Make purpose your anchor in these uncertain times

Everything we once knew as stable is under assault, and that’s the number one reason so many of us feel jaded. When there is so much uncertainty, it’s impossible to forecast more than a few months into the future. It’s challenging to make long-term plans—for ourselves and our organizations.

We face multiple macroeconomic headwinds driven by the war in Ukraine and the release of pent-up post-COVID demand. HFS has found that 7 in 10 employees are ready to jump ship. Our research also reveals maturity in automation remains low despite a new surge in investment. Yet, even amid all this turbulence, there is a route to success if we focus on building deeper and more mature, purpose-led relationships between service providers and enterprises and with our employees.

HFS CEO and Chief Analyst Phil Fersht laid out the threats and the road ahead for enterprise leaders in his opening keynote speech at the 2022 HFS Super Summit in New York. Revealing fresh HFS research, he discussed the macroeconomic factors giving enterprise leaders the most significant concerns: cybersecurity and privacy, inflation, and disruption to supply chains. With the chips down, enterprises are placing their bets on automation.

Investment in automation is the top initiative, but maturity is low

“Improving automation” and “leveraging new emerging technologies” have become the top investment initiatives among Global 2000 enterprise leaders in Exhibit 1, despite the C-suite indicating that environmental sustainability and governance, and security, privacy, and regulatory compliance were two of the three most important items on their agenda. It’s been a decade since HFS introduced the term “RPA” to the world, but the renewed focus for automation investment is in relatively immature approaches to automation.

Exhibit 1: Security and privacy, Digital modernization, and Environmental sustainability and governance, are the main leadership issues, but automation and emerging tech are where enterprises are making investments

Sample: n= 602 executives in Global 2000 companies
Source: HFS Research, 2022

We found that 67% of enterprises in Exhibit 2 see themselves as automation beginners. The gap between automation ambitions and capabilities is a story of skills, talent acquisition, and talent retention. Leaders who cannot attract and retain automation talent, including those able to think of the wisest ways to apply automation for the greatest business benefit, will fall behind.

Exhibit 2: We are only just getting started with automation; nearly 70% of enterprises rate themselves as “automation beginners”

Sample: n= 511 executives in Global 2000 companies
Source: HFS Research, 2022

HFS data shows hiring quality staff, retaining them, and a lack of centralized data governance across the organization make up the top three internal challenges enterprises face. Our research also reveals what employees are looking for from their jobs: providing guidance on how enterprises and service providers must respond to enjoy more success in the battle for talent.

Fersht declared, “Talent winners are going to steal their markets.”

7 in 10 employees are ready to leave—they want challenge, flexibility, and purpose

Exhibit 3 offers guidance on how to win the battle for talent. Employees want new challenges, and they see roles in alternative companies as interchangeable; they are ready to switch from one to another for a 30% pay rise. These are passionate people who want to make a difference and see opportunities to do so in their work with clients. Employers must tap into that passion and meet their need for a challenge.

To succeed in this environment, employers must offer employees a clear purpose, flexibility, and more responsibility, tapping into the desires of GenZ and GenX employees. Our research among 1,800 employees working in leading IT and business services providers found that GenZ (younger recruits aged 18-25) want to work for start-ups. More experienced, high-skilled GenX employees (aged 50+) want to run their own businesses. Employers must take note and provide more of what the start-up life and business ownership deliver—such as shared purpose, rewards, responsibility, and variety—or risk losing vast swathes of their teams. Our data shows that 7 in 10 global employees are prepared to leave for a new job should the right opportunity present itself in the next 12 months.

Exhibit 3: Employees feel under-challenged and are ready to jump ship, but they do see potential and are passionate about making a difference

Sample: N= 1,800 employees across leading IT/business service providers
Source: HFS Research, 2022

Embedded relationships offer employees the sense of ownership they seek

Fersht believes service providers can provide exactly the challenge, sense of the problem, and outcome ownership that employees demand. He played a Steve Jobs quote emphasizing the learning opportunity for those who own what they recommend, execute it, and experience the results of implementation over the long term. Service providers’ embedded relationships enable that and should be encouraging for the industry, said Fersht.

Just as employees need a sense of shared ownership to give more purpose to their work, we see a need for service providers to evolve from the simple delivery of effort to more mature and deeper relationships with their enterprise partners. Exhibit 4 shows the emerging third evolution of services to Stage 3, “Purpose,” in which both client and supplier share a common purpose, focusing on driving shared outcomes for both parties.

Exhibit 4: Service Providers must move on swiftly from Stage 1, “Effort,” through Stage 2, “Performance,” to Stage 3, “Purpose,” to break the cycle of diminishing returns

Source: HFS Research, 2022

The Bottom Line: By shifting to Stage 3, “Purpose,” service providers can win the war for talent—and steal their markets.

Service providers must move beyond a time-and-material model toward deeper, higher-value relationships with their enterprise partners, focused on shared purpose and outcomes. In doing so, they could not only add more value to their relationships but also win their talent war—and with that, their markets—by providing employees with a stronger connection to the meaning of their work through engagement in the whole delivery lifecycle.