street’s Joe Antonellis, the company’s Chief Information Officer insists, though cost is one of the advantages of his company’s program, it is not just about cost savings. The graduates are paid, he says, adding, “this is not a sweatshop”.
This matter of quality is particularly evident when businesses seek to outsource problems. These problems, with embedded homing devices, have a pattern of morphing into bigger problems and inevitably go back to the outsourcer’s doorstep. Lehman Brothers, Dell, JP Morgan Chase, Sprint/Nextel and others have all brought various processes back in house due to disappointing outsourcing experiences. That said, none of these companies have dismissed outsourcing out of hand but appear to have chalked these experiences into valuable lessons.
A confluence of time and circumstances has created an exceptionally robust hiring market for BPO/outsourcing workers at all levels of the organization. Historically, ‘offshore outsourcers’ had primarily sought to recruit front ends for their operating platforms, sales and business development executives. Even today, almost without exception, outsourcers are seeking revenue generators to help identify and close the next big deal. The following are just a handful of the key attributes for these individuals:
(1) a proven record of closing complex, multi point contact, big ticket deals, (2) a rolodex of relationships that can be monetized, (3) domain expertise in specific vertical industries such as financial services or healthcare and the corresponding operational knowledge of fundamental business processes that run these businesses, (4) superlative communication skills including well developed listening skills, and (5) global/multicultural affinity. These key competencies are static irrespective of the sales person’s country of origin or ethnicity. The best, most successful business development leaders possess them all.
As the outsourcing industry has matured, companies have positioned themselves as global resourcing or right shore providers and not one stop shop. With “India, China or pick your offshore destination” service providers spawning, there has been a dramatic increase in the need for program managers and project leaders as well as the rank and file workers to execute specific tasks. TCS, FirstSource, eTelecare and most other established outsourcers are hiring workers to fill these roles.
The following are a handful of the key attributes for these individuals: (1) prior experience or familiarity with (or lacking that, being a quick study in respect to) the specific processes and corresponding tasks such as claims processing, coding or customer service. These do not necessarily have to be industry specific and many individuals cross pollinate these skills across multiple industries, (2) being a team player. Most operations require significant coordination across sites and departments and workers need to be able to multitask and back each other in order to provide customers with the experience they seek (3) excellent organizational and prioritization skills along with good judgment. These workers are critical links in the delivery chain and if one link is weak or it breaks, the ripple effect for the customer can be fatal, (4) global/multicultural affinity, and (5) superlative communication skills including well developed listening skills. These key competencies are not quite as static as those for sales roles but are consistent irrespective of the delivery person’s country of origin or ethnicity. The best, and most successful delivery leaders possess them all. Individuals who exhibit these attributes can expect to be well rewarded by either their organization or the industry.
Compensation levels are at an all time high in the BPO/outsourcing industry. There is a rising tide and it is lifting all ships. Even companies that have historically been frugal, penny wise and pound foolish or even down right cheap have been forced to loosen their purse strings given current market dynamics. To this end, there is a double premium in today’s marketplace, (1) compensation that is structured to entice talent, and (2) compensation that is structured to retain talent. The worst investment that an organization can make is to open up the check book to attract an individual but ultimately, over time, not retain that individual long enough in order to achieve a reasonable return on their hiring investment. This is particularly true in the sales function where the cycle time of deals can only be a few months and sometimes extend to about a year.
Many would argue that this is only slightly less critical, if at all, in respect to delivery roles. As companies invest in advanced training and development, people continue to be the most valuable asset. People are the capital that this industry trades on. People represent both the intellectual property as well as the core processing engine of their respective businesses. In an industry that can be defined by the alignment of people, processes and technology, to lose good people is anathema.
The outsourcing industry at large is undergoing a significant amount of flux and change. Some of the prevailing attitudes and behaviors are reminiscent of the dotcom days of the late 1990s. Hopefully, we as an industry and as individuals can continue to look to the future but learn from the past. A new order is being created and it is a privilege to participate in this transformation. Now is a very good time to be a global services executive.
Shawn Banerji is a consultant at Russell Reynolds Associates. He can be contacted at email@example.com.