Callisto Grand s.r.o.
10 September 2020
18% to 20% staff attrition in Central European Shared Services has become accepted as regular business practice – it just is and that is the way it has always been.
People who have worked in SSC’s since around the year 2000 and progressing to management level face this situation every day and are expected to continuously improve.
To compound this situation, it is suggested that Gen Y or Millennials are to blame – being restless, disloyal and possessing a short attention span.
The root cause and solutions are far removed from this acceptance of 20% attrition being normal.
(Attrition statistics are an example why benchmarking is not always a good thing!)
18 % attrition is not normal and cannot possibly be part of any sustainable business model.
Let’s look at it in the reality of 50 in your team.
A 20% attrition rate means the team includes 10 people losing interest and motivation because they are leaving and 10 more that have recently joined. 20 / 50 almost half of the team.
Many of the others are not working at full performance due to shadowing the new joiners.
In theory, the entire team could be recycled twice in any 12-month period.
Thankfully, there are a number of people that do stick around for longer and develop reasonable basic knowledge.
Now examine this 20/50 scenario from the perspective of a Collections Team.
How can such a transient environment be conducive to business relationships with internal and external customers, nurture talent to reach full potential and safeguard working capital?
Is it any wonder that double figure % overdues are also largely deemed acceptable?
They don’t know what they don’t know.
The uncomfortable reality is the shortage of experience in SSC’s – managers with experience (leaders, mentors) who can challenge short termisms and show their teams a range of stimulating and challenging alternatives.
Being in one job, role or function in one company for two to five years rarely equates to being business experienced. Typically, in an SSC environment, each individual learns a narrow range of skills that are repeated. Thus, one can be called a Subject Matter Expert but only in one small skillset.
This is a major reason why talent is lost. The groundwork is done, the basics are grasped but the process orientated system stymies growth. The majority believe and are advised the limit of development in this particular area has been reached and they move on.
Those first few years are only be the beginning.
The solutions are simple. Focus here is on O2C but the same applies across all towers in SSC’s.
• Culture is essential starting with the CEO recognizing the entire O2C function being equally important as sales, production or supply chain with the corporate polices and procedures set to achieve 2.5% overdue – or lower.
This naturally drives the need to develop clearly defined career paths within SSC’s, which, if allowed to fully mature will exceed all aspirations and expectations.
Strategy and culture go hand in hand. SSC development is a rolling 3-year strategy not 3-month quarterly subservient to EBITDA.
It is a strange paradox with the same executives ensuring long term investment in R&D and production having a blind spot when it comes to the essentials of Working Capital and Cashflow.
Operational measures – DSO and % overdue absolutely. However, there are other equally important measures and analyses, frequently overlooked, indicating effective management, quality control and attention to detail throughout the organization.
Maturity measures – SSC’s aspire to be a Centre of Excellence but don’t apply a consistent methodology to map progress. (Callisto Grand CPM).
• Training – Learning and development is to be relevant to the job, designed to foster long term careers and supported by realistic budgeting and commitment from the CEO.
• Investment and empowerment – All companies agree people are the most valuable asset but is the long-term planning and commitment commensurate? Meaningful employer branding is not just flexible working, table tennis tables and chill out rooms. These will never be the ingredients to develop loyal, dedicated and successful teams.
All employees should be encouraged to participate in self-development. Digital learning, qualifications, webinars and conferences.
Time is not a reason not to; we all have the time if are supported and motivated.
Set the next budget in line with what is required and what is available in the market – not the top town Eur 200 per person take it or leave it.
Budget has to extend beyond training, it must include facility for regular customer visits, conferences and other channels of empowerment and experience.
The events of this year and the long-term effects of WFH are revealing the need for almost every company to reach out to service providers and kick off the RFI process. (Here is an opportunity for empowerment. Invite the teams to contact service providers and prepare RFI and business cases. No knowledge or experience is wasted)
Discussion is increasing in frequency and volume that specialized technology is needed to compliment the ERP. The innovations in O2C tech in recent years are dynamic and very exciting embracing AI, IA and BI.
Consider these points as you move into Q4 budget and 2021 planning season.
Setting an annual target of 2.5% will be the launchpad to embracing best practices.
Leaders break barriers
We at Callisto Grand will be delighted to advise you on how to achieve a measurable Centre of Excellence.
For more information about Callisto O2C training, digital learning, performance measures, coaching and best practice advice contact email@example.com.
Callisto Grand s.r.o,
10 September 2020