More Investment in Talent is Key to Achieve High Performance in Outsourcing

Both the business process outsourcing firms and the buyers can get the full potential of the business strategy if they will increase investment on developing their talent pool. This was the result of a survey made by HfS research study about the emergence of a phenomenon called “talent paradox.”

The report is 32 pages long, conducted among executives of 282 organizations, and I will try to squeeze in only the gist and the recommendations from HfS geared to provide the lessons learned that will be beneficial to the outsourcing industry in general.

According to HfS, there is a marked failure from both the outsourcing providers and buyers in realizing the importance of investing in the key drive of value creation – people – which has created a “talent paradox.”

What’s alarming is the neglect that’s supposed to be a priority “as outsourcing moves from the back office to the middle and front office, where value creation is paramount, and as buyers seek more sustainable business outcomes beyond merely cost reduction,” said HfS in the report sponsored by Accenture entitled “Is Good Enough Really Good Enough? The Great Talent Paradox in Outsourcing.”

HfS cited many benefits that both outsourcing provider firms and client organizations can derive out of a well-invested talent resources of both the service provider and the buyer, such as improved productivity, efficiency and access to critical data.

So what needs to be done to remedy the talent paradox? Here are the key recommendations given by the report –

Invest on programs that will enhance talent’s core business skills. Focus your investment on experts whose skills go beyond merely leaned in operations management, procurement, and service-level skills. Doing so will produce a good number of operations manager in-house and will allow the companies to invest on skills that improve their core business.

Access high-value strategic talent of service providers. For organizations who are keen in making the most out of the talent from service providers, it is high time the focus of your investment shift from operational capabilities to developing methodologies, analytics, and talent. And we are not only talking here of just anyone from the talent pool. These talent are the ones who are instrumental in creating value beyond lowering the costs. The learned buyers need to consider these capabilities parameter as gauge when evaluating a potential provider.

Redesign skills expectations for the existing team.  The job competency models used in looking for individuals managing service providers in the past must be revamped to focus on strategic skills available or possessed by candidates.

Establish shared ‘stretch’ goals. As well as the purpose to encourage skills development and usage, this solution will prevent outsourcing relationships from getting flat cold. Both enterprises and outsourcing providers must establish shared stretch goals together in reviewing goals, metrics, and objectives on a regular basis. If needed, solutions that need to be repositioned must be put in place to meet business goals.


“Talent Paradox of Outsourcing” Research Finds Lack of Investments in Talent Limiting High Performance in Outsourcing