HR and Homeshoring

As reported by Businessweek, Dell has some serious problems with customers service, in particular, making callers wait and then transferring them.  The solution Dell is coming up with comes from the factory floor: they plan to make call center reps hyper-specialized in a given area.   Read more about in the Dell section in the above linked article.

I think homeshoring has more potential here.  First of all, a major reason for crappy customer service if the low-quality of the workforce.  So you have to improve that first.  how do you do that?  Two ways, by paying them more and making Dell a more attractive place to work.  Nothing of the sort was mentioned in the above article, which makes me seriously doubt Dell's commitment to improving customer service, then again, this doesn't necessarily bode ill for Dell since it's competitors aren't rushing to make serious improvements in customer service.

Homeshoring offers a serious solution because it can keep cost constant (assuming all of the gains from cutting back on office space go to higher salaries, otherwise costs are actually reduced).  It offers a much more attractive employment option than being herded into call center cubicle farms every day.  Furthermore, it make it easier to find emergency replacements in the event of a surge in call center activity.  It also would allow Dell to take advantage of low-cost-of-living parts of the country without having to set up a whole office there.

When will major corporations realize the benefits of homeshoring?  When they start feeling pressure from their competitors, which lead to an increase in the share price of their competitors and a decline in their own share price. 

The VA has banned employee-owned and cut back on its work-at-home programs, according to this article on govexec.com.  In light of the recent stealing of VA data from the home of an employee, this is the right thing to do for the time being.  Obviously, the VA needs to go back to the drawing board and redesign its telework programs to provide more data security.

Although I am a huge proponent of home-based employment, I believe such employment has to be built on firm foundation of security and accountability.  Indeed, the lack of adequate security and accountability measures is one of the reasons I believe home-based employment has not taken off.  There are no longer serious technical problems with these two issues.  The biggest problem is a lack of management leadership to make the changes necessary to ensure security and accountability.  To ensure security, management will have to familiarize themselves with the recent advances in internet security and make sure that they are properly implemented.  To ensure accountability, management must make the even bigger change of implementing compensation programs that are based more on pay for performance and less on a flat, fixed, and ever-increasing salary.  Without leadership on these two issues telework and homeshoring will never have the potentially revolutionary impact they are capable of.

This is the title of a new campaign by the Telework Exchange.  The campaign's purpose is to "promote the value of telecommuting in the federal government" according to this article in the Washington Business Journal.  Of course, the article cites the usual statistics associated with working from home, focusing on the benefits of eliminating a daily commute.  I think it is a good idea and I wish them the best of luck in an effort that should not only help the federal gov. cut costs, but also improve employee engagement, and have a positive effect on the local environment.

It is a good strategy to get the public and managers to focus on the concrete benefits of working at home.  Once public interest is drummed up, any telework campaign should start to focus on ways in which working from home can actually increase employee productivity and work quality.  Of course, these improvements come about only if management systems are adjusted accordingly, in particular by increasing the focus on pay for performance.  This is necessary to avoid the very real potential for massive employee shirking that working at home invites.

Yes, according to at least one expert.  In this Federal Computer Week article, Wendell Joice, governmentwide telework team leader at the General Services Administration, says "“Managers love to hate these programs".  However, its a little more problematic than that as pointed out by Jack Penkoske in the same article, director of manpower, personnel and security at the Defense Information Security Agency.  Mr. Penkoske wisely suggests changing performance management systems to focus on results, thereby encouraging federal managers to take telework and continuity of operations programs seriously.

Unfortunately, this is idea is unlikely to be implemented in an effective or timely manner simply because there are so few incentives for federal managers in the first place.  This is caused by a system that attracts those who seek security over high compensation.  Federal mangers are paid considerably less than their private sector counterparts, but have considerably more job security.  This setup inevitably leads to a situation where any type of effective change is virtually doomed until the current generation of federal mangers retires.

The US federal government desparately needs to embrace telework if for no other reason than to prepare for a disaster that prevents workers from coming to work. Yet, thanks to the perverse incentives of federal employment, the private sector will beat them in the effort to implement broad-based telework operations.

Maybe the real purpose is to force out workers.  Not necessarily the best way to do it though, besides being pathetically dishonest.

This could be a watershed event for at home workers.  In a positive way.  How so?  I think there is a good chance that it will fail miserably.  HP has now put itself on the map as the "anti-telecommuting" firm right when labor markets are tightening and workers are more sensitive than ever to tightening commuting budgets thanks to pricey gas.

Well, maybe there is a brilliant reason for this moce.  From what I can gather CIO Randy Mott's main objective is to encourage less experienced employees to learn from more experienced ones.  Hmmmm.  So basically people who have been enjoying a flexible work/life balance are being forced to give that up so that they can spend more of their time training their replacements?  Somehow this does not strike me as a brilliant talent management move.   Oh, and their disposable income will decrease because they now have to commute to work.

Mott has achieved success at Wal-Mart and Dell.  However, how much of that was a matter of being in the right place at the right time? 

The main problem with this strategy is that it will discourage the very workers that HP needs to retain and attract in order to make the strategy work, namely experienced workers.  Also, it really begs the question as to why HP's internal training is so crappy that they have to take time away from productive employees to have them train unproductive ones.  This style of socialism didn't work in the USSR and it won't work at HP.  Fortunately, for HP's workers their option is simple: just jump ship and land a nice job elsewhere.  As of yet Mr. Mott has no plans to establish gulags for workers who don't buy into the "train the mediocre" idea. 

According to a 2005 study by Business & Legal Reports, only 5% of companies surveyed allow telecommuting(see bottom part of this article).

I expect this to change even as gas prices decline.  First of all, the survey was done in 2005, so already there is a lag.  I am guessing that work-from-home alternatives are being seriously discussed in corporate HQs as a result of high gas prices AND the perceived skilled labor shortage that is right around the corner (due in large part to retiring boomers).  However, broad-based action has yet to be taken. I am guessing we will see real moves towards homershoing and telework in the next 12-24 months as executives realize that it not only helps reduce employees' commuting cost (and thereby raise their disposable income), but it also can improve productivity and lower the the cost companies spend on office space.

A very well-written article in Businessweek discusses IBM's global reorganization designed to lower cost while improving service levels.  It is basically an attempt to integrate IBM's service "supply chain" in such a way that teams with members around the world can be structured quickly while delivering the right mix of low costs and quality service to clients.

Fortunately, the article did not focus exclusively on IBM's efforts in other countries but also decribed how this reorganization is changing the structure of its workforce in the US.  One thing I found lacking in IBM's strategy is any mention of exploiting the homeshoring trend.  IBM's reorganization effort is perfectly suited to take advantage of the lower costs and higher quality associated with homeshoring.  IBM is smartly setting up its operations so that it can function as a "virtual factory" for tech services.  This means team can be designed in such a way that different parts of a project are worked on either simultaneously or in parellel at different IBM office locations.  Of course, it is not hard to extend this design to a homeshoring model where employees will work on projects from their homes.  The biggest question has to do with security (which hopefully a company of IBM's stature will find relatively straighforward to handle, if not I fear for their clients who are seeking IBM's advice on technology issues).

There has been much talk recently in the financial markets about the "inflation threat."  For the last few years I thought that we were going to witness high inflation due to all of the money the Fed was printing.  However, I waited and waited.  And waited.  And nothing happened.  So what's going on with inflation and what does homeshoring have to do with it.

I think inflation is not going to be a significant issue because globalization, technology, and more demanding financial markets are not going to allow companies to raise prices (and thereby lose their market share and destroy shareholder value).  Homeshoring and related trends will help companies keep cost under control while still making productivity improvements - in other word getting a lot more bang for the buck.  This will be one way among many that consumer prices will be kept under control.

was given by AlpineAccess CEO in last June's issue of Cusomer Interaction Solutions:

"It is important that the company [that engages in home-shoring] has solid processes, specifically designed to identify those candidate characteristics that will lead to outstanding performance. Once on board, those agents expect a professional and efficient operation, with appropriate training, communications and support. The company that can meet all of those expectations will be rewarded with an agent workforce that is extremely difficult to replicate in an affordable manner at scale with a traditional call center model."

It is wortwhile to note that good process management is frequently cited as both a requirement and a benefit of homeshoring.  However, good process management is increasingly being recognized as a prerequisite of business success in general.  The more business process management improves throughout all of companies the more prepared firms will be for homeshoring.  Thus, it is not only technological changes that are paving the road for massive homeshoring, but also management practices that make companies more capable of adopting homeshoring solutions.