You may have heard about a “looming talent war” in field services, but what exactly does that mean? Unemployment has been at a steady decline over the last 8 years in the United States, with job openings increasing. According to the U.S. Bureau of Labor, there is a less than 1:1 ratio of available workers for every job opening. For the field services workforce, 40% of field service engineers in the U.S. and Canada are over 50 years old and are gearing up for either a change in the type of work they do or for retirement. These are the skilled workers who have been in the industry the longest, know the ins and outs of the hardware they’re servicing, and have years of experience in the field that you just can’t teach a new hire within mere months.
Adding to the tight labor market is that 4/10 field services organizations are forecasting a net hiring increase of 3% or more over the next 12 months. The harsh reality is that even with a 1:1 ratio of available workers to jobs, many of those available workers don’t have the right skills, and the ones that do are already in that aging demographic. So, where are you going to find employees? From other field services orgs. In this post, I’m going to talk about what you need to have in your playbook to win the field services talent war.
Say you’re lucky enough to land that new hire. The median tenure in current jobs has been going down for the last 4-6 years across all age groups. In fact, it’s estimated that millennials will hold anywhere between 15-20 jobs in their career. The days of working for one company for life are gone, so now it’s time to dust off the old field service talent management book!
Amid the struggle to find and retain skilled talent, field services orgs need to continue delivering today’s business while building for tomorrow. After all, customers don’t care whether or not you can fill your job openings or need to train new techs. As far as they’re concerned, they paid for a service contract and expect that obligation to be satisfactorily met. Any change that you implement that impacts the customer-facing part of your business, and by extension your revenue stream, absolutely must be well thought out. To that end, TSIA has developed a framework for bringing your field services talent up to speed for execs to follow that I call the 4 R’s:
We know there are skills gaps occurring all across the tech industry, but it’s really magnified in field services due to the simultaneous change in the nature of the work these engineers have to do. Traditional field services in level 1 and level 2 supplier models have historically been very focused on hardware, while the future focuses on adoption of the technology and helping customers achieve their business outcomes.
That said, the required skills for field service engineers are changing from technical skills to business skills, from troubleshooting hardware/software to troubleshooting the business process, from a focus on the product to a focus on the senior executive. Also, instead of just fixing just what’s wrong with the hardware, they need to understand what “right” looks for the customer and their unique install environment. These skills are so important that training for soft skills is the #1 priority for talent development in 2018.
Soft skills–which are needed to effectively communicate, problem solve, collaborate, and organize–are becoming more important for success as the workplace evolves socially and technologically.
Society for Human Resource Management (SHRM)
This is a huge shift for field services orgs, who generally spend about 70% of training days on technical skills alone. To put that into perspective, industry pacesetters are investing in 15 days of training in total and doubling the number of days dedicated to soft skills than the industry at large.
While you’re reskilling your workforce for the needs of tomorrow, this means you’ll also have to make structural changes to your current field services job classifications, field service engineers, and support the changes necessary for them to succeed in the future. Whereas incident management and technical competency will still be the basis of the job, certification programs and additional training can be used to enhance higher job classifications. For instance, providing an optional advanced skills certification program related to business process improvement can help engineers describe what “right” looks like. Providing certifications/training for “expand selling skills” can lead to additional service revenue for the company and compensation for the field service engineer. These are the soft skills that I talked about in the “Reskill” section.
Historically, the concept of “restructuring” referred to layoffs, but there’s a couple things that’s making this a little more complicated. As mentioned, the nature of the work is changing, customer demand is changing, and new skill sets are required. Not everybody who is in your field services workforce today is going to have what it takes to get the other side of these changes. Here’s an example of how Hitachi dealt with this issue at their organization:
Like at any company that sells and services hardware, the Product team looked to automate low-value added activities in order to eliminate the need for on-site repair altogether, lessening the number of field services engineers needed to meet those commitments. Next, they outsourced some of the field work to independent service providers, which also lessened demand for direct field services engineers.
This freed the employees that had the more specialized skill sets from having to do simple, low value-added work, allowing them more time to focus their expertise on complex break/fix and the more difficult installations. The best of the best were then given additional training to staff a brand new field solutions engineering position, which was self-funded. This is a great story— Hitachi restructured their workforce, addressed higher complexity installations, and delivered higher value-added services which they were able to staff and self-fund. The bottom line to this story is that if you simply follow the old restructure playbook, you can overshoot your objective and find it even more difficult to recruit new techs into your company.
A few short years ago, companies had a misguided attitude that employees should be thankful that they even had a job. Skilled workers have options now, and if you want to be effective in recruiting, you have to have a plan, a big part of which is knowing how you compare to your competition.
At TSIA, we conduct an annual Workforce Optimization and Compensation study where we look at workforce practices, base pay, variable compensation, incentive compensation, which we do on a global basis across all regions. If you’re a member of our Field Services practice, you can get a detailed look at trends across the industry so you can make sure you’re offering potential employees the right incentive to stay in a way that’s comparable with pacesetters.
Generally speaking, however, it’s important to understand that these 4 R’s are about what you need just to compete and are foundational. But remember that a talent war like this gives skilled employees the pick of the litter with regards to who they want to work for. It’s up to you as an organization to make sure that you are offering a culture that aligns with what are arguably the three most important elements skilled talent looks for, the 3 C’s:
Be sure to listen to my on-demand webinar, “Winning the Field Services Talent War”, where you’ll hear even more detail about the concepts in this blog, including more details about the 3 C’s employees look for in an employer. Finding skilled workers is a need that impacts the technology and services industry as a whole, so there is a lot of relevant insight to be gained by listening. I also encourage you to reach out to TSIA today to learn more about how we are helping companies like yours improve and optimize their operation, whether it's at the employee level or with your customers.
Editor's Note: This blog has been updated to reflect current information 12/17/2018
Post Date: September 4, 2018
Vele Galovski is vice president of research, Field Services, for TSIA. Using his nearly 30 years of industry experience, he has consistently helped companies both large and small drive double-digit top-line growth with a proven retain, gain, and grow strategy. Vele has also written a book, The Perpetual Innovation Machine, which describes a holistic approach to management based on ambitious goal setting, data driven analysis, skillful prioritization, inspiring leadership, and the lost art of employee engagement.
The Technology Services Industry Association (TSIA) is dedicated to helping services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.