What causes high attrition in business services? It’s not just a matter of training, according to Mike Salvino, group chief executive of Accenture Operations. It’s also about a lack of career paths. To grow the industry, he says, working in operations must be seen not simply as a job but as a rewarding career, one that delivers business outcomes for clients.
In an interview with Phil Fersht, founder of the leading outsourcing analyst firm HfS Research, Salvino emphasizes the importance of investing in talent and creating clear career paths to attract and keep the best people. Here is an excerpt.
(The full interview: appears on Horses for Sources, a widely read sourcing industry blog; the excerpt is posted with permission.)
HfS: Do you think there needs to be more focus on BPO as an actual profession as opposed to a job, and do you think that’s at the core of a lot of these change issues clients are tackling right now?
MIKE SALVINO: Absolutely. I keep using this “two mountain” theme because I do want to celebrate where we’ve gotten to today—to the top of one mountain.
But I believe the only way we’re going to cross the chasm and get to the top of that next mountain and achieve greater business outcomes is through investing in our people.
HfS research on the “talent gap” in outsourcing showed that as an industry, we’re not investing enough in our people. We’re not giving them the skills they need to generate insights and create business outcomes.
I saw four key points in your research:
First, and amazingly, two-thirds of all outsourcing buyers are struggling to achieve any business value or outcomes beyond cost reduction and efficiency.
Second, and maybe equally startling, barely one-third of buyers believe their governance teams can define business outcomes, or have the necessary analytical skills to drive innovation.
The third key point is that fewer than half of buyers train their outsourcing teams in continuous improvement, and only a quarter train their people in analytics.
The fourth point is key as well. It’s not just training that’s the problem—the lack of career paths for outsourcing managers is creating high attrition.
The first thing we need to do is invest in training our people. Our people need broader skill sets and deep industry and functional knowledge, not just processing skills.
They need to be fluent in key technologies that are driving services today, like analytics, cloud, social and mobility. We need to train them in global operations and in what I call “change management,” or the ability to get information into the hands of the right people. These are skills anyone entering business today would want to have.
The second thing is to inspire people to have a career in outsourcing and to understand their career path. They need to understand the timeline it takes to become an outsourcing professional and then how to do it.
So it could be you come out of graduate school; after two years, you’re a global operations and functional expert; and after five years, you know global operations and functions and you may know analytics. After seven years, you’re running teams; after 10 years, you’re running a business.
I think the need is very clear and people want to hear it, from buyers, providers and analysts, no matter where we are: The industry needs a career path. We’ve got to be clear about what I call “recognition and rewards,” and about the titles that people will have along the way, because those are very important to folks. We also have to be clear about their pay and how to achieve more pay when they perform.
Step three is creating an environment for learning. I’ve seen a lot of people take the next step in their career, and go from what I call “hero to zero.” In their old role, they were fantastic, just phenomenal, and then we stick them in the new role and all of a sudden, they’re not getting it done.
Now why is that? I think it is about creating the right learning environment and remembering that learning is 70:20:10.
Seventy percent comes from doing. We’ve got to create an environment where people can do, where people can learn, where people can apply the training they’ve been given. And they’re going to fail. It’s important to have the kind of environment where people are allowed to do that. It only takes one or two times where you nail it to remember what’s right, that it feels good, and you can move forward from there. So you’ve got to create an environment where people can “do.”
Twenty percent is coaching, and that’s where a lot of the senior folks in the industry come in. They need to coach their people, be transparent and be direct.
The last 10 percent is the training.
In addition to these three steps, there’s also an intangible. People call it “authentic leadership.” You have to make sure that the people are engaged and that they know you care about them both professionally and personally: You care about what they’re doing in their community and in their careers.
You’ve talked a lot about what needs to change within companies, to help them move toward more value and away from transactional engagements. But what do you think really can drive change within enterprises?
I think we will get people to change based on delivering business outcomes. Remember, business outcomes mean that you’re helping clients increase revenue or further decrease their cost—beyond the normal cost savings of outsourcing.
When we do that, people step up and take notice.
We want to get away from the FTE-based deals, we want to get away from the deals where they can’t scale up and scale down. Clients should pay for what we deliver—and that’s where this industry can go.
It’s been my experience that if we train our folks, if we produce an environment with our clients where people can learn, if we’re clear about their career paths and we are authentic leaders and care about them personally, we’ll achieve the business outcomes.
It’s like anything else: Once you have been successful at something, it just catapults and snowballs from there. There’s nothing like winning to create positive momentum.
Mike Salvino is the group chief executive of Accenture Operations. He is based in Charlotte, North Carolina.