Whether you find your employees within the borders of your nation, or abroad, what matters most is finding the right talent. Companies are reconsidering their offshoring and nearshoring strategies to focus on innovation and talent, rather than just cost. With fierce competition for digital-savvy talent, and the demands for new ways of working, cost arbitrage can no longer be a corporation's sole focus.
The competition for talent and skills has surpassed the need for lower costs. These days it’s all about innovation and talent attraction. More corporations are returning to mature markets, and the trend will likely continue, especially when we consider that the notion of a traditional office space has permanently changed.
The questions are: who is available, how large is the talent pool, and what is the business environment?
Eduard van Zyl is the Head of Asia Pacific for Incendium Consulting, a corporate real estate consultancy firm, part of The Instant Group. He believes that the scales are tipping towards seeking out locations that harbor the right kind of talent. “I think the reality is that supply for talent that will keep your organisation ahead of others becomes constrained in markets where intense cost-based outsourcing has taken place in the last two decades. These markets simply cannot supply enough of the right kind of talent, especially those with digital innovation credentials. Eventually, you start running out of suitable candidates, then wages start escalating, meaning the reasons for moving there, such as cost-effectiveness, are diminished. Corporates then start looking at more developed markets, where there is a broader supply of talent, and cost becomes a secondary consideration.”
He is not alone; as Kearney revealed in their 2021 global service location index, “...the presence of concentrated, digital-savvy talent has become a potent differentiator between nations, regions, and cities vying for consideration as business-service locations.”
Olly Harris, the Global Managing Director of Page Outsourcing, sees an opportunity. “There is a war for talent,” says Harris. “The question is, where do we find them? COVID has proven that people can conduct their work outside the core location or head office without any potential negative impacts on productivity. So now we can search globally for where the talent exists.”
But do we actually need physical spaces? If we can all work from home, is there still any value in propping up brick-and-mortar locations to gather our employees? Will candidates even be willing to participate now that they know it can be done differently?
Harris argues the benefits. “While a fair amount can be done through video, Yammers, and all the other social tools out there, you cannot replace human interaction and bonding with people face-to-face.”
Van Zyl also sees the value in office location but warns of what not to do. “Candidates don’t want big campuses where you can have your clothes laundered, see a personal trainer, have breakfast, lunch, and dinner. That’s what home is for. People don’t want to live in the office. The mindset has shifted away from creating these superhubs where you can spend your life.”
So, what do they want? “It’s less and less of a workplace, more and more of a brand experience,” says van Zyl. “The workspace is a place where employees and agents come and connect with the brand and each other, to be inspired and supported. It’s about talent attraction and retention; if it’s just a drab gray production line, there are better places to be.”
Harris recognises it’s time to balance cost, quality, and resilience. “We have absolutely seen cost will always remain a key factor, but it is now being balanced alongside the availability and the quality of that talent.”
That means the expectations of an offshore or nearshore location have changed. When looking for office space, there are a few things you need to consider: your purpose for the space, its location, and how much money you're willing to invest. But there are also some newer factors to consider, like the contract's flexibility and working arrangements, as well as the space's ESG credentials. Another important factor is how the location will support a hybrid working culture. Companies must involve other teams and skillsets to make the best decisions about new offices.
The truth is that this is a complex matter, and no one person or company has all the answers. What can help is partnering up with an experienced RPO or a corporate real estate consultancy firm. An organisation like The Instant Group helps organisations to rethink their workspace strategy and connects people to spaces, while Page Outsourcing understands recruitment. “All we do is recruitment,” says Olly Harris. “We sit here with this quite incredible global lens. We see which companies retain talent. That’s what we can bring to bear. We are agile with tailor-made solutions for our clients, whatever gets thrown at us.”
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