What a surprise to outsourcing providers…people actually matter to the CEO

The prevailing belief in the sourcing world is that cost is king and people are fungible. Yet a study by The Conference Board, The Conference Board CEO Challenge 2013 (www.ceochallenge.org), flies in the face of this, and other commonly held tenets, about the way the C-suite regard sourcing initiatives.

Today’s study, based upon a survey of over 700 global chairmen, CEOs and presidents, finds that people are front and center when it comes to top leaders’ challenges. While previous years’ results surfaced overriding concerns about the regulatory environment, business conditions and risk, today leaders are most concerned about “controlling the controllable.” And it all seems to start with growing people internally.

For those of us (read: provider community) scrabbling to get C-suite attention, perhaps it’s time to refocus the discussion. Sure, cost matters, but at what cost to the client? On demand cheaper labor is great, but if the organization is hollowed out as a result, eliminating vital capabilities, there’s a long term price to pay. Seems the respondents see a direct linkage between human capital and meeting other challenges such as achieving innovation, and operational excellence, and delighting customers, which also rank high in CEOs’ list of challenges.

So the next time you’re trying to get the attention of the top brass, perhaps the focus of the discourse should change. Is it time to develop value propositions that have the added benefit of upgrading the capabilities of the retained teams, or those embedded in the business? Or offer a staffing paradigm with career path that makes careers in both service delivery and in the business mandatory? Perhaps investing more than the usual few hundred dollars in training is on order. Or even acknowledging the client’s human capital challenges would be a good start.

What’s the net implication of the study? If these CEOs stick to their guns about people as a priority, ‘slash and burn’ is no longer a compelling value proposition. It’s time to think about how sourcing can enhance internal talent.