BPO and ITO service providers are now spoiled for choices when it comes to their delivery options. From a traditional office setup, to full-on remote and a wealth of hybrid models, companies face more diversity than ever when deciding how to deliver their services.
But the freedom of choice comes with its burdens. Though business leaders in the outsourcing world understand the relevance of their delivery decisions, they have yet to grasp the impact those decisions will have in other areas.
“Delivery model is a new vector that has been introduced. It has still not gotten into every decision making framework of organizations. It has probably gone into recruitment, job postings, but there are many places where it’s going to have an impact,” said Sakshi Garg, VP at Everest Group, in an interview with NSAM. “We’re still at the tip of the iceberg of understanding how this will have an impact.”
During a panel in Nexus 2022, Sakshi recommended that companies should start aligning their strategies for recruitment and delivery. Talent quality and availability is now the top priority for outsourcers hunting for locations, she and a host of other experts pointed out during the panel. Other factors, such as facilities, though still relevant, have fallen down the ladder.
Nevertheless, she added, most business leadership is planning separately for both strategies, without considering how the decisions made for one will bleed into the other. Planning for an entirely remote model, for example, will expand considerably the size of the talent pool available, while hybrid will bring new dynamics to team management.
“Companies have not been able to clearly articulate their return to office plans at a function level, at a department level, at a team level”—Sakshi Garg, VP at Everest Group
For now, culture within outsourcing firms has yet to make that connection. Though it’s making its way slowly, the language isn’t there yet.
“Traditionally, HR and business do not speak this language,” explained Sakshi. “LinkedIn’s job posting system, I think, introduced remote as a hiring option only six or eight months ago, because nobody is used to thinking like that.”
“Companies have not been able to clearly articulate their return to office plans at a function level, at a department level, at a team level. And until you have that clarity, it is harder to go to that next level and align your HR and recruitment strategies with those delivery model strategies,” she added.
Even though BPO/ITO leadership is starting to understand the issue, more work might need to be done. A score of new information has to be taken into account when evaluating workforce and delivery strategies under the shadow of model diversity: from driving distances and Internet speed to public transport options and infrastructure quality, topics that few (if any) HR agents are familiar with.
“Those kinds of analytics haven’t gotten to the workforce planning models, and I think that’s the next evolution of how workforce planning needs to be done […] You will need to ask for market data. I don’t think that HR is typically looking for this kind of analysis,” commented Sakshi.
How Wide Is Your Fishing Net?
One of the main changes that came with the diversification of delivery strategies is that it opened up the possibilities for recruitment. Before, with a traditional office setup, companies were limited in the size of the geographic areas they could use as hunting grounds for talent. Now, depending on their delivery model of choice, that area can be expanded many-fold.
A study done by Everest Group in the Manilla –capital city of the Philippines– showed, for example, that the talent pool available for recruitment grows sixfold if a remote delivery model is used, this compared to a traditional office setup. The recruitment area also grows, covering a radius of up to a 100-minute driving distance from the city.
“If you’re hiring for, let’s say, call center employees and you want them to be in the office, you have to look at a certain radius. If you’re hiring for IT and your strategy is that people can be hybrid, then you’re looking at a wider pool,” Sakshi pointed out.
These are the sort of factors that BPOs/ITOs will need to take into account when building their workforce and delivery strategies, she underlined.
Is There Commitment?
The experimenting phase is over when it comes to delivery models, assured Sakshi. Even though companies are still dipping their toes into the water, especially when it comes to hybrid, they’re for the most part sure about what they’re looking for.
Not everything is set in stone, though. Given that flexibility is now an option for both employers and employees, change remains on the table.
“People aren’t experimenting; they know. They may be hesitant to completely roll out,” she said. “What they’re doing now is not going to last forever; it’s a one year plan, max, an 18-month plan, and they’re going to revisit and reassess what’s the best delivery model for their organization under the circumstances that will come in the future.”
A main driver for changing delivery models might be talent itself. If companies are having trouble acquiring or retaining it, they could consider taking a sharp turn.
Many companies seem to be betting on hybrid, pointed out Sakshi, but the variety within hybrid itself brings with it a new wealth of choices in relation to talent acquisition, compensations, equipment and team management. Choices that will have to be carefully thought out, implemented and evaluated.