A sector insight from the Global Human Capital Study 2005 · PDF file ·...

IBM Business Consulting Services

Human Capital Management and the Telecommunications SectorA sector insight from the

Global Human Capital Study 2005

HCM in Telecoms

�

New technologies, competitive pressures

and rising customer expectations

are driving change in all industries.

The telecommunications sector is no

different. Pricing for traditional services is

becoming increasingly competitive while

technological innovations are leading to

a focus on greater convergence to win

future market share.

As part of this change process, human

capital is moving up the business agenda

and is increasingly being perceived as

a strategic asset rather than a cost.

Organisations need to ensure that

traditional satellite and wireless services

are run efficiently and that the workforce

is appropriately trained and motivated.

At the same time, however, telecoms

companies must also ensure that the right

human capital and leadership is in place

for the organisation of the future.

This new focus on talent means that

Chief Human Resources Officers

(CHROs) are well placed to play a leading

role in driving change. They need to

improve processes to boost operating

efficiencies, develop models to ensure

the organisation continues to have the

human capital it needs to prosper, plan

for successful executive leadership and

ensure learning and performance are

effectively managed. They must also

ensure that the HR function measures its

performance against key metrics so that

it can demonstrate its contribution to the

business’s bottom line.

Most importantly of all, the CHRO needs

to focus on the workforce as well as the

HR function, ensure the talent agenda is

properly represented at board level and

focus on driving people strategies that

support the business for the years ahead

– not just the next quarter.

Introduction

�

The telecommunications industry faces

a dilemma. Rapid developments in

technology have meant that the race

for market share is now focused on

convergence – the most efficient and

effective delivery of voice, data, and

media content through an integrated

service provider. Existing telecoms

businesses that focus solely on traditional

wireless and satellite services with their

decreasing margins will not survive. But

at the same time they need to ensure

these cash cows are run efficiently in

order to fund significant investment in the

technological research and development

needed to support greater convergence.

And to complicate matters, organisations

must tackle these twin challenges against

a backdrop of competitive pricing.

In this environment of business change

and uncertainty, the operational and HR

organisation is under significant pressure

to retain a portfolio of talent focused on

the traditional business while ensuring

that appropriate human capital is in

place to fuel and sustain future business

growth. The mature telecoms business

finds itself asking several fundamental

questions. How do we keep older

employees committed to existing wireless

and satellite businesses? How can we

make the most of technology to ensure

business continuity and efficiency? And

what organisational models – from shared

services to outsourcing – will offer the

most effective deployment of people and

processes in the delivery of our traditional

services?

Key trends in the telecommunications industry

“We are thin in skills… so turnover is a risk... The critical issue is can we increase employee satisfaction and loyalty before the labour market tightens?”

Telecommunications company, North America

�

But telecoms companies that are

focused on the development and

commercialisation of new technology

must ask themselves different questions.

What knowledge, skills, aptitudes and

competencies will the organisation of

the future need? How do we predict the

correct number and type of people to hire

for future business requirements? And

what will the leaders need to be like in the

middle of this chaos?

However, these two competing demands

must both be tackled, since the existing

element of the telecoms business

must fuel the cash requirements of

convergence exploration, discovery,

innovation and development. Cost control

and integrated functional process delivery

are as important in strengthening the

vitality of telecoms today as they have

ever been.

The flurry of mergers and acquisitions

(M&A) among major industry players is

indicative of recent efforts to become

more cost-effective and harness the

best of current and emerging practices

and technologies in telecoms. It also

reflects the challenges that the sector

faces in general. This M&A activity has

made effective change management key

to future success, bringing competitive

advantage to those companies that can

most quickly get the workforce to accept

a new culture and recognise the benefits

of change.

�

The impact of staff turnover and

fluctuating staffing levels at contact

centres remain a cause for concern for

many telecommunications businesses.

Downtime in contact-centre environments

or inadequate staffing to fulfil demand

causes inflexibility, high costs and higher-

than-average employee turnover.

The IBM Global Human Capital Survey

revealed that telecoms companies faced

higher employee turnover than other

industries – though the importance of this

issue for companies varies from region to

region. Globally �7 per cent of telecoms

survey respondents had been with their

companies for more than one year and

less than four years compared with only

�8 per cent of respondents in all other

industries. And just eight per cent of

telecoms employees had been with their

company for �0 to �� years, while the

figure across all other industries was ��

per cent.

Leveraged staffing is neither science

nor art – it is a combination of the two.

Telecoms companies that invest in efforts

to bring more predictability through

modelling, process improvement and

technology (e.g. targeted skill previewing

and testing for contact-centre specialists)

will reap the benefits.

Asia Pacific NA LA

Less than 1 year 1-4 years 5-9 years 10-14 years 15-19 years 20-24 years Over 25 years

0Grand Total

Blank Not far at all


Getting Started Doing Alright Getting There Have Arrived

Telecommunications All other industries

Sour

ce: I

BM G

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005

0

5

10

15

20

25

30

35

40%

“A key challenge is to expand resources to deal with the new cell telephony business. This market is growing sharply, so we must ensure the company has all the resources and skills required.”

Telecommunications company, South America

Average tenure of telecoms workforce compared with other industries

�

Existing telecommunications businesses

are turning to a number of solutions to

enhance operational efficiencies:

• Workforce management integration

– staff forecasting based on consumer

trends in service, sales and product

and promotion introduction.

• Automatic “skills-based” call

routing in call centres.

• Automated time and labour

management systems, particularly

in retail environments.

• Optimising labour resources by

integrating labour supply and

demand and finding the best value

labour for service delivery.

• Forming partnerships with service

providers to achieve the most

efficient and effective delivery of

administrative, operational and higher-

end consultative services. This may

include service providers running:

HR; financial and IT shared services;

training; sourcing and selection.

Telecoms companies that recognise the

value in keeping their mature businesses

functioning efficiently have pursued some

or all of these programmes. Indeed, they

are essential for competitive success.

Planning for executive leadership

However, while focusing on “business as

usual”, companies also need to ensure

they have the technology, finance and

human assets in place to prosper in the

marketplace of the future. Short-term

concerns must be balanced with longer-

term requirements for commercialised

innovation, nimbleness and confident

leadership. In particular the need to

drive future growth and development

in an increasingly complex technology

and partnership environment has placed

identifying and planning for successful

executive leadership firmly at the forefront

of the organisation’s human capital

planning.

The implications for Human Capital Management

�

Typically this is considered to be part of

the succession-planning process – but

identifying the competencies required in

the future is far more than this. HR needs

to:

• continuously and actively assess

future market requirements

• identify the executive competencies

necessary to develop future

market and business strategies

in the telecoms industry

• be constantly on the lookout

for talent that can deliver these

strategies and reflects the need for

a diverse and inclusive leadership

• develop a workforce strategy

by employee portfolio that fulfils

future staffing requirements

• identify and develop middle

managers’ professional and

technical skills and competencies.Asia Pacific NA LA

Measuring the business impact of learning programmes Using learning management systems (LMS)

0Grand Total





Sour

ce: I

BM G

loba

l Hum

an C

apita

l Stu

dy 2

005

0

10

20

30

40

50

60

70

80%

Does your organisation take steps to manage and measure learning?

7

Ensuring that an organisation’s change

agenda is led from the top is crucial if it

is to get buy-in at all levels. Leadership

must set an example by demonstrating

awareness of and passion for the

change process. As a result, HR needs

to conduct a change-agent assessment

and establish whether existing leadership

has the resolve to implement change.

Alternatively, does the solution lie in

developing or buying in leadership that

“walks-the-talk” on change and the

change agenda?

The importance of training

Telecoms companies have long

recognised that training is essential

for learning and the acquistion of the

skill sets necessary for successful

operational performance. The IBM

Global Human Capital Study �00�

reinforces this. It found that �� per cent of

telecommunications companies measured

the business impact of learning,

compared with just �� per cent in all other

industries combined. What’s more, 78 per

cent of telecoms companies employed

a learning-management system to track

and certify training, as against �� per cent

of all other respondents.

“More rigour is being brought to evaluating training. Training effort will only be retained if a clear correlation can be demonstrated between the training and business results.”


8

The study also indicates that telecoms

companies are consistently better than

other industries in measuring performance

and monitoring the return on their training

investment. They appear to make every

effort in managing performance and

tracking it against business profitability.

Within the telecoms sector, �00 per cent

of middle managers and 9� per cent

of operational staff regularly received

performance reviews as opposed to 9�

per cent and 8� per cent respectively

for all other industries combined. This

focus on performance assessment and

metrics is consistent with telecoms

companies’ methodical approach to

measuring operational performance such

as value per call, average handle time and

customer satisfaction.

Asia Pacific NA LA

Middle managers Staff

0Grand Total





Sour

ce: I

BM G

loba

l Hum

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apita

l Stu

dy 2

005

0

20

40

60

80

100%

Percentage of middle managers and staff receiving performance reviews

9

Training by employee segment is crucial.

Sales-force-effectiveness training ranks

as one of the most important methods of

increasing sales revenue and customer

satisfaction. This type of training is key

to providing agents with knowledge

and confidence around new products,

initiatives and features as well as building

awareness about new regulations that

affect “in-store” retail sales. Smart

telecoms companies understand the

value of just-in-time training that equips

their sales force with bundled skills in

business selling in managed accounts

and service innovation.

The need for telecoms businesses to

keep the current labour force engaged

and working efficiently while identifying

and acquiring the competencies and

leadership required for the future is

clear and critical. Those companies that

continue to perform well in both these

areas will enjoy significant strategic and

operational competitive advantages.

“Leadership is a key element of our transformation and strategy. We expect leadership involvement and inclusiveness in driving the success of the business at all levels.”


�0

“We need data, not anecdotes – process data that reflects the contribution of a process to the business results rather than just how well run the process is.”


An effective human capital strategy is

essential if telecoms companies are

to boost profitability successfully while

also keeping employees committed

and engaged. “Smart” organisations

can achieve this through innovative

improvements to operational and

administrative technology and process

delivery.

Avoiding the menace of maturity:

process development

A key goal for CHROs in telecoms

businesses must be to ensure that

traditional wireless and satellite

businesses operate with maximum

efficiency. This requires consistent and

planned work on process improvement

to guard against the risk of becoming

unresponsive to the needs of their

workforce in a maturing market. Best-in-

class metrics that contribute to overall

operational performance need to be

identified and performance against them

measured and improved.

Other operational metrics can be identified

for areas such as customer retention,

allowing programmes to be implemented

for monitoring, measuring and enhancing

the operational performance of call

centres.

In some areas the telecoms industry

has already taken steps to enable

the workforce to operate with greater

efficiency. The IBM Global Human Capital

Survey �00� found that �� per cent of

managers had access to managerial

self-service, compared with just �7 per

cent in all other industries. And 70 per

cent of non-managerial staff could access

employee self-service, as against �8 per

cent elsewhere.

The role of HR in telecoms

��

HR needs to review the labour skill

requirements of the workforce, analyse

existing work demand and find the best

way of matching the two through the

integration of strategic, process and

technology initiatives. In the call-centre

and retail environments this could involve

the adoption of suitable workforce

forecasting and scheduling tools. Another

call-centre innovation is the gradual

disappearance of queues or automatic

call-routing based on “next-in-line” flow.

It will be replaced by an automated

“skills-based” process, which will route

customer calls according to customer

group and the availability of the most

suitably skilled call-centre operative.

Companies that are intent on harnessing

the value of their human capital to

maintain market share while pursuing

longer-term market transformation are

also exploiting new desktop applications

for the call centre. Innovative technology

allows customers direct access to

company portal sites that are primarily

self-service but are backed up by

technologically savvy and well-trained

customer service staff that can complete

the customer transaction when the

customer is unable to do so.

Asia Pacific NA LA

Access to employee self-service Access to managerial self-service

0Grand Total





Sour

ce: I

BM G

loba

l Hum

an C

apita

l Stu

dy 2

005

0

10

20

30

40

50

60

70

80%

Percentage of workers with access to employee and managerial self-service

��

The quest for talent: addressing the build-buy

balance

Of course, the role of HR in the telecoms

industry isn’t just about improving current

operational performance. A further

priority is to ensure that the organisation

is equipped with the talent it needs to

thrive in the future, particularly with the

problem of high employee turnover facing

the industry and the need to focus on the

development of converged services.

So how can the HR organisation

successfully identify the number and type

of people that the company will require

in future? How can it establish the skills,

knowledge and competencies required? A

systemic approach to talent management

is essential.

HR needs to develop a model that

enables it to identify the global

competencies and skill requirements

of the organisation and match these to

current and future staffing needs. This

model must address the global acquisition

of talent from internal, external and

contingency sources and the way this

talent is managed and deployed internally.

One useful way of looking at this is

through the concept of an integrated

talent pool. This applies the fundamentals

of supply-chain management to the HR

needs of an organisation to create a

single pool of global talent that optimises

the acquisition and deployment of talent

and enhances career development

opportunities. Factors determining the

availability and use of talent in the pool

include demand, supply, balancing

processes and organisational structures,

management systems, sourcing strategies

and alternate work models.

��

Improving recruitment practices

IBM has worked with major telecoms to review and revamp their hiring and

recruiting practices. For one client this involved conducting a specialised call-

centre recruitment programme that included customised skill assessment, job

previews and metric reporting for call-centre operatives. By understanding the

skill requirements for inbound and outbound call-centre agents and introducing

job-relevant screening processes as the basis for hiring staff and implementing

innovative incentive packages, these centres were able to start attracting agents

who performed better, demonstrated higher commitment to the company and

provided longer service. As a result high turnover ceased to be the problem it

had been previously.

The supply side of this equation can be

fulfilled through the development of a

mapped database of job classifications

that identifies jobs by the required

knowledge and skills and identifies

participants according to their manager-

validated possession of these skills. By

using predictive modelling to forecast

future labour needs and using appropriate

technology to interpret this database,

individual skills inventories can be

matched against current and future labour

demand.

This then enables the HR function to

decide on the most suitable approach

to meeting the organisation’s labour

needs: identifying and deploying suitable

resources internally, developing existing

employees or buying in talent from the

external market.

��

The quest for talent: focusing on learning

Successful talent management extends

to a systemic approach to the way an

organisation develops its own talent. As

the IBM Global Human Capital Survey

�00� illustrates, the telecommunications

industry already places strong emphasis

on this area. The HR function should

continue to build on the prowess already

established in training and performance

management, particularly in the

operational arena.

E-learning is becoming increasingly

significant in this context. But for it to be

effective, HR needs to identify business

and performance objectives and link them

with learning tools and technologies. It

also needs to build a business case for

e-learning and develop an overall e-

learning roadmap. And it must carry

out an assessment of current training

operations, content and technology and

ensure that e-learning programmes are

integrated with these.

��

Using management development to build talent

One telecommunications company decided to use a management development

strategy to build its own talent. Its objective was to provide a management

learning programme that was flexible enough to meet the needs of highly diverse

work environments while providing a consistency of structure and content for

fundamental management skills.

To achieve this goal it developed a curriculum that blended learning from

online reference materials, coaching simulations, teaming, online facilitation,

collaboration and classroom learning. The company uses an outside provider to

manage the learning infrastructure, which includes the management of face-to-

face learning events, an e-facilitation team to manage student enquiries and a

team for overall programme administration and co-ordination.

Learning occurs in the participants’ specific business environment, where it can

be tested and applied. Because the programme delivers 7� per cent of training

online and �� per cent in a classroom, managers can devote more time to staff

and customers compared with traditional classroom-based programmes.

And the results have been notable. Since June �00�, more than �,800

managers have participated in the programme. To date it has received highly

satisfactory feedback from participants and there is evidence of a change in

management approaches.

��

Conclusion: Towards a new kind of human resources

The challenges posed to HR professionals

by the developments in the telecoms

industry are substantial. In particular HR

needs to ensure that their human capital

policies are not becoming unresponsive

in traditional satellite and wireless

businesses and that staff are motivated

and have the tools and knowledge

needed to work efficiently. They need

to ensure that the organisation has the

competencies and skills to meet both

current and future demand. And they

must ensure that the right leadership is

either developed or bought in to deliver

future strategy successfully and lead

change across the organisation.

Dynamic People Management

To meet these objectives organisations

are shifting the way they look at people

– seeing them as a strategic asset rather

than a cost. People are the competitive

difference – “the capability within”.

Companies need to take a systemic view

of their workforce and examine the variety

of levers that can improve organisational

performance. They then need to manage

people dynamically to make the most of

their human capital. This involves:

• understanding the key drivers

of workforce productivity

• designing jobs and organisation

structures that improve productivity

and manage labour costs

• acquiring the talent the

organisation needs in a timely

and cost-effective fashion

• ensuring that employees know

how to do their jobs, can use

available tools and knowledge

and receive suitable training

• measuring staff performance and

aligning it with appropriate rewards

• optimising staffing levels for both

short-term work scheduling

requirements and longer-term

workforce planning objectives

• ensuring leaders at all levels

have the skills, tools and values

to perform to their best

• creating a workplace culture

that encourages excellence,

collaboration and staff retention.

�7

Next Generation Human Resources

In many organisations, however, the

ability of the HR function to tackle these

important strategic issues is hampered

by an increasing lack of resources owing

to cost pressures and an excessive

administrative burden. In addition

HR organisations often struggle to

demonstrate the true contribution of the

programmes they initiate to the bottom

line. To be successful, HR leadership

needs to find ways of reducing the

administrative burden and develop a

results-oriented focus. It must evolve into

the Next Generation Human Resources of

the future, ready to compete successfully

in a global environment. It must:

• benchmark current operations and

offer insight into best practices

in HR service delivery

• redesign processes to leverage

leading technologies and existing

systems infrastructure

• create a measurements system

that ensures HR is focused on

the right tasks and can describe

its contribution to the business

• review outsourcing as an

alternative delivery mechanism.

It is time for telecoms CHROs to develop

a new human capital agenda that places

people at the strategic heart of the

organisation. They must connect the

investments made in employees with

performance outcomes and identify and

deploy the optimal strategies to promote

the retention of key people. In short, it is

time for the HR function to migrate from

a basic services provider to a strategic

advisor that leads the people aspects of

business transformation initiatives in their

organisation.

�8

IBM Business Consulting Services’

Human Capital Management (HCM)

focuses on helping clients improve the

value of their human capital assets to

the organisation. With more than �,000

practitioners, Human Capital Management

has a full suite of end-to-end capabilities

to address client’s challenges. Our

approach looks at four key factors:

More from People

More from People focuses on getting

the highest possible value from your

workforce while controlling your human

capital costs. We can assist you in

assessing your strategy and examining

your operations and then analysing how

your workforce implements the initiatives

that drive your business. Our analysis

provides a methodical and measurable

approach to determine the right people

strategy for your organisation. The result

is a unique combination that produces

the behaviours that drive increased

productivity and profits.

About IBM Human Capital Management

�8

�9

Better HR and HR Business Transformation

Outsourcing

Better HR is about transforming the way

that human resources works and delivers

value to the business by improving the

quality and reducing the cost of HR

processes and systems. We help clients

to design, implement and adopt the most

appropriate combination of HR service

delivery portfolios, operating models,

technologies and processes for their

organisation, either internally or through

an outsourced arrangement. This allows

the HR function to move successfully

from being a simple service provider to

a strategic advisor that is capable of

delivering Next Generation HR.

Learning and Development

This initiative inspires and equips people

in business to improve their performance,

skills and knowledge. It focuses on

improving the effectiveness and reducing

the cost of learning and development

within the organisation by assessing the

organisational approach, technology and

methods used to deliver it.

On Demand Workplace

IBM On Demand Workplace brings

together all the strands of information

that run through an enterprise in ways

that can radically change the way you

work. It helps clients achieve dramatic

improvements in efficiency, effectiveness

and innovation by integrating and

simplifying core employee work

processes.

�9

�0

Further information

To learn more about IBM Business

Consulting Human Capital Management,

consult your IBM Sales Representative or

visit ibm.com/bcs/humancapital

To find out more about The Capability

Within: The Global Human Capital Study

�00� visit ibm.com/bcs/humancapital�00�

Global

Mary Sue Rogers

Global Leader

[email protected]

+�� 0 88�� 0�8

Americas

Lisa Tondreau

Americas and US Leader

[email protected]

+� 70� �� 7��0

Asia Pacific

Bill Farrell

Asia Pacific and ANZ Leader

bill.farrell@au�.ibm.com

+ �� 9�9 787�7

IBM contacts

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A sector insight from the Global Human Capital Study 2005 · PDF file ·...

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