Internet guru Mary Meeker calls them “company pain points” in her latest Internet trends report. The venture capitalist firm, New Enterprise Associates, calls them “last mile” processes.
What are they? They are the hard to automate business processes of managing far flung workforces. Think payroll, benefits and talent mobility.
Now, a new band of tech startups are finally tackling these fragmented cost centers with software solutions that deliver the return on investment that has never been there before. Instead, companies have often outsourced these tasks to firms that have little reason to innovate and all kinds of incentives to maintain, but not reduce, costs.
The software-as-a-service startups are getting big traction. Zenefits, which hits on payroll and benefits, was valued at $4.5 billion in May after just two years. GuideSpark, which produces HR video content, was recently No. 88 on Forbes’ Top 100 List of Most Promising Companies.
To see just how ugly some of these last mile business processes can be, one need look no further than the way companies move their employees around the world in the $150 billion talent mobility industry.
The average international employee move will involve a dozen vendors, including shipping vendors, travel agents, real estate firms, and others. One move of an employee and their family may involve payments to 15 companies or people. At the company moving the employee, the process will typically involve 10 people from different departments, including finance, human resources and legal.
All of those moving parts—and the involvement of different cost centers within a company—can make it very hard for companies to even know exactly how much they spend on an employee move.
Almost nine of ten companies plan to increase the number of employees they relocate for work this year and next, a 2014 PwC survey of 193 U.S. and international companies indicated.
Yet 31% of those companies didn’t even know how many of their employees worked abroad each year. Only 8% said they could accurately quantify the total costs of their mobility programs and only 8% said they had a sophisticated global mobility program.
Cloud-based software is bringing down the costs and integration requirements to automate processes in the talent mobility industry. Rather than have mobility cost data in multiple places, for instance, new software can centralize data, make it easier to search, analyze and share – and more secure too. That can make for better-cost estimates, cost comparisons and faster payments.
Not only will companies save money by automating this last mile process, but they’ll end up with more productive workforces and work flows. Data compiled from our customers has shown that employees can spend 130 hours of work time organizing their move if given a lump sum payment to make the move happen. Losing that much time is a drain on company productivity.
Having a seamless global talent mobility program will also help companies retain and attract talent as the global talent war, especially for engineers and other science and technology workers, ramps up.
According to PwC research, 63% of CEOs are concerned about the availability of key skills. The intensity of the competition was highlighted in a recent Bloomberg story titled: “Alibaba Wages Global Talent War for Elite MBAs.” The story noted that the Chinese e-commerce behemoth had just launched a new effort to recruit and train North American talent.
With its global presence, Alibaba will hit a recruitment vein that may play well with U.S. Millennials. Nine of ten Millennial workers expect to live and work abroad at some point, research shows. Yet a recent Deloitte survey found a gap between the skills that college-graduated Millennials possess and what companies need. One solution? Move Millennials to build needed skills abroad, says Josh Bersin, principal of Bersin by Deloitte.
Those companies who will excel in an increasingly global economy will move global talent at a moment’s notice, and then retain and continue to develop that talent.