It is time to party like it’s 2019 if we’re going to save the services industry

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Anyone close to the coal-face of IT and business process services engagements knows it, but few are admitting it:  staff attrition is out of control and threatening to destroy the whole fabric of outsourcing if service providers fail to get ahead of it.

And it’s abundantly clear what the biggest catalyst behind attrition is:  remote working, especially in the services providers whose staff are predominantly based in India.  Throw in a spike in demand for people with tech / business services experience and this is the impact:

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Four reasons why we need services staff back in the office

1. Most developing staff struggle to learn to be innovative or creative stuck at home. Most staff will only focus on doing the basics of their job when they have no people around them to learn from, share ideas, test theories, etc.  Let’s be honest, if people get their basic deliverables done by lunchtime, will they really make time to learn new things, call their colleagues to share ideas, etc when they have so many other distractions to absorb their time?  If they are in an office, they will find other work-related things to do, they will talk to their teammates, ask questions of their managers and become far more productive.  These staff will quickly develop themselves and warrant ongoing salary increases.

2. Many experienced staff can deliver their current jobs from home, but run the risk of their activities being automated away.  There are very impressive platforms to manage call center work, basic IT support, accounting tasks, insurance claims, etc in remote environments, and we can be secure knowing these remote working platforms will keep the wheels on service delivery if/when future pandemics – or other crises – force us back into Zoom-land.  However, if repeatable tasks are run at scale remotely, pressure to keep costs to a minimum will drive ambitious providers to invest in more sophisticated automation that can keep staff numbers low and combat wage inflation.  Employees who choose to work remotely have to keep training themselves to keep improving their value, otherwise they may find their jobs gradually disappearing.  Net-net, work tasks are being automated regardless of whether or not staff are present in the office, however, people who do predictable, rules-based roles remotely are more prone to automation than those who are office-based and developing their creative/innovative skills through team building and collaboration.

3. Most managers pushing for “hybrid” work environments were hybrid workers pre-pandemic in any case.  How many people have told you they “intend to go into the office 1-2 days a week”?  Yes, am sure many have and you may be intending the same for yourself.  But these folks pre-2020 spent a good deal of their time on planes, visiting clients, attending conferences, visiting other global offices in any case.  So they are really just looking to continue the hybrid office/remote lifestyle they were accustomed to in the past.  The only difference now is there is less reason to travel, and travel costs are a lot higher than before.  This will level out as the pandemic fades and the world returns to something similar to 2019.  The main difference today is that we’ve become more efficient with our time and take much better advantage of video calls and a better-disciplined home/work life.  We also focus a lot more on our mental health and a better work/life balance these days, which is a good thing for most of us who are becoming smarter and more creative, with a healthier appetite to develop our skills with less fear of change.

4. Work cultures are suffering in today’s remote-confusion, which has been a major factor driving up attrition rates.  When your employment becomes servicing a brand from a corporate issue laptop with little interaction with your colleagues, you lose much of the emotional ties you may have had for your organization.  So why not jump for another faceless employer offering more money, longer holidays, and a promise of “learning new things”?  Service provider leaders need to accept that they will struggle to retain many remote-based employees for long, as they simply cannot create a culture that drives loyalty and long-term commitment.  They have little choice but to get these folks back to the physical workplace, or plan to replace them with staff willing to work in-office.

The Bottom-line:  Service providers with armies of developing people must bite the bullet and recreate dynamic work environments

The harsh reality is this remote-working culture simply is not working for most service providers.  The numbers do not lie (and may actually be even more severe than reported).  Service provider leaders worry that forcing staff back to the office will exacerbate their situation even further – and they may be right in the short-term.  However, in the medium-long term, they cannot scale people and execution to satisfy the rampant client demand in today’s complex environment (as we discussed recently here).  Smart service providers are biting the bullet and pushing hard to bring back their physical work cultures, as they already realize they are playing a dangerous zero-sum game trying to deliver critical services to huge global customers when a third of their people aren’t sticking around to keep the very fabric of their service delivery ticking along.  They have to get the balance between adding freshers, expanding into Tier 2 and Tier 3 cities, and investing in keeping the talent they need to retain. People, ultimately, are not a commodity…

Posted in : Business Process Outsourcing (BPO), IT Outsourcing / IT Services, Talent and Workforce

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  1. What was 1 in 8, is probably 1 in 3 by now? Surely, this cannot operate like this, as it continues to slide further to reach 1 in 2???

    But this, “Service providers with armies of developing people must bite the bullet and recreate dynamic work environments”, this boat sailed away a long time ago. It was perhaps more of a collective spirit of the galley slaves model, surely dynamic but not in the way one would imagine :).

    The current crop of services firms are paying for their short-sighted approach to workers in the times past. But that is also a reflection of our broader world of business and in some parts of the world, of society itself. That people are not a commodity but have been turned into one.

    And right now the commodity is in high demand. Even average or below average commodity!?!