Bruce Morton: Allegis Global Solutions (AGS) presents the Subject to Talent podcast, a hub for global workforce leaders to unleash the power of human enterprise. Thank you for listening in as we explore the most innovative and transformational topics impacting business today.
Hi, I'm Bruce Morton, the host of AGS’ Subject to Talent podcast. Today, I'm handing over the microphone to my good friend and colleague, Ayman Hamid. Ayman is an experienced staffing industry executive with over 25 years in human capital management. He currently serves as an executive director in the global business services unit of AGS, overseeing nine global delivery centers all over the world. Ayman is joined by AGS Head of Global Client Development Naveen Mascreen to discuss the impact of global talent expansion for companies looking to stay competitive in their market. Let's listen in.
Ayman Hamid: Hey, thanks Bruce for passing the microphone. I'm looking forward to the conversation today. Hello, everyone. I'm Ayman Hamid, Executive Director of Global Business Services at AGS. Joining me today is Naveen Mascreen, the head of Global Client Development. He has over 20 years of experience in human capital management, advising customers and enabling them to leverage and optimize their outsourced external workforce to support business outcomes. He's currently responsible for advising and helping AGS' North American customers expand into global markets across Asia, EMEA and Latin America. He specializes in contingent workforce outsourcing solutions and has set up led and delivered dozens of programs across various sizes and industry segments. Naveen, welcome and thank you for joining us today.
Naveen Mascreen: Thank you, Ayman. It's great to join you on this podcast. Thank you for having me. Like most folks in our industry, my entry into the talent solutions industry was per chance. I started my career fresh out of business school in the insurance industry as a part of the group and alternate function, and I quickly realized that I was probably more cut out for the B2B type of industries. Recruiting, staffing, talent services never crossed my mind as it was, unfortunately, not an aspirational or go-to industry for a long-term career in the world that I lived in.
But I was determined to get back to B2B and when I was just discussing this with my dad, he suggested that I update my resume, spruce it up a bit, and do the groundwork of walking into a host of recruiting companies offices, and handing over my resume to them in the hope that they could potentially help me find a suitable opportunity, which I promptly did. But since I insurance, I went in with the mindset of landing in a similar role within the financial services industry.
After briefly interviewing with the recruiter at one of those firms, he suggested that I be open to other industry avenues and interview for a business development role with them instead, which I did and landed the job within 48 hours. I worked there for about two years, loved what I learned and the experience I gained before the ‘let's explore something new’ bug bit me again. After a short detour into corporate real estate, I realized that solutions industry never left me, and there was unfinished business. So, I properly landed my next opportunity back into the home turf.
What I loved, and continue to love, about this industry, altruistically, is not only about helping find great talent for our customers, but more so the opportunity to help people find gainful careers and impacting their lives and their families in a positive direction. That was motivation enough to stay in this industry ever since.
I kept moving up the talent solutions value chain, and I have had the privilege of being one of the early movers in the managed service provider (MSP) industry in emerging markets in Asia, and now two decades later, of which the last rewarding six years have been with AGS, I have the privilege and responsibility of advising and expanding our customer engagements from North America globally into Asia, EMEA, and Latin America, and helping them find talent across the world.
Ayman Hamid: Great. Thanks, Naveen. Your story is like so many others, so many of us fell into this industry, but as we think about today, and we're going to talk about the global workforce expansion, could you provide a brief overview of what that actually means?
Naveen Mascreen: Absolutely. We're witnessing the proverbial talent shortage in more mature and saturated markets. And the past few years have been a penny drop moment for organizations around their expectations of where their talent can be. That has opened up avenues and possibilities of tapping into markets beyond the mature countries, and executives have had no choice but to let go of long-held beliefs and quickly conceive of a new way forward. Expanding your workforce globally can open access to new talent pools to help you tap into lucrative intellectual capital, support retention efforts with employees and grow the organization of the future.
For example, large multinational companies headquartered in US, UK or other large European and Asian countries have extensively leveraged India, Philippines, Poland, Hungary, Costa Rica and Mexico to set up their global capability centers to tap into local talent and intellectual capital; to build out their technology back office, R&D centers, finance back offices, global sourcing, centers of excellence, and customer and technical support. That had started off as a cost arbitrage player in the early days, but now it's not just that anymore, because now the game is elevated.
Now, it's about how do these centers help organizations’ go-to-market strategy? How has it elevated their talent strategy and in their ability to build repeatable and robust processes and also be a source of product development, ideation and innovation? Global companies are going into markets that have been traditionally uncharted territories, namely, case in point, Africa. In an insightful blog post and also a recent podcast, my colleague and good friend Rob Marley, who is AGS's executive director of EMEA, speaks about the next wave of growth in Africa.
Despite their unique geopolitical circumstances, countries like Egypt, Nigeria, South Africa, Kenya, et cetera, are upcoming tech hub hotspots with growing economic indicators that every major organization should pay attention to. And if my crystal ball view is anything to go by, this is going to be the next massive wave of growth waiting to happen.
So when any organization looks at how do they go beyond borders to get the right talent and the right ideas and the right intellectual capital to build and grow a sustainable organization in the future, I think that's kind of where the genesis of expanding your global workforce really necessitates from.
Ayman Hamid: Great. Thanks, Naveen. There's a lot of buzzwords out there as it relates to outsourcing. So first, can we demystify the shoring types near, off, out, on, re, they all refer to the process of outsourcing of a company transferring different segments or services of their business to another company or their own entity in another location for reasons such as cost arbitrage, access to talent, access to intellectual capability, talent strategy, just to name a few, but do you mind going into what each of these means?
Naveen Mascreen: Yeah. Absolutely, Ayman. Firstly, with offshoring, for example, the operational activities are moved to another country and the geographical location frankly is quite irrelevant. Offshoring can be divided into two subgroups. So, there's the nearshoring, which means it's in neighboring countries, a country without a shared border or far shoring where it's a distant country, maybe like Southeast Asia or Latin America, any of those depending on where the geographical headquarters of the particular company is.
Offshoring is usually used to employ resources at a much more effective cost structure and cost base, in comparison. However, its success is subject to many requirements and one of which is regards to culture and communications. The other one could be their whole technology infrastructure. It could be about the linguistic and technical capabilities, and also time zone constraints. So, they usually end up choosing nearshore as an alternative, because it's just a lot more manageable from that perspective.
Now when it comes down to nearshoring, it's the outsourcing of business processes, especially IT processes to companies in a nearby country or the ones sharing a border with a target country, therefore opposed to far shoring, it can be quite a special form of outshoring. For example, for a company based in Germany, typically, nearshoring locations, maybe Poland, Czech Republic, Slovakia and Slovenia.
Therefore, it offers optimum solutions for companies that want to outsource processes in order for them to maximize their business efficiency, but also reduce the barriers that are created by traditional offshoring models. And compared to offshoring, the benefits are, for example, no or little time shift as well as cultural differences, easier communication due to good language skills and fast but cost-effective travel.
Then there's the onshoring, which is the exact opposite of offshoring, which refers to the relocation of business services processes or manufacturing to a lower cost location inside the national borders. Functions and processes are often located to a nearby location, which is often the case with very big customers. There are many parts of the US which are lower in cost when it comes to talent availability in comparison to the coastal areas of the US, for example. Even in Europe, there are lower cost countries in comparison to UK or France or Germany.
There are the Eastern European countries who offer this ability. Same is the case. We can take examples of Asia, Africa, Latin America and they all kind of fall in the same context. Now, what happens with this is it creates, or allows the business to provide, the quickest possible service tailored to suit the market needs. There are supply chain advantages that they gain. There is employment generation. There are more markets that they can access to as far as their own country and geography is concerned because they understand their nuances better than an offshore destination. There are some companies, for example, manufacturing automobiles is one, where we can say that it has its benefits of onshoring.
Now, the last one, and an interesting one, is reshoring, which is also onshoring, but it's the returning of production or development of goods and services back into the company's original country or the base country that it is located in. That helps keep IP within the country, boost local businesses, reduce unemployment, and balance trade deficit. Companies can adopt different strategies based on the industry that they come from, the market need, the business prerogatives and the organizational strategies. Each of these outsourcing options has advantages and drawbacks. So trying to create a universal or a boilerplate recommendation on which one is better than the other in a very broad context may not be a fair ask, and it also depends on various influencing factors and what the customer's outcomes are as far as their strategy is concerned.
Ayman Hamid: Oh, fantastic. Thanks, Naveen. That's actually a great lead into my next question. You've done a nice job of sharing the definitions of onshoring, offshoring, reshoring, but when should a company consider globalizing their workforce strategy? Are there certain milestones or signs that leadership should be looking out for? How would you recommend they go about this?
Naveen Mascreen: I think when a company decides to go global, it's predominantly for a couple of reasons. One is they want their goods or services to penetrate into that market, or they want to access the talent pools, the capability and the resources. Or they acquire a company in another country to make an entry into that market. So, in any of these circumstances, the one thing that is critical for organizations to consider entering a market is just the starting point. But there are so many other nuances that play into that entire decision, especially as it relates to their workforce strategy.
Is that particular market going to be able to supplement the global workforce that they have, or is it just going to be another set of repeatable skills that country is going to provide? Is the technology infrastructure going to be able to support this expansion and growth? What markets are good for financial services, for example? India is a great example of financial services back office. Is there another market that's great for customer service and tech support back office? Philippines is a great one. In Europe, you have Poland, you have Krakow, which are pretty popular hubs for technology support and finance back office as well.
Now, when you look at these markets, it's about what those countries' talent pool really looks like. What are those universities generating? What is the educational system that therefore helps generate a certain type of talent pool for that particular market? So I think trying to understand what they're looking at achieving in that particular market, whether it's a full-blown entry strategy, they want to be there, they want to contribute to the economy, they want that to be a significant market for them, or if it's going to be just an offshoring, outsourcing cost arbitrage play to be able to access that talent pool and intellectual capital, that's a key consideration. And the risks associated with that, of course, need to be factored in as it relates to data privacy, for example.
Everyone would love to expand to different countries. But now, in this current scheme of things and the world we are in, everyone's about protecting their own country's interests, their national borders, the data that sits within their boundaries. Laws are tightening up. Therefore, does there have to be a decision point where they need to set up something locally that is quite independent of the mothership, or is there a possibility of blending both? Those are some key considerations I think that executives are thinking through and making as it relates to the growth in their organization.
Ayman Hamid: Thanks, Naveen. You've shared a lot of information on what seems to be relatively well-known offshoring locations, but if you could think about the future, are there any thoughts on what talent hotspots will emerge over the next five or 10 years?
Naveen Mascreen: Yeah, absolutely Ayman, so if I would kind of sum it up together, I think when it comes to roles related to customer support and PPO, type roles, I think Philippines is a great location. It's already proved to be and will continue to hold fort there. As it relates to technology services, R&D and product development, I think India is ruling the roost right now. It is kind of called the tech hub of the world for a reason. Manufacturing, I think, would still heavily be seen in China, Taiwan, Malaysia, some of those Southeast Asian countries. When you talk about technical and IT sales, Poland, Hungary and Czech Republic are key hotspots to watch out for in EMEA. As far as life sciences, light industrial is concerned, Latin America is turning out to be, even as I speak to a couple of our customers, a hotspot. I would say the next five to 10 years, these markets will continue to grow in these spaces. Not to say that they will not have other services that they will specialize in, but these would be probably their key strengths.
Ayman Hamid: Great. Thanks, Naveen. You mentioned a number of countries there, and it feels like with any topic that we're on, people are always looking for what's next. If you could take your crystal ball out over the next five to 10 years, are there any emerging markets that you think may be out there that we're not paying attention to our clients or not paying attention to today?
Naveen Mascreen: Absolutely. I would probably break that down into four pockets, just some work that's already begun there. Some of the companies have started entering these markets or already have a presence, but the potential is still largely untapped. And I see that from the next five to 10 years perspective, some of the Southeast Asian markets, namely Vietnam, Thailand, Indonesia, and even markets as you go to Europe, you're talking about Lithuania and Slovakia, Slovenia, down to quite a few African countries that I already listed about and into LATAM [Latin America]. I feel that companies are beginning to, baby steps, focus on exploring and engaging with these markets. And I feel, from a crystal ball view perspective, if I could say the African and Latin American continents (are the places) to watch out for over the next 10 to 15 years, because all these regions have a cycle. The first wave was the wave of Europe, then there's the wave of North America, then there's the wave of Asia, and now these are the two continents that probably are going to see the next phase of growth. It's not just about financial resources or technology, it's about the fact that these countries are rich with natural resources, just circumstantially. They're at a spot right now where they're developing and growing and evolving, but we feel that our customers already have begun to wake up around this, and we are also advising them on the potential power of expanding into these markets of the future.
Ayman Hamid: Great. Thanks, Naveen. It's quite interesting where the workforce of tomorrow will end up. I appreciate you sharing all that you have. As we wrap up today, for our listeners, what should they do if they want to learn more about expanding global workforce opportunities? Do they reach out to you? Can they reach out to AGS? What would you recommend?
Naveen Mascreen: Yeah, absolutely. AGS on its website already has for those folks who are curious to understand where we are and what we can do and where we can help our customers expand internationally, that's a good starting point.
Ayman Hamid: Great. Naveen, thanks so much for joining us today. You've shared quite a bit of information, and I'm sure our listeners will find plenty within all that you've said to help them on their journey as they look for expanding their global workforce. Thanks for joining today.
Naveen Mascreen: Thank you, Ayman.
Bruce Morton: If you enjoyed this episode, please rate and review us on Apple Podcasts, Spotify, or wherever you get your podcasts. And if you have questions, send them to SubjectToTalent@AllegisGlobalSolutions.com. Follow us on LinkedIn with #SubjectToTalent and learn more about AGS at AllegisGlobalSolutions.com where you can subscribe to receive additional workforce insights. Until next time, cheers.