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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
Blank Not far at all
Getting Started Doing Alright Getting There Have Arrived
Telecommunications All other industries
Sour
ce: I
BM G
loba
l Hum
an C
apita
l Stu
dy 2
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
Blank Not far at all
Blank Not far at all
Getting Started Doing Alright Getting There Have Arrived
Telecommunications All other industries
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.”
Telecommunications company, North America
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
Blank Not far at all
Blank Not far at all
Getting Started Doing Alright Getting There Have Arrived
Telecommunications All other industries
Sour
ce: I
BM G
loba
l Hum
an C
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.”
Telecommunications company, North America
�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.”
Telecommunications company, North America
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
Blank Not far at all
Blank Not far at all
Getting Started Doing Alright Getting There Have Arrived
Telecommunications All other industries
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’
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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
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the highest possible value from your
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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
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�9
�0
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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�
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