Reading the tea leaves again: TBR’s Professional Services and IT Services Team looks ahead to 2Q19
Talent remains the catalyst to success, with leadership
Every vendor raises the issue of talent when discussing disruptions and strategic priorities, reflecting the continued struggle to recruit, retain, retrain and reward skilled resources in a crowded, competitive market. To track how vendors have been handling these challenges, TBR will continue analyzing every step of the journey, including recruiting at universities, where TBR has seen an uptick in apprenticeships and training so new employees arrive ready to work on day one. TBR has also seen an increase in training and reskilling budgets, with a common emphasis on digital skills considered essential for every digital transformation engagement. (And what engagement now isn’t digital transformation?) Notably, Accenture (NYSE: ACN) has pledged to spend $1 billion on training per year for the next few years and is increasingly using AI-enabled platforms to support that effort. In a recent post, Accenture’s head of human resources, Ellyn Shook, said that Accenture can be a case study for reskilling talent. Over the past four years, the Dublin-based consulting firm has, Shook said, “reskilled” nearly 300,000 of its total body of 469,000 employees. Beyond bettering their employees, many IT services vendors and consultancies have revamped efforts to spread their HR successes such as Cognizant’s (Nasdaq: CTSH) “Future of Work” campaign. Accenture has a Future Talent Platform, and PwC has described a diverse, multichannel and multimode digital training program to TBR.
TBR recognizes this trend around talent isn’t new, but as vendors develop offerings and fund training programs, IT services vendors and consultancies begin to ask a new question: How much will firm culture need to change to accommodate new digitally focused talent? The new concerns around talent are bigger than the decade-old question of how to handle Millennials. Vendors have seen traditional strategy firms alter their hiring practices and adjust their professional development tracks. And more IT services-centric vendors have begun re-hiring experienced professionals to both fill talent gaps and provide leadership, especially as engagement teams shrink and clients demand more agility and flexibility from the IT services vendor. With the advent of automation, we expect the challenges associated with attaining, retaining and upskilling to get worse before they get better, as the fear of losing jobs to machines still persists in the market. It may take a generation to record a full pivot to and recognize the benefits of a right-skilled bench and the associated KPIs. The services firms that can rotate their workforces to establish these new skills from both the bottom up and the top down, in terms of organization hierarchy, are positioned to win. The C-Suite of the future needs to be ready to operate in the boardroom of the future, and vendors that recognize and act on that shift — not just through marketing materials but also execution — are positioned to earn share from rivals.
TBR’s Professional Services and IT Services Team will take a closer look over the second quarter and the rest of 2019 at three trends sparking extra attention among vendors, their technology partners, and clients: cloud, talent and vertical approach. None of these trends are remarkably new, but subtle shifts TBR has seen in recent months, combined with questions from clients about the direction of the IT services and consulting market, provide new frameworks for analysis.
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