Over the last twenty years, there has been a marked trend towards multilingual shared service centres (SSC) among organisations looking to centralise and consolidate processes by grouping comparable services from various company areas in one single location. The momentum towards this form of internal outsourcing comes from US corporates who see concentrating and standardising operational processes primarily as a cost-saving measure; in view of technological progress and the digital transformation, European companies have now adapted the model for their own needs.
Cost-savings are now only one of many advantages sought by corporates switching to SSC models, alongside centralised control and auditing, operational efficiency, standardisation of service provision, exchange of high-performing employees between country organisations, scalability, and innovation. Yet in order for SSC to live up to these expectations, the location needs to be carefully considered, and in 2018, international commercial property consultancy Cushman & Wakefield identified the location criteria which are of particular importance in SSC solutions, using them as the basis for a seven-point blueprint for SSC success.
1. Focussing on cities as hubs for language groups or linguistic regions
Language is a key factor when locating a multilingual SSC to cover a range of European territories: companies might opt to set up one SSC in Bucharest (Romania) in order to service markets in Romance languages, for instance, and another in Sofia (Bulgaria) for the Slavic languages and the German-speaking countries.
2. Carrying out a comprehensive, custom performance analysis
Each company will have its own specific requirements of an SSC solution – and these needs can be taken account of using a custom analysis of the performance of various potential locations. Key assessment criteria here include wage costs for specific profiles, the labour and recruitment market, and the city’s attractiveness as a place to live; other factors taken into consideration will vary with company-specific requirements.
3. Using synergy effects
In established SSC and business process outsourcing markets, there is, due to existing career opportunities and attractive employment conditions, strong competition for talent; this leads to synergies which can be exploited by co-locating less complex SSC operations.
4. Setting up a strong local management team and cooperating with local partners
The basis for all successful SSCs is a strong local management team which combines sound knowledge of local market conditions with a shared corporate vision in tune with that of the departments it serves. In addition, local partners are important, especially for recruiting suitable candidates for management positions.
5. Creating a recruitment plan for a continuous stream of diverse talents
Large-scale SSC solutions run on more than 150 FTE positions, which in turn requires a continuous recruitment effort in order to avoid bottlenecks in the flow of qualified personnel: the pipeline of candidates must never be allowed to run dry. This is easier said than done when some of the profiles require candidates with strong knowledge of niche languages, and HR planning cycles lasting up to six months including relocation are by no means unusual. Nevertheless, thanks to the free movement of labour and the willingness of many talented employees to move, there is no fundamental problem in recruiting across the EU27.
6. Building a high-performance HR team
In an environment in which the fight for good workers is getting harder, the SSC HR team must develop a strategy which focusses on acquiring and retaining talent. Ways of stopping employees from going elsewhere are often tried-and-tested: internal training offers, communal activities for staff in their free time, career progression, an attractive working environment, etc.
7. Selecting the specific location with care
Beyond choosing a country or city, situating an SSC is also a matter of getting the location right within the city selected. What has become clear is that students and young professionals choose their employers in no small part based on where in their city they are sited, meaning that a location which is both easy to reach and offers plenty of potential after-work activities is key.
For SSCs to fulfil their potential, the location simply has to be right: SSC solutions require highly-qualified staff who are being targeted by other employers, meaning that both the macro and micro-location should be chosen with due care in order to be close to potential workers so that it can attract and retain them.
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