breaking into the strategic orbit of the global enterprise: part 2 · breaking into the strategic...

Breaking into the strategic orbit of the global enterprise: Part 2

A roadmap for meeting the digital talent imperative in India’s global in-house centers

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Foreword

Global in-house centers (GICs) in India have arrived at an extraordinary crossroads. One path leads to achieving new milestones in their journey toward becoming strategic growth partners for their parent enterprises. The other path likely leads to stagnation or even decline in their strategic importance and relevance. The question is: What will determine the path that GICs ultimately take? Success will hinge on their ability to unlock the value embodied in their digital talent.

To complete their journey toward becoming truly strategic partners, GICs will need to attract, develop and retain the talent required to match the digital demands of the business. This is a difficult imperative to meet, given the stiffening competition and rapidly changing employee expectations characterizing the current business environment.

To master the digital talent imperative, GICs’ leaders will need to undertake transformative measures rather than initiate incremental fixes. They will have to create a well-thought-out plan to upskill their workforce, not only by rethinking how work is delivered and by whom, but also by attracting and sourcing new talent. In addition, they must develop new digital career paths and roles for employees, define “what’s in it” for workers and promote that value proposition at every interaction with prospective and current talent. Only then can they attract the best digital talent and keep these valued employees on board.

Hard work? Yes—but the most progressive GICs will roll up their sleeves and commit to getting the job done. In particular, their HR departments will have to play a central role in driving the necessary transformation. For instance, HR professionals will need to stretch beyond this function’s traditional boundaries and forge new partnerships with leaders across the organization. They will also have to excel at “consumerizing” employee experiences at every “moment that matters” in workers’ interactions with the company. And they will need to develop a specific set of capabilities and personal attributes in leaders throughout their enterprise.

While GICs have made impressive strides in their journey toward becoming strategic partners for their parent organizations, they can’t afford to ignore the digital talent imperative. Those that take action now to meet it will be best positioned to help their parent companies achieve unprecedented growth. And, at Accenture, we are committed to supporting GICs in this effort.

Before signing off, we wish to thank NASSCOM for facilitating a highly fruitful discussion with senior executives of GICs. We are also very thankful to the senior leaders from GICs in India who took time to share with us their valuable perspectives on their talent challenges and opportunities now and in the future.

Kala Venkatesh, Managing Director, Talent & Organization Practice, Accenture Strategy

Raghav Narsalay Managing Director, Accenture Institute for High Performance

Avnish Sabharwal Managing Director, Growth and Strategy, Open Innovation & Deal Origination, Accenture in India

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Executive SummaryGlobal in-house centers (GICs) in India are striving to become strategic partners to their parent organizations—evolving from “cost savers” into “growth enablers” and taking on global leadership roles for their home corporations.

Yet as their parent organizations strive to excel in the digital era, GICs will be expected to deliver new forms of value, including helping their home enterprises unlock the true potential of digital technologies in the future. To do so, GICs will need to swiftly build workforces embodying strong digital skills.

• HR and business leaders at odds

GICs’ HR and business leaders are at odds over the talent challenges facing their companies (including workforce disengagement), the forces behind those challenges and the measures required to surmount them. This misalignment may stem from the fact that both sets of leaders interact with employees in different ways. Business leaders’ interactions with their direct reports are often work-related, enabling them to better understand employees’ expectations regarding matters such as the nature of their work and their career opportunities. Meanwhile, HR leaders—under increasing pressure to recruit, develop and retain talent more efficiently and effectively—tend to interact with employees mainly to handle routine performance management and other HR-related issues. Thus, they may not see early signs of brewing discontent in the workforce.

• A leadership deficit

Both employers and employees in our study expressed lack of confidence in their organizations’ ability to lead in a digital world. Perhaps these companies have not developed the right kinds of leaders quickly enough to support their rapid growth. Indeed, many GICs have grown so fast that individuals with relatively little leadership experience are quickly promoted into the managerial ranks. Often, these young managers have not yet acquired the kinds of experiences (such as working on cross-functional teams) needed to build people management capabilities.

• Shortfalls in funding and technology support

Insufficient funding and technology support emerged in our research findings as the biggest internal challenges limiting GICs ability to meet the digital talent imperative. Possible explanations for such shortfalls include lack of focus and limited understanding of talent issues on the part of leaders making funding and technology decisions.

To help their organizations overcome these three barriers, GICs’ HR functions will need to transform themselves, by taking three steps:

But all too many are struggling to meet this imperative—and Accenture launched an extensive research study to uncover the reasons. Our findings suggest that GICs face three challenges: a talent market that lacks “digital depth,” difficulty attracting and retaining digital talent and a mismatch between employee expectations and engagement levels.

Of course, these difficulties are not new, and GICs are already familiar with potential solutions. But our research uncovered several hurdles that are making these talent problems more daunting than ever:

To further tighten their bonds with their parent organizations and provide new forms of value required in the digital age, GICS will have to put digital talent management at the top of their strategic agenda. Rethinking how they engage and empower their workforces, along with how they structure and deploy their HR organization, will prove critical.

• Stretch beyond traditional HR boundaries

HR must become more than just a department or function—and transform itself into a distinctive capability embedded throughout the organization. Its purpose will need to center on providing experiences that keep employees engaged and productive. To fulfill this role, HR will need to stretch beyond its traditional boundaries and integrate itself across the organization—partnering with managers and employees in areas often seen as irrelevant to HR, such as finance or IT.

• “Consumerize” the employee experience

To attract and retain top digital talent, HR must take a customer-oriented approach to developing and delivering consistently high-quality services to employees at every point in the employment lifecycle—from applying for a job to building new skills to defining a career path. Extensive use of digital technologies and platforms can help HR “consumerize” (tailor and personalize) employees’ every experience with the organization. Result: positive impressions that help GICs recruit and strengthen the best digital talent available on the market—and keep it on board.

• Build strong digital leaders

To succeed in the digital age, GICs need to build digitally-savvy leaders at every level and in every corner of the organization. Such leaders will have to demonstrate specific skills and attributes—such as seeing value in sharply different viewpoints, feeling comfortable with uncertainty and (like all leaders) stoking a passion for their work. HR must drive development efforts to help young leaders build these essential capabilities and personal qualities.

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GICs in India: Toward a strategic digital partnership Talent has played a vital role in driving growth of Indian global in-house centers (GICs) over the past decade. Consider: GICs saw their revenue jump by a 17 percent compound annual growth rate (CAGR) and their workforces expand at a CAGR of 14 percent during 2003-2015. (See Figures 1a and 1b.) Total GIC revenue for FY2015 stood at US$19.4 billion, which accounted for 1 percent of India’s total gross domestic product (GDP). In FY2014, total GIC revenue equaled 7 percent of India’s total value-of-service exports in that same year. Today, India is home to more than a thousand GICs, and 14 percent of them employ greater than a thousand people.

Over the last two decades, Indian GICs have traveled an impressive journey. Specifically, they have strengthened their ability to bond with different parts of their parent organizations. As a result, they have advanced from being cost savers to being growth enablers for their home companies. They have taken on more decision-making authority and new roles in the process, have begun providing expertise to their global enterprises in multiple areas (IT, finance, procurement, after-sales solutions) and have become global centers of excellence. (See Figure 2 and Figure 3.) The 2014 Accenture report “Breaking into the strategic orbit of the global enterprise: Action agenda for global in-house centers in India” illuminated this journey in detail. (See the appendix: About our research.) The report concluded that, to seize the new opportunities presented by their evolutionary path, GICs had to excel in six business areas. One such area centered on leadership and talent, which included helping leaders and employees become capable and familiar with working in a digital environment.

Figure 1a: GIC revenue growth (billion US$) GIC revenue has grown 17% since 2003

Source: NASSCOM, “GICs in India: Getting Ready for the Digital Wave”

Figure 1b: GIC employees (1,000s) GICs employ 14% more people than in 2003

Our most recent study indicates that mastering this imperative will be crucial for GICs seeking to deepen their relationship with their global enterprise even further. Their parent companies—like businesses everywhere—are striving to become digital. To support them in this this goal, GICs will need to swiftly build strong digital capabilities that further boost their organizational intelligence and that enable them to deliver new forms of value to their home enterprise. By doing so, GICs will also fuel their own growth ambitions. Many GICs already seem aware of this imperative: 64 percent of survey respondents claimed to be hiring for new and specialized digital skills, while just 36 said they still focus their hiring on traditional IT skills.

0.9 4.4 1.1

4.9 1.1

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0

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10

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25

FY2003 FY2015IT BPM ER&D/SPD*

3.0

19.4

CAGR 17%

150

745

0

200

400

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800

FY2003 FY2015

CAGR 14%

Talent has played a pivotal role in driving Indian GICs’ growth over the past decade. But to help their parent organizations excel in the digital age, GICs will need to build and sustain a digitally savvy workforce. Transforming their HR functions constitutes an essential first step to meeting the digital talent imperative.

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What’s more, majority of the GIC executives we spoke with concurred that the need for new and specialized digital skills will only grow. One told us, “Skills such as cloud, analytics and big data analysis will be in demand in the near future.” Another anticipated “more focus on analytical and communication skills over the coming years.” Such leaders’ points are well taken, given that a confluence of forces is intensifying demand for digital talent at GICs. For one thing, customers across industries—in both the business-to-business (B2B) and business-to-consumer (B2C) spaces—expect advanced technology support from all organizations they do business with.

The question then arises: What do we really mean by “digital talent”? What kinds of skills and personal attributes does this talent need to embody? While skills and qualities required in this digital age vary across industries and roles, there are some commonalities. For instance, many employees will need to be comfortable working with the latest technology and intelligent machines (computers and applications with embedded artificial intelligence, or AI). As more basic tasks are automated by digital technologies, workers will have more time to take on higher-value responsibilities that require skills in

areas like data collection, data analysis and problem-solving. Foundational skills will also be in high demand, including communication, negotiation and business acumen. Finally, the digital age has given rise to new jobs that have their own specialized skill sets, such as big data, machine learning, UI/UX and analytics.

To help their home companies excel in the digital age, GICs need to expand the way they think about sourcing and developing multiple forms of digital talent. In particular, GICs will need to build advanced analytics and data mining capabilities or bring these skills into their organization to help their parent companies make data-driven business decisions. But technological change will only accelerate in the near future, putting even more pressure on GICs to find and keep talent that possesses these specialized skills. The good news is that younger employees are far more digitally savvy than many of their elders. For instance, they effortlessly use social media day in day out. As more and more young employees join the labor force, technological change will happen more easily and quickly—if GICs can keep these individuals engaged and productive.

Figure 2: Over the last two decades, GICs have strengthened their capacity to bond with various parts of their global enterprises Figure 3: India’s GIC evolution

GICs are now powerful partners in innovation and domain expertise for their global enterprises—with even more sophisticated roles lying ahead


Past Present Future

•  Work reviewed and directed by HQs

•  Primarily staff augmentation •  No vendor engagement

•  Full-cycle service delivery responsibility

•  Focus on developing process frameworks and incremental innovation

•  Help drive digital agenda for parent

•  Focus on firm’s realignment with HQ

•  Run global functions or BUs •  Run local or offshore GICs

under common leadership •  Participate in strategy

discussions •  Vendor engagements to

manage internal bandwidth •  Focus on transition from

delivery to business center

•  Delivery efficiency •  Cost arbitrage

•  Innovation •  Domain expertise

•  Revenue center •  Value chain enhancement


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GICs’ digital talent challengesOur research suggests that before they can meet the digital talent imperative, GICs in India must surmount a number of challenges. These include lack of “digital depth” in the talent market, difficulty attracting and retaining digital talent and a mismatch between employee expectations and engagement levels.

While India has plenty of workers with technical knowledge, there is a widening gap between skills available in the labor market and the skills GICs require to master the digital talent imperative. The reason: GICs today need people with not only digital prowess but also strong skills in strategic and creative thinking, collaboration and communication. That’s because a company can get maximum value from digital skills only if the people who possess them know how to use data-based insights to solve real business problems, including driving innovation.

Finding people who excel on all these fronts is no small feat. In fact, 72 percent of the GIC executives in our study said they are only moderately satisfied with new job applicants’ qualifications. (See Figure 4.) While identified shortcomings vary slightly across industries, lack of digital and technical expertise, leadership skills and “soft” skills such as team-building and communication, emerged as the biggest concerns among respondents. (See Figure 5.) Because of these shortcomings, GICs often have to invest heavily in training new recruits to take on and excel in their job responsibilities. Indeed, almost half of the respondents said their company commits a high level of investment to training for recent hires. (See Figure 6.)

A talent market that lacks “digital depth” Figure 4: Level of satisfaction with new job applicants Many GIC executives are only moderately satisfied with candidates’ qualifications

Figure 5: Shift towards new-age digital and specialized skills More than 60 percent of survey respondents claimed to be hiring for new and specialized digital skills

Source: Accenture GIC Survey 2015

15%

72%

12%

2%

High level of satisfaction

Moderate level of satisfaction

Low Level of satisfaction

Not satisfied at all

Type of skills Aggregate BFSI IT Telecom Healthcare Others

Traditional IT skills 36% 33% 39% 43% 0% 43%

New digital skills

(analytics, mobility, social) 38% 45% 39% 43% 25% 21%

Specialized skills 26% 22% 22% 14% 75% 36%

In the face of stiffening competition and rapidly shifting employee expectations, GICs have found it harder than ever to attract and retain needed digital talent. Many GICs have recognized the magnitude of the problem. Indeed, 78 percent of our survey respondents cited recruiting entry- and mid-level candidates as a major difficulty.

More than 60 percent of our survey respondents named “high employee expectations” as the biggest hurdle to attracting required talent. (See Figure 7.) Additional barriers include managing compensation and benefits, intensifying competition for talent from other GICs and work/life balance demands from employees.

Difficulty attracting and retaining digital talent Executives across industries also cited a number of recent shifts in employees’ expectations regarding their work lives. These include better compensation and benefits, career progression opportunities, different job responsibilities, frequent training and development opportunities (including international assignments, job rotation programs and e-learning opportunities) and more chances to work directly with their coaches and mentors.

Figure 7: Top barriers to attracting desired talent High employee expectations are making it harder than ever for GICs to attract the digital talent they need

Figure 6: Investment in new recruits Many GICs have to invest in training and other programs to build new recruits’ skills

Source: Accenture GIC Survey 2015Source: Accenture GIC Survey 2015


48%

47%

5%

High level of investment

Moderate level of investment

Low level of investment

High employee expectations

Compensation and benefits

Work/life balance

Nature of work

Positioning of GICs

Organization brand

Award and recognition

Knowledge management

63%

47%

40%

37%

28%

28%

27%

13%

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Changing aspirations of digital millennials

Today, young employees make up a large percentage of GIC workforces, especially millennials (individuals born after 1982). India was home to more than 600 million millennials in 2014, a number almost double the entire population of the United States. And, this “demographic dividend” will only strengthen in the future. India’s youth population (10-40 years old) may exceed Europe’s entire population as early as 2020. By 2030, India’s workforce will comprise nearly 600 million people.

Equally critical, younger workers’ expectations are shifting in fundamental ways. Today’s digitally savvy millennials are looking for fast career progression. Additionally, they are far less risk averse than older workers are and more willing to take on challenging projects that put their skills to the test. They expect flexibility, a faster pace of work and quicker, more creative recognition of their value; for example, opportunities to move into leadership roles more swiftly than promising employees traditionally did in the past. According to a GIC executive we spoke with, “Millennials are a restless lot that are always looking forward to complex and challenging work.” At the same time, young people expect better work/life balance. This became evident in our conversations with several GIC leaders. One executive maintained that “work/life balance is very important to the millennials, particularly in the metros. Some young employees are more focused on work/life balance than compensation.”

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The digital skills shortage is expected to spark a talent battle, where GICs will have to compete against existing and new rivals for the best digital talent. Are GICs’ HR departments equipped to help their company win this war? That is, can they recruit digital talent? And can they motivate them to stay and to keep excelling on the job?

Our survey findings suggest that the answer may be “not yet.” Particularly worrisome are the low engagement scores reported by employees working at different levels within GICs. (See Figure 8.) Risk of defection is another major concern: when we asked employees about their intent to stay with their current GIC organization, nearly half of them cited plans to leave within the next three years. (See Figure 9.) The majority of GIC employees in our study also said that their current organizations only moderately help realize their career goals. (See Figure 10.)

These findings surprised us as many GIC executives in our study said they believe they have a decent understanding of evolving workforce expectations, and they claimed to be taking action to meet those

Mismatch between employee expectations and engagement levelsexpectations. (See Figure 11 and Figure 12.) While 43 percent of the executives in our research cited significant changes to their organizations’ HR practices, another 48 percent claimed to have made moderate changes. The upshot? GICs clearly need to strengthen their understanding of how their workforces’ expectations are shifting and craft more targeted strategies for keeping employees motivated and engaged at work.

For instance, among the employees we surveyed, nature of work (that is, an employee’s defined job responsibilities) emerged as the key driver behind respondents’ decision to join a GIC. (See Figure 13.) However, “nature of work” does not constitute a major feature in most GICs’ employee value proposition (EVP). (See Figure 14.)

Today’s younger employees also look for a sense of purpose in their work and a sense of worth at their organization. They want to feel they are doing work that has meaning, and they want to be recognized for the value they bring to their organization.

Figure 8: GIC employee engagement Large numbers of mid- and junior-level employees at GICs are only moderately engaged at work


Figure 9: Employees’ planned tenure at current employer Many GIC employees don’t plan to stay with their current company for very long

Figure 10: Jobs’ support of career goals Roughly half of GIC employees believe that their current jobs provide only moderate help in achieving their career goals



Less than 1 year 1 to 3 years 3 to 5 years More than 5 years

8% 38% 20% 35%

48% 51%

1%

To a large extent

To a moderate extent

To a small extent

Level of engagement

Senior-level employees (SMs and above)

Mid-level employees (team leads, AMs and managers)

Junior-level employees

High level of engagement 55% 33% 22%

Moderate level of engagement 37% 55% 47%

Low level of engagement 7% 12% 27%

Somewhat disengaged 0% 0% 3%

High level of disengagement 2% 0% 2%

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Figure 11: GICs’ stated understanding of changing workforce expectations Many GIC executives believe they have a satisfactory understanding of what employees expect regarding their jobs and careers

Figure 12: Degree of change in GIC HR practices Large numbers of GICs have made considerable changes in their HR practices in an attempt to attract and retain needed talent



1. No understanding

2. Low

3. Satisfactory

4. Moderate

5. High understanding

33%

47%

0%

0%

20%

No changes

Minor changes

Moderate changes

Significant changes 43%

48%

7%

2%

Figure 13: Why workers seek jobs with GICs The nature of the work involved in a job strongly influences candidates’ decision to seek employment with a GIC .

Figure 14: GIC employee value propositions . . . Yet “nature of the work” doesn’t feature prominently in most GICs’ employee value proposition



45%

44%

39%

38%

38%

33%

27%

24%

13%

Nature of work

Organization brand

Job stability

Compensation and benefits

Work/life balance

Opportunities for career progression

Awards and recognition

Work culture (e.g. flexible work schedules, etc.)

Training and development opportunities

Area

Percentage of GICs rating it as their

EVP

Career opportunities 52%

Organization brand 47%

Compensation and benefits 43%

Work/life balance 40%

Training and development opportunities 35%

Work culture 30%

Awards and recognition 27%

Nature of work 22%

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Barriers to surmounting digital talent challenges The ability to find and attract the right talent has become more critical than ever for GICs—and in some ways, even more challenging. Conventional wisdom suggests that GICs should have solutions at hand, given that talent problems aren’t new. But our research has identified three barriers that may be getting in their way: HR and business leaders at odds, a leadership deficit and shortfalls in funding and technology support.

Our findings reveal a lack of alignment between HR and business leaders on what’s causing their company’s digital talent difficulties. This was particularly evident in the different responses from both leaders to questions about the forces behind employee dissatisfaction and the measures required to improve retention. (See Figures 15 and 16.)

What explains this disagreement? Answers may include lack of understanding about what matters most to today’s digital talent, limited foresight into the company’s future plans, differing priorities and goals, division of responsibilities and line of authority

HR and business leaders at odds and communication gaps between leaders and employees. The fact that each type of leader connects with employees in different ways and that these interactions are shaped by different motivations may also help explain the misalignment.

Specifically, business leaders often have more work-related interactions with employees, which gives them a better understanding of workers’ expectations regarding their job responsibilities and career opportunities. Today’s younger employees aren’t just looking for an attractive compensation but also a variety of professional experiences early in their careers. They look for a sense of purpose and their on-the-job efforts translating into positive business outcomes.

Meanwhile, HR leaders—under increasing pressure to recruit, develop and retain talent—tend to interact with employees mainly to handle routine performance management and other HR-related issues. Thus, they may not preempt brewing discontent in the workforce.

During our discussions with GIC leaders, this misalignment rose to the surface multiple times. One HR leader told us, “Views between both these parties differ widely. HR seems to be more focused on traditional issues.” Another executive added, “We are also seeing this HR and business misalignment as a growing trend and a potentially big business problem.”

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The need for employees to thoroughly understand digital technologies and their business implications extends to senior leaders and others in leadership positions at GICs. Today, leaders at every level and in every corner of a GIC organization must possess superior digital skills combined with deep functional business expertise. They should be comfortable with complexity and able to operate across silos and within cross-functional teams. They need to stay ahead of the technology curve and know how to deploy digital tools and technologies.

Yet the majority of the executives in our study said they are not particularly confident in their organization’s ability to lead in the digital world. (See Figure 17.) Moreover, many GIC employees are not very satisfied with their leaders. Discontentment

A leadership deficit was particularly high among newer employees, those in the workforce less than three years. Age makes a difference, too. The majority of GIC employees are younger than 30. These tech-savvy, smart millennials are always on the lookout for opportunities to advance in their career, and they expect change to happen swiftly. Many leaders have difficulty responding to those demands on short notice. This widens the already existing gap between leaders and their direct reports, which further lowers job satisfaction and engagement. As one GIC executive explained to us, “Lack of trust in leadership also stems from employee expectations not being met.” Another GIC leader we spoke with added, “While the current management team is comparable to any leadership team in the western world in terms of ambition, what they lack is digital leadership skills, and we will have to build those skills over time.”

Figure 17: Employer satisfaction with leadership capabilities Too many GIC executives are only moderately satisfied with their company’s ability to lead in the digital age


38%

57%

5%

High satisfaction Moderate satisfaction Low satisfaction

Figure 16: Measures to improve retention Business and HR leaders have widely differing viewponits on how best to boost employee retention


Business HR

Employee development programs 71% 76%

Better career opportunities 86% 61%

Periodic mentoring of employees 71% 54%

Job rotation programs 43% 61%

Long-term career plans for all employees 64% 50%

Fast-tracked career path for high-potential employees 14% 57%

Retention payout programs 36% 48%

Flexible training systems that reflect customized opportunities 43% 43%

Robust induction and new-hire integration process 29% 46%

More challenging work 43% 37%

Figure 15: Forces behind attrition Business and HR leaders have different opinions on what most drives employee dissatisfaction

Business HR

Compensation and benefits 50% 61%

Unable to meet personal aspirations 64% 45%

Better rewards/benefits at other GIC organizations 14% 48%

Lack of growth opportunities 50% 24%

Work culture 7% 35%

Unclear direction 43% 19%

Lack of trust in leadership 28% 24%

Preference for non-GIC employer brand 21% 17%

Pursue higher education 21% 15%

Awards and recognition 0% 6%


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The young mid-level manager

Owing to the leadership deficit, GICs have come under immense pressure to fast-track employees at mid- and top-level management to support ambitious growth plans. With this aim in mind, most GICs have developed a vast pool of bright, digitally savvy middle managers who fall into the 25-30 year age cohort. While these managers tend to be top performers with solid functional and digital skills, many lack the leadership experience and people management skills that the role demands. That’s because they’re promoted without first receiving opportunities to take part in cross-functional work and to experience more complex roles that teach them how to manage people. Once they’re promoted, they have difficulty handling issues that arise with others up, down and across the organizational chart.

Moreover, many newly promoted mid-level managers are less experienced than and younger or the same age as their subordinates. This can spawn a sharp sense of insecurity among such managers’ employees, who feel they have little to learn from their supervisor. Such differences also make it difficult for younger managers to take charge of their direct reports’ careers or to give them critical feedback on their job performance. At the same time, some newly promoted, young mid-level managers who view themselves as “stars” still want to remain popular among their “fans”—direct reports who used to be their peers. In the words of a GIC executive in our study, “Many times we see young managers struggling to deliver criticism/ bad news. They want to be perceived as ‘rock stars’ and not the ones axing others’ careers.”

GICs must quickly find innovative solutions to these problems, because they will need talented digital leaders not just at the top-most management level but also throughout the entire reporting hierarchy, including younger managers. Only then can GICs adapt to evolving client needs and create the conditions for the collaborative problem solving and the relationship- and team-building skills crucial in the digital age. As recent Accenture research shows, it is a myth that change must always be driven from the top down and is inevitably resisted by middle management. Instead, change leadership radiates out from the center, starting with leaders and teams who want change, and it eventually reaches into every corner of the organization. The role of business unit leaders and young mid-level managers sitting between corporate and team leadership will therefore prove vital to GICs seeking to implement change, deliver measurable business benefits to their parent organizations and sustain high business performance.

In our survey, lack of funding and limited technology support emerged as the biggest internal roadblocks constraining GICs’ ability to meet the digital talent imperative. (See Figure 18.) Such shortfalls may stem from limited understanding of the talent issues at hand or a lack of focus on those issues among leaders tasked with making funding and technology decisions.

To overcome these shortcomings, as well as the additional barriers discussed above, GICs will need to take new approaches to talent management.

Shortfalls in funding and technology support

Figure 18: Internal talent challenges Lack of funding for HR transformation, along with lack of supporting technologies, is hampering GICs’ efforts to build a digitally empowered workforce


50%

48%

40%

40%

40%

37%

30%

Insufficient funding for innovative HR strategies

Lack of technology to support the changing needs

High focus on processes and policies

High level of control by parent organization

Lack of support from senior management to respond to changing needs

Lack of understanding of HR issues by senior management

Lack of capabilities in the HR team

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Setting the stage for successTo build a digital powerhouse, GICs’ HR function will need to play a central role in acquiring and keeping the digital talent needed to support the parent organization’s business priorities. But to fulfill this role, HR will have to do more than merely adjust to emerging realities; it will have to transform itself in three key ways: stretching beyond traditional HR boundaries, “consumerizing” employee experiences (enhancing them through personalization) and building strong digital leaders throughout the organization.

HR must become more than just a department—it needs to be a distinctive capability embedded throughout the GIC organization. And its role must center on designing experiences that enable the organization to recruit, develop and retain needed digital talent, including digital leaders. To do all this, the HR organization needs to stretch beyond traditional boundaries and integrate itself across the organization, by partnering with individuals and teams previously seen as irrelevant to HR. Through such partnerships, HR can seek to create world-class experiences for employees that leave a lasting positive impression every time workers interact with the company, its customers and its services. (See Figure 19.)

Stretching beyond traditional HR boundaries To drive this transformation, HR executives and business leaders must first agree on what their company’s most pressing digital talent issues are and what’s causing them. As one HR leader in our study explained, “Even today, Indian management schools have an archaic HR curriculum, and new talent joins us with a similar mindset. Focus also varies on employee retention. While business leaders want to provide more direction and clarity on their career path to employees wanting to leave, HR would rely more on rewards and recognition.”

Figure 19: Reinventing the HR function To succeed, HR will need to stretch beyond traditional boundaries, partnering with business leaders to provide world-class experiences for employees

‘Employee experience strategy’ will be one of the key drivers for the new ‘Organizing strategy’ for HR

Provide a seamless Employee Experience HR will relinquish some control—and take over new functions

Rethink the concept of HR -- not just as a department -- but as a capability woven throughout the organization

HumanResources

Finance &Accounting

Procurement

Employment Lifecycle

JoinDevelop & Grow

Reward &Recognize

Health & Safety Travel & Meet Enable

Highly Sensitive Personal Support Administrative Change

Move &Transfer

Pay Coach Leave

Workplace Support

Personal Support

Reporting & Analytics

Technology &Communication

HR Fin Prc IT

Mail

I am starting to work forI need to travelfor business

I need to travelfor business

I need approvedtime off

Web

Text

Voice

Self service

Chat

FacilitiesS tores/Factories

“Employee Moment” Management

Delighted Customers

Provider Strategies & Intergration

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Going forward, HR will need to work closely with business leaders throughout the GIC organization to craft a forward-looking talent acquisition and retention strategy. It will need to conduct strategic workforce planning using a thorough understanding of talent supply and demand gaps in various parts of the company. It will also have to collaborate with a diverse array of leaders to create an employee value proposition that centers on fostering a sense of meaning and providing other forms of value that employees seek.

Reshaping the HR organization to support partnering with business leaders will require changes on many fronts. Technology can help, by facilitating the flow of talent-related data and information throughout the organization—for instance, data related to employees’ competencies, competitors’ workforce configurations and the labor market. Such data can help HR and business leaders collectively build a comprehensive view of their company’s workforce and its most pressing talent challenges. It can also stimulate dialogue among HR and business unit leaders about possible solutions.

The majority of workers in the digital talent market are millennials. And research has found that as they evaluate employment options, they are more influenced than members of the older generations by values they see in effect in the workplace, the nature of the work and opportunities to take on challenging assignments. They want and need adequate compensation, of course, but they also yearn to feel that they are contributing to something that’s meaningful, that goes beyond mere money.

To attract, develop and retain such talent, HR must “consumerize” employee experiences. That is, it needs to adopt a customer service mindset and approaches for delivery of employee services. The goal is to understand and coordinate all employee touchpoints—“moments that matter”—across the organization to deliver a seamless, satisfying and personalized employee experience that includes efficient assimilation into the organization.

Numerous moments that matter arise throughout the employment journey. Some of them center on first impressions with a company, for instance, a phone or

“Consumerizing” the employee experiencein-person interview where a recruiter demonstrates understanding of a candidate’s goals, interests and qualifications. Such an experience can boost the odds that the candidate will enthusiastically accept a job offer if the company decides it wants to bring him or her on board. During onboarding, other moments of matter arise. These may relate to practical concerns, such as the need to manage business travel logistics or expense reports. Or they can be more substantive; for example, the employee needs more resources to succeed in the job or wants to build skills required to advance in his or her chosen career. Even for exiting employees, there exist important moments that the company must attend to. A constructive exit interview in which the person feels that any concerns have been heard can leave a lasting favorable impression of the company. This enhances the likelihood that the person will spread positive word of mouth about the organization to other job seekers he or she encounters. And a manager who helps a departing direct report find satisfying new opportunities and who stays in touch afterward will foster a sense of personal connection between the employee and the company. (See Figure 20.)

Among all these moments that matter, creating a positive, enduring first impression for each new hire during onboarding may count among the most critical. (See Figure 21.) After accepting the offer, the new recruit goes through the onboarding process, which comprises activities and events that occur before as well as after the person’s first day on the job. One way HR can create a seamless and satisfying onboarding experience for each new hire is to connect him or her with an onboarding advisor, who will be the single point of contact for that employee. The advisor takes responsibility for activating and ensuring completion of HR-related processes for

the newcomer (such as creating a personnel file) as well as non-HR processes (like setting up email and assigning a parking space). Such advisors have to know how to collaborate effectively with a variety of leaders in other functions besides HR—such as IT, finance and facilities—to design and deliver personalized memorable experiences for employees throughout the onboarding process. As such, they play a vital role in the HR function’s efforts to transform itself.

Figure 20: Reshaping the employee experience: Moments that matter During an individual’s employment journey, numerous opportunities arise for a GIC to create enduring, positive impressions on employees

I want to refer a friend to XYZ

I am starting work at XYZ

I want to update personal information

I am having an issue with technology

I have a lasting connection with XYZ

I am leaving XYZ

I want to travel for work

I want to record/ update my attendance

I want to query or resolve pay issue

I am well quipped to succeed at XYZ

I want access to resources (facilities) for my job

I want to learn ‘XX’ to do my work effectively

I want to recognise a colleague

I want to know how I’m doing

I want to grow my career at XYZ

I want time off

I want business information for my role

I want to submit an expense report

I have a sensitive workplace issue

I want to move to a different role/ location within XYZ

I have an outstanding start to my relationship with XYZ

I am excited about my decision to join XYZ

“First Impression”

“Exciting Journey”

“Lasting Impression”

Employee Onboarding Experience

28 29

Digital technologies can help HR consumerize employee experiences, by tailoring them to individual employees to further create a sense of personalized meaning. For instance, HR can use mobile technologies to streamline a variety of tasks across the recruitment process—such as enabling candidates to conduct an internal job search, take part in interviews, complete competency assessments, seize advantage of development opportunities and manage expense reports. They can also leverage social technologies to boost collaboration in the workforce — often outside traditional hierarchies and channels. Some mobile-minded GICs are using recruitment apps and game-based assessment and selection tools in their hiring and performance management practices. What’s more, given that many employees leave their current organization in 3-5 years, GICs can use digital technologies to set up a knowledge management system to reduce the need for the constant and costly training that comes with high turnover. (See Figure 22.)

Finally, GICs can also tap into India’s maturing innovation and start-up ecosystem to complement their internal organizational capabilities to attract, develop and retain digital talent. Startups are often one of the best source of fresh talent and ideas that can help enhance employee experiences by giving workforce access to fresh thinking and resources essential for developing promising ideas into new products or services. It would also give the company access to external digital talent to augment its in-house supply as needed.

Figure 21: A seamless onboarding experience An onboarding advisor can help ensure that new recruits assimilate smoothly into the organization and start their employment journey on a positive, productive note

Onboarding Advisor Employee

“I am starting to work for Company X”

Onboarding Advisor Service is triggered End of service

Coordinates Service Delivery across non HR functions

Sends signed Letter of

Appointment

Onboarding Advisor is assigned

Point of contact for employee Employee starts

new job

HR IT Finance Facilities

•  Advisor creates contract, sets up personnel file, stores documents for new employee

•  Issues laptop, email ID, phone, etc. before employee joins

•  Keeps Onboarding Advisor updated

•  Reimburses joining expenses (if any); registers employee’s financial info


•  Organizes office space, parking space, etc.


Delivers HR Services Meeting the digital imperative will require significant change on the part of GICs. Using data collected from more than 750,000 change journeys, Accenture has identified strong leadership as a critical success factor in driving profound transformation. And as noted earlier, effective change leadership radiates out from the center. Accordingly, GICs will need to focus on building digital leadership skills throughout their organization—at all levels and in every part of the company. This will be particularly important in the entry- and mid-level management ranks, where GICs face the most difficulty attracting and recruiting candidates.

But what does all this mean in practical terms? The leadership capabilities GICs need to help their parent companies thrive in the digital age include managing complexity and exercising judgment in the face of ever-larger volumes of data and the collapse of traditional hierarchies. In addition, a premium will be placed on the ability to collaborate, experiment and unleash employee creativity. To attract and retain top talent, stay ahead of the competition and exceed financial expectations, GICs must build an organizational culture reflecting key characteristics of the digital era, such as experimentation, collaboration and agility.

Recent Accenture research shows that for high-performing groups, trust in leadership is so high that people are willing to get on the “bus” even before they know where it’s headed. They first commit emotionally and are happy to find out where they are going, as they move along in the change journey. Organizations blessed with such trusted leaders can begin implementing and accelerating a change

Building strong digital leaderseffort—such as an initiative focused on digital transformation—without first having to educate employees about the specific details. Getting this right up front can spell the difference between failure and successful change that delivers quantifiable benefits to the business.

Moreover, with the advent of the digital age, GICs need more from their leaders than just the traditional requirements. It’s not enough for leaders to be aware of the demands that have come with digital disruption. Leaders will also need to learn how to adapt to the fast pace of change and swiftly build their own digital credentials so they can manage the cultural and competitive challenges facing their organizations. To drive digital transformation on the inside (in a GIC’s operations, culture, practices and workforce) and on the outside (in company image and talent appeal), GICs require clear commitment and savvy direction-setting from all their leaders.

Satisfying this need will prove daunting. Fast-changing market and technology dynamics are heightening demand in all industries for leaders who readily seek out and leverage new technologies to help their organizations surmount complex business challenges. To excel at such digital leadership, managers and executives must be able to embrace a digital mindset, think innovatively, deal with complexity and manage paradoxes. And since leadership quality powerfully influences employee engagement, GICs have to understand the defining characteristics of effective leadership and strive to develop and sustain these characteristics in their organization.

Figure 22: Mobility’s many uses Progressive GICs use mobile technology to design a wide range of personalized experiences for employees

Internal job search

Candidate interview

Competency assessment

Mobile learning & engagement

Time, leave & expense management

30 31

Fostering a digital mindset among GIC leaders

Recent Accenture research shows that only 34 percent of business leaders are well prepared for digital in terms of cultivating the right mindset and practices. And only 39 percent feel they are well prepared for changes needed in workforce skills and job mix. To overcome these hurdles, GICs must foster a digital mindset throughout their organization.

That will call for some considerable cultural change, especially in the leadership ranks. Leaders, for instance, will need to empower their direct reports to use digital technologies that help them make decisions and do their work creatively and flexibly. They will also have to manage complex spans of control, promote nonlinear thinking and interpret large volumes of data coming from a multitude of sources. To develop such leaders, GICs must combine recruitment of outside digital leadership talent with pioneering development activities (training, coaching, action learning, mentoring) that quickly build internal leadership capabilities at all levels.

When leaders throughout the organization have a digital mindset, they can more quickly and clearly communicate the purpose and benefits of every digital-related change initiative to employees. As a result, the individuals and teams responsible for executing such change initiatives can fulfill those obligations more effectively and efficiently. Leaders with a digital mindset are also better positioned to encourage employees to innovate, take risks and operate in a much more flexible way than they did in the past.

We don’t mean to suggest that GICs should dispense with established best practices for running a business. Instead, they need to augment such practices with new kinds of competencies in their leaders. These include a willingness to let go of some decision making and allow employees to operate in more entrepreneurial and creative ways.

The fact is, leaders in the digital age must be flexible and adaptable, willing to see value in sharply different viewpoints and comfortable with uncertainty. Moreover, like all leaders before them, they should feel passion for what they do. They need to look globally for solutions to their organization’s thorniest challenges, and strive to constantly learn from their own supervisors, peers, external collaborators and direct reports. The best among them will nurture an egalitarian and results-oriented mindset.

GICs’ HR organizations will need to help young leaders, especially those in the mid-level management ranks, to build these essential leadership capabilities. To do so, HR must cater to the expectations of an ambitious workforce, manage virtual teams across multiple time zones, adopt a global mindset and embrace diverse ways of thinking on matters such as employee engagement.

An excellent first step is to give high-potential leaders international job rotations and first-hand exposure to challenging assignments, as well as access to advanced training and development opportunities along with focused coaching and mentoring. Take Zappos for instance. The online shoe and apparel retailer designed a governance model it calls “holecracy” aimed at developing digital leaders. This model distributes management and decision-making to networks of self-organized teams, known as circles that are charged with executing projects that

support the company’s strategies. Some networks link employees with external contacts; for instance, peers at entrepreneurial companies that can inspire ideas for innovations in business processes, products or services. Other networks focus on cultivating positive, mutually beneficial relationships with internal or external clients. Still others may comprise peers within the organization who come together specifically to brainstorm solutions to problems and develop best practices. Together, these and other networks help fuel innovation and support smart decision-making and problem-solving—by efficiently coordinating people’s activities and opening doors to needed resources. (See Figure 23.) Though Zappos is an online-only business, this approach can deliver valuable benefits for other types of organizations as well, including GICs.

Reaching up provides information and

support

External peer or SME networks for process or product

innovation

Client (internal or external) ensures satisfied and

profitable relationships Junior colleagues provide insight and build teams

Internal peer networks for

brainstorming and best practices

Figure 23: Networks of self-organizing teams Networks help companies efficiently coordinate activities throughout the organization and open doors to essential resources

32 33

Some forward-looking GICs are also making innovative use of social media to develop leaders by enabling them to regularly take the “pulse” of the workforce so they can sense and address emerging issues. Microsoft is a case in point. The global technology giant trains leaders to be omnipresent in the workforce through judicious use of social media. For instance, Microsoft IT leaders use analytical software to monitor trending topics in the company’s Yammer collaboration space. This helps them pick up on early warning signals of eroding employee engagement or job dissatisfaction. The goal is to go beyond using scorecards and key performance indicators (which typically shed light on only what has happened in the past) and to enable leaders to

detect changes in workforce sentiment in real time to stave off future problems.

To support their organization in its digital journey, GIC leaders should also capitalize on employees’ optimism regarding their organization’s ability to ultimately embrace digital. While our primary research showed that many employees aren’t fully satisfied with their company’s leadership capabilities in general, many still believe that their company is effective at equipping them with the digital technologies they need to deliver better performance on the job.

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Capitalize on employee optimism

Employees feel digitally empowered

GIC employees are upbeat about anticipated advancements made possible by digital technologies. As much as 96 percent of the employees in our recent study said they believe their organization has equipped them with the right technology for working and collaborating more effectively.

Employees are comfortable with the pace of change

A vast majority of employees (95 percent) view their organization as a frontrunner in using digital technology to empower employees ready for digital technologies, in terms of workforce skills as well as work practices and processes.

Employees see an active role for digital in enabling HR processes

A vast majority of employees in our research want to see further use of digital solutions in HR processes, such as recruitment (40 percent), training and development (34 percent) and performance management (27 percent). They believe that use of such solutions would promote greater autonomy for employees, including self-paced learning, and greater integration of talent management processes, which would create more seamless experiences for workers. When asked how their employers could further help them use digital technologies to perform their work and collaborate more effectively, the majority of their responses centered on training and development, knowledge management and recruitment and onboarding.

As GICs move to the next stage in deepening their relationship with their global enterprises, most C-suite executives will have to put unlocking the value of their digital talent at the top of their strategic agendas. In an industry facing such a pivotal crossroads, how GICs approach management of their digital workforce will spell the difference between success and stagnation. To succeed, GICs will have to adopt decidedly new approaches to engaging and enabling their workforces. They will also need to rapidly establish a digital culture and build strong

The path forwarddigital leaders who can embed digital talent, tools and ways of working throughout the organization. Equally critical, GICs’ HR function will need to reinvent itself—developing new capabilities and possibly even constructing a new operating model to remain relevant. GICs that can successfully navigate these profound changes will be in the best position to acquire, develop and retain the digital talent so critical to driving sustained growth—for themselves and for the parent organizations they serve.

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Accenture has stood at the forefront of conducting extensive research on Indian GICs’ growth journey. Our first research report, “Breaking into the strategic orbit of the global enterprise: Action agenda for global in-house centers in India,” published in 2014, focused on the key imperatives facing GICs seeking to forge a strategic partnership with their parent enterprise. As part of that study, we conducted in-depth discussions with 20 GIC leaders and drew on input gathered from a workshop held during the NASSCOM GIC Summit 2014. The research revealed six areas in which GICs must excel to become strategic partners to their home corporations:

• Global business and operating models—including understanding how their company’s global business model is being disrupted by VUCA (volatile, uncertain, complex and ambiguous) forces.

• Growth and innovation—moving from process and delivery excellence to excellence in delivery of market and product innovation.

• Customer centricity—gaining greater visibility into the needs of their home enterprise’s customers.

• Enterprise transformation—building the infrastructure and capabilities needed to get the best value from their workforce.

• Leadership and talent—exposing leaders and employees to a culture of product excellence, intrapreneurialism and work in a digital environment.

• Enterprise performance management— weaving collaboration and digital expertise into their performance management systems, to assess their contribution to their home company’s top-line growth.

Appendix: About our research

In our most recent research, we have focused on exploring the pivotal role played by talent in driving Indian GICs’ growth over the past decade. With this in mind, we looked more closely at the talent imperatives—including hiring and retaining employees and managers with strong digital skills—facing GICs as they strive to become strategic partners to their parent organizations.

As part of this latest phase of our research, we surveyed GIC employees and executives; our sample size was 1,010 and 60, respectively. The respondents hailed from leading GICs in India that span a diverse array of industries, including banking, financial services and insurance; IT; healthcare; telecommunications; manufacturing; retail; and chemicals.

About the research

31%IT

22%Finance20%Customer Management12%Sales8%Marketing7%Others

Sample size

Industries covered

Functions covered

60 semi-structured interviews conducted withHR and business leaders at 47 GICs

Employer survey

41%

18%

11%

10%

10%

4% 4%1% BFSI High Tech

Healthcare Telecom

Manufacturing Chemicals

Retail Others

1,010 structured interviews conducted with entry-and mid-level employees of 33 GICs

Employee survey

Sample size

24%33%

25%10%

8%

BFSI

IT

Healthcare

Telecom

Others

Industries covered

40%Finance

30%IT7%Sales7%Customer Management5%Marketing13%Others

Functions covered

38 39

Mamta Kapur Manager, Accenture Institute for High Performance [email protected]

Luv Nijhawan Associate Manager, Accenture Institute for High Performance [email protected]

Himanshu Tambe Managing Director – Lead Talent & Organization APAC & Capability Network

Raghav Narsalay

David Light

Paul F. Nunes

Muralidharan Chandra

R. Shiva Raman

Pooja Wadhwani

Udit Sabharwal

Sankalp Mohanty

Authors

Research Sponsor

Senior Editorial Review Team

Contributors

Endnotes

i. NASSCOM estimates.

ii. “Imagining India from the millennial perspective,” Business Insider India, April 25, 2014.

iii. “Turning change upside down: How new insights are changing old assumptions,” Accenture, 2015 https://www.accenture.com/gb-en/insight-turning-change-upside-down.aspx

iv. “Being digital: Embrace the future of work and your people will embrace it with you,” Accenture, 2015. https://www.accenture.com/t20150626T232714__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_16/Accenture-Being-Digital-Workforce-2015-Report.pdf

v. “Success or stagnation in the communications industry? -Unlock the value of your human capital in the digital age,” Accenture, 2015 https://www.accenture.com/us-en/insight-success-stagnation-in-cmt.aspx

vi. “Turning change upside down: How new insights are changing old assumptions,” Accenture, 2015. https://www.accenture.com/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Strategy_7/Accenture-Turning-Change-Upside-Down.pdf

vii. “Digital leaders: Moving into the fast lane,” Accenture, 2015.

viii. “Digital disruption: Embrace the future of work and your people will embrace it with you,” Accenture, 2016 https://www.accenture.com/t20160113T204412__w__/us-en/_acnmedia/PDF-4/Accenture-Strategy-Digital-Workforce-Future-of-Work.pdf

ix. “Creating a digital workforce,” Accenture, 2014. http://click-accenture.com/creating-a-digital-workforce/#.VrShSMvcsq0

x. “Leadership in the digital age,” George R. Goethals, Georgia Sorenson, James MacGregor Burns, The Encyclopedia of Leadership, 2004.

About AccentureAccenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 373,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

About Accenture Institute for High PerformanceThe Accenture Institute for High Performance develops and communicates breakthrough ideas and practical insights on management issues, economic trends and the impact of new and improving technologies. Its worldwide team of researchers collaborates with Accenture’s strategy, digital, technology and operations leadership to demonstrate, through original, rigorous research and analysis, how organizations become and remain high performers.

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