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In the search of the best next available resource, human or not

With the work demand expressed for the "traditional" job openings in ITO, HRO, BPO or SSC, the question formulated by the industry stakeholders points to some concerns regarding the future availability of the specialized workforce, able to deliver in line with the industry needs.

2018-07-16 18:13:58

Estimates give us a number of plus 100 thousand specialists employed in the outsourcing and business services industry in Romania at this time and by 2020, this number is expected to double and even three fold (ABSL estimates), with the opening of new operation centers, in Bucharest but also in Tier 2 and 3 cities.

Employments have been recorded in all areas of activity, but mainly in the fields of telecommunications, financial services, audit and consulting, pharma, automotive, BPO services, software development, digital services and IT consulting. The growth trend of the number of employees was mainly based on the favorable macroeconomic climate and on the economic growth registered last year. This increase is also reflected in the unemployment rate, an indicator that has reached the minimum historical value in recent years, according to NSI.

Outsourcing is one of the sectors that have seen the highest increases in the number of employees in Romania last year, of over 10 per cent, according to CBRE's Business Services Destinations in Central Europe report. Over 450,000 employees in Central and Eastern Europe work in the outsourcing sector, which means that Romania has 20 per cent of them. Half of the outsourcing employees in Romania work in Bucharest, according to CBRE data.

With transformative technologies and the speed of digitalization, human resources must re-imagine long-held approaches to enable the business to adapt and thrive. One of the very real shifts that outsourced and shared services are undergoing worldwide is one of embracing a more value adding, knowledge-based service. This is driven, almost entirely, by the advancement of automation solutions into Shared Services' workplaces, thereby taking mundane, transactional work out of employees' hands and freeing them up to deliver more valuable work, for example by leveraging analytics or business insights to support better decision making.

People needed, companies in need

The main challenge facing the recruiting market this year is finding the right human resources in the context of a yet difficult labor market defined by the shortage of personnel, according to Adrian Stanciu, CEO at Smartree.The manager explains that the high rates of migration abroad, especially to western countries from those seeking better living standards has led in recent years to wages growth and constant fluctuations within companies. A greater demand than supply in the labor market means a real challenge for recruiters to persuade this new generation of candidates, oftentimes having multiple offers to choose from, to join their team. Once joined, it all comes down to retention and finding the perfect balance between wages and productivity, according to Smartree manager.

Adrian Stanciu, CEO at Smartree: "When searching for new talents we are looking at adaptability first"
"When searching for new talents we are looking at adaptability first. In this new market, people need to adapt to new strategies, new goals, new technologies and new flows in an ever changing environment. We are looking for skills that cannot be trained, so we need them to be already in place," Adrian Stanciu says.

In this context, digital transformation is a widely used term lately that will certainly impact each and every type of organization. Basically, this concept refers to automating manual actions and processes and would probably bring some significant changes to working flows similar to those experienced during the Industrial Revolution. Digital transformation is already present on all markets, including HR. For instance, Smartree is a technology based company offering a fully owned human resources management system that converts, automatizes and accelerates all HR processes within a company. "Our software solution, just like any other high level business technology, is raising a key issue for companies in terms of adaptability to change. In the same time, it helps companies to focus on their strategic needs, bringing them closer to their goals," Adrian Stanciu said. "The best way for preparing your organization for the next step of digital transformation is to challenge all processes within a company, search how these processes can be improved with technology, search for good reputed providers and implement those technologies with new flows of work, with new security procedures and new performance goals," the Smartree manager adds.

Digital is definitively a target and a reality to be. We see the need for digitalization every single day – and every moment we should continue to ask ourselves how can we make it even better. It is better to spend 1 week drafting a report and 1 day interpreting it or it should be the other way around? The future will be for the ones that will have all the data at a push of a button and that will use the time to understand and interpret the date in order to predict the future, according to Daniela Vercellino, HR Director at Societe Generale European Business Services, explaining: Romania still needs to understand what's at stake if we go digital. After we all have this common vision in which we invest our time for high value added activities, Romania will make true progresses. For Romania, this deep understanding will mean also the need to re-adjust the education curricula and to up-skill their entire staff. As one of the most well-known psychologist in child psychology used to say: "the principle goal of education should be creating men and women who are capable of doing new things, not simply repeating what other generations have done" (Jean Piaget)."

Daniela Vercellino, HR Director at Societe Generale European Business Services: "The future will be for the ones that will have all the data at a push of a button and that will use the time to understand and interpret the data in order to predict the future"

Manpower: Automation will change the labor market and skills landscape in Romania
Romania is one of few where automation will have a slight negative impact upon the size of the workforce in the next two years, a recent study of Manpower states. According to their data, 81 per cent of Romanian employers globally say their headcount will increase or remain flat in the next two years because of automation, in line with the 86 per cent employers globally providing the same answer to ManpowerGroup's latest research, Robots Need Not Apply: Human Solutions in the Skills Revolution. However, 17 per cent of Romanian employers believe that in the next two years automation will lead to a decrease in headcount, versus 10% globally, and 14% believe it will lead to an increase, versus 20 per cent globally. Consequently, in the near-term automation is likely to have a slight negative impact on the local market. Roles that are routine or add less value to customers are under greatest threat of automation.

Looking inside organizations, the impact varies by function. Only 5% of employers believe they will increase the number of their Administrative Office employees, as digitalization progresses, while 14% forecast decreases, while only 1% of employers anticipate increases in their Human Resources function, and 5% anticipate decreases. More than 1 in 3 employers (36%) believe their Manufacturing & Production workforce will increase as a result of automation, but 41% believe it will decrease, thus resulting in an overall negative impact of automation in the near-term. However, the IT function comes out on top, as organizations invest in digital skills, 11% of employees forecasting a growth in the size of these departments, and only 2% forecasting decrease.

As technology transforms organizations, skills needs are changing rapidly and companies are struggling to find the talent they need, so the value companies now place on human strengths is increasingly evident, according to ManpowerGroup's report.

More than 4 in 5 of Romanian companies surveyed say collaboration skills are their most valued soft skill, followed by communication, written and verbal, and problem solving, but finding talent with the right skills mix is a challenge: employers say organization (43 per cent), communication (42 per cent) and problem solving (40%) are also the hardest skills to find in candidates. There are some variations between functions in the ranking of the most valued and hardest to find skills. Thus, 93 per cent of IT employers who forecast an increase in headcount say communication is the skill they value most, and also the skill that is hardest to find among candidates.
The ManpowerGroup report finds that automation is good news for jobseekers, if they have the right skills, but will likely be challenging to people with ubiquitous or obsolete skills. Developing the best blend of technical skills and soft skills is the solution to the Skills Revolution for individuals and employers alike, ManpowerGroup says.

Manpower study: Romania is one of few where automation will have a slight negative impact upon the size of the workforce in the next two years

In 2018 the challenges concern the availability of talents in the context of a more and more dynamic market, offering opportunities for candidates and reinforcing somehow their willingness to change the job very rapidly. The perspective has been offered by Gabriela Andrei, Recruitment Manager at Societe Generale European Business Services. "In the same time, not only the availability becomes a challenge, but also the quality and the long-term orientations that impacts significantly the human resources management practices and policies, the way the companies are finding a balance between attracting and keeping talents in order to create business value, to grow and to resist on the market. It is a challenge and in the same time an opportunity for the Romanian market to develop and to enlarge the pool of candidates especially for the outsourcing sector that has a great potential in Romania. The companies that will decide to invest in human capital have the chance to take advantage of this potential, to reinforce their business and to grow and stabilize," Gabriela Andrei states.
According to Societe Generale EBS representative, the outsourcing companies are looking to find candidates that besides the required competencies and expertise could show an attitude oriented towards continuous improvement, efficiency, business value and in the same time, are very flexible to adopt each day new ways of working. In the outsourcing industry "change" is the main objective and the common and stable aspect with which people have to cope with daily. This is impacting their growth and the company's growth in the same time.

"The main topic addressed concerns the automation and the transformation of the business processes, having effects on the way people face these changes, develop new skills and understand that the focus should be on the added value tasks. In this context, the personal values and attitudes are essential, meaning that the coherence between these and the organizational values could become a differentiator that leads to growth and development or to a blocking point when it's lacking," Gabriela Andrei adds.

Gabriela Andrei, Recruitment Manager at Societe Generale European Business Services :"In the same time, not only the availability becomes a challenge, but also the quality and the long-term orientations that impacts significantly the human resources management practices and policies"
Programs ready for young professionals

The Association of Business Service Leaders in Romania (ABSL) announces thousands of positions available for young professionals with little to entry-level experience in the business services sector. Accounting, IT, Acquisitions, Marketing and Sales are just a few of the fields where the jobs are available.

At the moment, the sector has 120.000 positions available, with the industry having a potential of 300.000 long-term employees. Therefore, on a monthly basis, there are between 3.500 – 5.000 open positions in the outsourcing industry, depending on the period and market movement.

Member companies of ABSL offer this year a few thousand positions to young professionals looking for their first job. The main skill required of them is knowledge of a language with international circulation, as well as the potential identified by the employers, curiosity and their desire to learn.

"ABSL thus continues the approach of facilitating the access of young people who are at the beginning of their professional journey to the labour market from the business services sector and a career in the field, in the context that according to the National Statistics Institute, the unemployment rate among young professionals in Romania has reached 15.4 per cent in the second quarter of 2017, representing the highest level up to date. Investment in young students is essential for the durable and healthy development of the industry and society", according to Cosmin Pătlăgeanu, President of ABSL Romania.
The most desired skills by the employers are linguistics, especially strong knowledge of English and German (as well as Nordic languages, French, Italian, Polish and Hungarian), MS Office skills, adaptability and attention to detail. Regarding entry-level positions, depending on the field, employers sometimes request a minimum of 6 months' prior experience, as well as IT knowledge or skills in financial and business analysis, engineering, sales, payroll, fiscal legislation and project management skills.

Companies in this industry frequently offer long-term development programs which include trainings, certifications, international mobility, online training platforms, career counselling and interpersonal skills courses (communication, relationship, leadership).

ABSL estimates: "At the moment, the sector has 120.000 positions available, with the industry having a potential of 300.000 long-term employees"

Deloitte: Four in ten Romanian millennials want to work in corporations
More than four in ten (43.5 per cent) young Romanian university graduates want to work in a big corporation and only 17.3 per cent want to become entrepreneurs, according to Deloitte ‘First Steps into the Labour Market' 2018 report. The study describes the views on work, life and education of more than 5,700 students and recent graduates from leading universities in 14 countries across the region.

Only 15.6 per cent of Romanian millennials think that university graduates in the country are well prepared for professional work. However, 75 per cent of the Romanian students wish to continue their education to a post-graduate level, compared to 39 per cent across Central and Eastern Europe. When choosing their jobs, Romanian millennials value first and foremost the opportunity to develop and acquire new skills (59.7 per cent). An attractive salary is the second most important factor, selected by 10.4 per cent of the respondents.

Nearly half of young Romanians (46.8 per cent) wish primarily to become experts in their fields, while 35.6 per cent wish to hold managerial positions in the future. When it comes to salary, only 17.4 per cent of the respondents said they wanted to earn more than 3,500 lei and 8.1 per cent aim to earn more than 4,500 lei, most of whom are men planning to become managers. Women expect lower pay and are most likely to say that they want to earn up to 2,000 lei, whereas men most often selected 2,501-3,000 lei. When it comes to moving abroad, just a little over 50 per cent would move to another country for a job, slightly below the average across the region (56 per cent).

Cosmin Pătlăgeanu, President of ABSL Romania: Investment in young students is essential for the durable and healthy development of the industry and society"

Ready for the market risks

In Smartree's perspective, one can never be fully prepared to implement fast legislation changes, especially when you have in place multiple actions of this kind. You just deal with it as in the present case. On the other hand, there are some specific measures a company can take as an organization for overcoming the eventual difficulties, errors or data loss that may occur during this process. "You can limit the impact of all sort of changes on your business by having a solid business continuity plan and clear procedures for data back-up and recovery," Adrian Stanciu explains. According to him, given the difficult current context on the labor market, companies can play a more active role in developing a coherent and relevant education agenda matched to the market needs. When suitable, companies can invest in their own training programs or join local universities, various NGO's or the appropriate state institutions to develop reconversion programs or specific courses through which certain skills can be revealed.

According to Daniela Vercellino, HR Director at Societe Generale European Business Services, labor legislation changes in the past year were quite a lot and many of them confusing. "To cope with all this challenges we invested a lot of effort in: (1) understanding the context; (2) seek solutions to reduce administrative workload. Our advice would be to have a strong legal consultancy accompanied with good communication team. In this way, we have managed to respond quickly and re-adjust our strategy to deliver what our stakeholders are expecting from us. But, if I would need to underlie one strong point – that would be communication!" Daniela Vercellino says, adding: II think we should keep speaking about our visions and we should share the benefits. Of course, maybe preaching is not always the answer, this is why some of the players (quite a lot of players actually) have made their own development programs within the company; and while 10-20 years ago these programs were targeting mainly soft skills area, today we can all be proud of having developed, internally, real knowledge academies. Another thing that Romania is still very far away, is a real and fruitful collaboration between private and public sector in the education arena.

In this matter, Societe Generale EBS is constantly looking for associating with Universities, with ONG's and other players on the market that are supporting education. "Also, we are investing in education by being partners of Academy+Plus, a tuition free coding school and by making our own Java Academy available for our employees but also for people outside our service center," Daniela Vercellino concludes.

SAP's ten prediction for HR in 2018

The beginning of each year comes with the leaders' prediction in different interest fields. When it comes to human capital management (HCM), most predictions tend to be variations of the same things, according to Steven T. Hunt, Human Capital Management Research, SAP. The following are his "top ten" predictions about how these will change in 2018.

Workforce agility will become the most critical concept in HCM. It is often said that the only constant is change. It is now more accurate to say the only constant is an ever-accelerating rate of change. The only way companies can survive in the modern economy is to excel at adapting to changing markets, technologies, and business landscapes. This requires tapping into people's innate capacity for learning, growth, and innovation.

Staffing will reach new levels of complexity. For over 100 years, most people interpreted "staffing" to mean hiring employees to work onsite in full-time or part-time roles. This concept is changing due to shifting skill shortages, global labor pools, and a massive rise in virtual work and contract employment. Staffing no longer means hiring employees. It means finding the right mix of skills and matching them to business demands by tapping into an increasingly global, virtual, and contingent labor force. Companies will be forced to redefine workforce planning, recruiting, staffing, and management to work in this much more complex labor market.

The experience of work will greatly improve.

Technology has made a lot of things about our lives much easier and more enjoyable. Finding our way around a city, buying products, staying in touch with our friends, watching movies, and hundreds of other life experiences have been transformed by social and mobile technologies leveraging artificially intelligent interfaces and machine learning algorithms. We will see exponential growth in the use of artificial intelligence, chatbots, intelligent services, machine learning, mobile solutions, and social platforms to make work more enjoyable, simple, and engaging.

Performance management will become a solution, not a problem.

People have hated performance management for decades. This is changing thanks to companies rethinking performance management to focus on ongoing coaching and team based decision making. We will soon reach a tipping point where the dreaded annual review will be nothing more than a painful memory, having been replaced by mobile technology enabled continuous performance management solutions that employees and managers both appreciate and like.

Re-conceptualizing compensation.

Companies spend billions of dollars each year on merit increases, bonuses, and other form of compensation. Yet few of them can confidently answer this question: "What is the return on investment you get from the money spent on compensation in terms of increased employee engagement, productivity, and retention?" Companies can tell down to the last penny how much is spent on compensation, but they cannot tell if that money is being spent wisely. The future of compensation will involve more continuous processes where employees receive different types of rewards throughout the year from different sources. And analytics will be used to link investments in compensation to returns in workforce productivity.

Intolerance of inequity.

For too long, companies have viewed inequity as a problem, but not a problem worth solving. With the workforce becoming increasingly diverse, particularly the rise of women who now represent 50 percent or more of the employees in many fields, society is reaching a long-awaited tipping point where inequitable treatment based on non-job relevant factors such as gender, ethnicity, and age is being openly acknowledged and addressed. Smart companies will proactively redesign their talent management practices to ensure bias is identified and addressed before it happens.

The rise of well-being tech. People are not meant to live in an "always on" 24-7 world. The pace of work is literally burning people out. Companies need employees to be highly engaged, creative, and service oriented. But this is impossible to do if employees are tired, stressed, and distracted. In the coming year, companies will continue to make more well-being tools available to their employees. With the explosion of well-being technology at the consumer level, such as smartwatches and fitness technology, many employers will be looking to bring these tools into the workplace. However, successful organizations will be those who make such technologies accessible, enjoyable, and cultural for their employees.

Org charts will begin to phase out.

There is a lot of talk about updating businesses for the digital age, and yet companies continue to manage work forces using a tool that has changed little since the Roman Empire: the hierarchical organization chart ("org chart"). Relying on org charts to guide workforce management decisions is both foolish and dangerous in a digitalized world. And while 2018 will not be "the year the org chart died," some progressive organizations will begin to phase out traditional org charts for more modern, digital approaches.

Companies will ditch all-or-nothing retirement.

2018 will bring about a major shift in workplace dynamics with regards to older generations. Today, individuals are living longer and thus, working longer – past 60, 70, and even 80. Forward-thinking organizations realize the need to keep this skilled talent in their organization, particularly as many industries face increasing skills shortages. However, this transition will also force companies to rethink jobs; for example, many positions that used to be full time will become part time. In the coming year, organizations will begin to move away from the traditional, all-or-nothing view of retirement.

Growth in HR cybersecurity threats.

Ransom ware made its main stage debut in 2017 with the WannaCry and NotPetya attacks. In 2018, ransom ware threats will continue to proliferate. HR systems have not historically been a major target of cyber criminals. Unfortunately, this will change. There will be a growing number of attacks against human resources departments, with cyber-criminals posing as potential applicants in the hopes of infecting the larger organization.

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