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| Finance & Accounting Outsourcing Surpasses $2B in 2006 | |||||||||||||
| The global Finance and Accounting Outsourcing (FAO) market is predicted to grow in excess of 30 percent in 2007 as the global infrastructure matures to enable F&A solutions that take advantage of low-cost offshore talent and robust supplier process offerings underpinned by F&A technology, according to a new report released by the Everest Research Institute. The global FAO market has grown by more than 45 percent since the beginning of 2005 and reached $2 billion in expenditures in the United States last year, according to the Institute’s Finance & Accounting Outsourcing (FAO) Annual Report 2006. The study reports North America-based contracts continue to account for over half of FAO revenues, with increasingly rapid growth in Continental Europe. Among the industry verticals, manufacturing and energy and utilities are leading the FAO adoption, capturing nearly 50 percent of the market. Retail and financial services are the most under-penetrated sectors with high untapped demand. The FAO annual report for 2006 activity examines the global FAO market and provides insights, detailed analyses and implications for stakeholders along three key dimensions: (1) market size and buyer adoption, (2) transaction characteristics and value proposition, and (3) supplier landscape. The report found that offshoring is now established as the key value lever in FAO with more than 80 percent of all contracts including an offshore component. While India has emerged as the premier offshore destination with the largest number of scaled FAO centers, Eastern European locations are also becoming an integral part of supplier strategy to support European operations. Regarding supplier activity, the report suggests that the FAO industry is witnessing an increasingly level playing field. In 2006, Genpact, HP, Infosys BPO, and Xansa significantly increased their market share. Accenture, IBM, ACS, and Genpact currently lead the market on a capability market success matrix, but there is still an intense battle for overall market share. The Institute also reported that despite the phenomenal growth over the past few years, the FAO market is grossly under-penetrated across all regions and verticals, and there is still substantial opportunity for growth. The market is now experiencing an aggressive growth phase fueled by cost reduction from offshoring and the adoption of multiple accounting processes integrated within a single outsourcing provider. | |||||||||||||
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Jan-18-2007
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| Employment Options in America Reaching a Tipping Point | |||||||||||||
| A new economic reference, “The New Career Economy” is the end result of a 2006 research study commissioned by The Entrepreneur’s Source. According to the study, the days when individuals will work for one or two employers, receive lifetime benefits and retire boasting double-digit service time from one employer are gone. The study did suggest that in the future, long-term security would be gained through individuals managing their own careers through self-employment and other alternative career options. The research cites the many threats to an individuals job security and financial freedom that never existed before such as company downsizing, lengthy layoffs, the elimination of benefits, enormous corporate bankruptcies, colossal consumer debt and social security insolvency. For those that will work for employers in the future, the research states that W-2 wage earners can expect to have 6 to 8 job changes within a chosen profession in a working lifetime; and/or to completely change their working profession at least 3 times. The research findings point out that since traditional employment options are becoming unreliable, individuals may have to provide up to 50% of the income they’ll need for the more than 20 years they may live in retirement. Additional findings: | |||||||||||||
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Jan-18-2007
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| Middle Managers Unsatisfied with Their Organizations | |||||||||||||
| Middle managers around the world share a lack of satisfaction with their current organizations and describe their companies as mismanaged, according to the findings of an annual survey released by Accenture. The survey of more than 1,400 middle managers in nine countries in North America, Europe and Asia found that, on average, just four in 10 (39 percent) of respondents said they were “extremely” or “very” satisfied with working at their current organizations. Furthermore, one in five (20 percent) is specifically dissatisfied with his or her current organization. Additionally, when asked to describe their organizations, the largest share (30 percent) of all respondents selected “mismanaged,” and this was consistent across all the countries. Almost one-quarter (23 percent) of respondents said they are currently looking for a job elsewhere. Of these, 25 percent said their primary motivation is lack of prospects for advancement at their current jobs, and 22 percent cited better conditions at another job. There was some variation across countries, with respondents in the United States, Spain, Germany and Australia generally showing higher levels of satisfaction than those in other countries. When asked to indicate the most frustrating aspects of their jobs, the greatest number of respondents – 44 percent – chose insufficient compensation. About the same number (43 percent) said they feel as if they are doing all the work but not getting credit for it. More than one-third (35 percent) reported that they are frustrated by trying to balance work and personal time, and the same number said they are frustrated because they have no clear career path. While approximately half of respondents gave their organizations high marks for how they manage working conditions and benefits – 53 percent said their companies manage working conditions, and 48 percent of respondents said their companies manage benefits, in a “good” or “the best possible” way – they gave lower scores to a variety of other functions. In fact, only about one-third of respondents reported that their companies were good or excellent at managing compensation (selected by 30 percent), flexible work arrangements (34 percent), helping them communicate bad news (35 percent) or prospects for advancement (35 percent). | |||||||||||||
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Jan-18-2007
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| Competencies that Drive High-Performance Companies | |||||||||||||
| Bersin & Associates, a research firm focused on talent management, has released “How Talent Management Drives Financial Performance,” a comprehensive study on the relationship between performance reviews, competencies and business success. Findings of the report show a clear correlation between the competencies used in performance reviews and business outcomes such as financial performance, employee retention, business resilience and profitability. For example, fast-growing high-technology organizations manage and value “innovation” and “creativity” much more heavily than low-growth companies in the same industry. Successful retail organizations heavily value “teamwork” as a critical competency. Findings include: | |||||||||||||
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Jan-18-2007
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| Employee Ratings of Senior Management Dip | |||||||||||||
| While employee ratings of senior management shot upward earlier in the decade, those numbers dipped slightly in 2006, a survey by Watson Wyatt Worldwide has found. Watson Wyatt’s WorkUSA 2006/2007 survey of 12,205 full-time U.S. workers across all job levels and major industries showed that senior management’s ratings from employees have dropped slightly since 2004. In contrast, many of those ratings had risen considerably from 2002 to 2004. Only about half (49 percent) of employees said they have trust and confidence in the job senior managers are doing, down from 51 percent in 2004. Fifty-three percent said that senior management makes the changes necessary for the company to stay competitive, down from 57 percent in 2004. And 66 percent of employees said they have confidence in the company’s long-term success, down from 69 percent. The survey also found considerable disparities among companies in the frequency of senior management’s communication with employees. Forty-three percent of employees reported that their firm’s senior management takes an active, visible role in communicating to employees, down from 45 percent in 2004. Watson Wyatt’s survey found that highly engaged employees were much more likely to report receiving communication from senior managers at least once a month. More than half (56 percent) of highly engaged employees receive communication from senior management at least monthly. In contrast, 42 percent of low engaged employees say they receive annual communication or no communication at all. | |||||||||||||
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Jan-18-2007
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