As we continue our series of excerpts from a new and exclusive Field Service News Essential Guide published in partnership with ServicePower we look at what are the common over-riding drivers for the adoption of the blended workforce model shared by companies that have successfully adopted such an approach
For those companies such as Ericsson, Ideal Boilers, and Electrolux who have been utilizing a blended workforce model successfully, for many years, there are many significant benefits. Another company with a vast amount of experience in this area is our partner on this guide is ServicePower. In this excerpt from this Essential Guide, we will look at the benefits these companies see in the blended workforce model.
Having now defined the blended workforce model let us take some time to explore in greater detail some of the core drivers for adopting it. In the opening chapter we discussed some of the headline benefits of the model but which of these are the most critical drivers in the eyes of industry leaders who have direct first-hand experience working with such models?
“The blended workforce provides benefits that include increasing geographic coverage, allowing for seasonal surges, unplanned events, such as storms and catastrophes, and the augmentation of skill-sets,” explains Frank Gelbart, Chief Executive Officer, ServicePower.
“Additionally, it’s all about agility. The blended workforce model offers increased agility that really enables service organizations to take on both more service jobs and also different types of service jobs. Therefore, it allows them to increase their top line service revenue.”
For Steve Zannos, Senior Director Service Delivery, Electrolux, this agility is particularly useful in managing the seasonal variations in demand that occur within their customers requirements.
“One of the key benefits of the blended network is it allows us to not have to hire and manage through all the peaks and valleys of seasonal demand,” he explains.
“We work with our partners and build that flexibility with them together. If we only had a manufacturer workforce, we would have to figure out how we manage through those peaks. There are a couple of ways we could do that.
“Firstly we could bring on a temporary workforce. The summer is the big season for us as many types of appliances we build such as refrigeration or air conditioning can require maintenance in the summer as they are being used at their peak. However, if we were to use temps, it would mean an investment to bring them in, then there would be a lot of training that to work on and this all has to be completed in a short period before then at the end of that peak season having to let them go. There would be no real consistency and next season we’d be starting all over again.
“Plan B would be to stick with a flat network that’s designed for the valleys and then when the peaks come, we would just run the teams ragged with overtime and have everyone working 60 to 80 hours a week. The problem here is that you burn people out. They just don’t want to do it anymore, and then you lose some great talent.
“The third plan is to plan for peak season and to carry that workforce across the whole year. The problem is of course, this is not very effective from a cost perspective. During the downtimes, we would now have the opposite problem where we couldn’t allow people to work a full 40-hour week. We may even have to cut back on time so the field techs are only working 20 or 25 hours - a week. This will mean that they are not going to see income that they’re expecting.”
“Of course, none of these options is optimal, so we leverage the blended network instead and it is by far the best solution for our business.”
"Let’s take an example of the Outer Hebrides islands. It makes no sense for us to have an engineer on each one of the main islands, so we create partnerships with suppliers who do have people permanently stationed there for first level interventions."
- Adam Gordon, Head of Network Planning and Operations, Ericsson
Such seasonal pressures are of course, a challenge that many field service directors in at least to some degree, and adding that flexibility to manage the peaks and troughs of variable demand is one of the critical strengths of the blended workforce model.
Another key benefit of the blended workforce model is to provide wider geographical coverage.
As Adam Gordon, Head of Network Planning and Operations, Ericsson explains, “Ericsson cannot have a footprint in every single area of the UK. Let’s take an example of the Outer Hebrides islands. It makes no sense for us to have an engineer on each one of the main islands, so we create partnerships with suppliers who do have people permanently stationed there for first level interventions. Then if a second-level requirement arises, we’ll send an Ericsson employee, to take over the job.
However, once again, seasonality is another benefit of the blended workforce model for Ericsson.
“We see big swings between winter and summer. In the summer, it’s the south where it’s warm so we have a lot of heat issues. In the winter, we have the cold and the snow in Scotland and the north of England, so that’s definitely a factor,” Gordon explains.
A third benefit that Gordon outlines is the introduction of skill-sets that don’t exist within their internal workforce.
“The introduction of additional skill sets is one area of the blended workforce, which has been utilized by Ericsson quite a lot in the past. For example, we are not generator experts so we’ve always found suppliers who are generator experts to fill in that knowledge gap in our workforce. These types of companies would be core partners that we would look for within the blended workforce.
“However, over the past two years, we’ve also looked at our field workforce and how we try and utilize that workforce. I’d rather use the term utilization than optimizing costs because if you optimize your workforce correctly, you then optimize your cost to be specific as well.
“That’s where it then comes down to identifying what are the key skills that we want to investment in at Ericsson? Our focus is on the higher-skilled, higher proficiency types of activities specific to Ericsson equipment. Yet, every site needs to have maintenance, including checking the site and cleaning fans. So the question we asked ourselves is do we really want a highly qualified field engineer with twenty years worth of experience, to be doing something that is ultimately a routine task? Those are the types of activities you have to ask yourself ‘should I look for a blended workforce to utilize the right skill level?’
This then comes to into the optimization of the costs, making sure the right skill-set is attributed to the right level of activity.
“It’s common sense, you need to ask ‘have I got the right person doing that job?’ and ‘is there a better way to deliver that service?’ You cannot have every skill internally, so utilize what’s in the marketplace.”
For Jessop, and Ideal Boilers, again, seasonality comes to the fore when we discuss the key benefits of the blended workforce model.
“Within the heating industry, seasonality is very significant. For us, it is a year of two halves, the autumn and winter period are very heavily focused on repair demand . During the spring and summer when we tend to focus more on the servicing demands, which are a more centred around a planned workforce.
“Customer expectation and customer requirements are very different across the two. There is a ramp up and ramp down between the two, and a hybrid workforce model can assist with that approach.“
However, for Chris Jessop, Customer Service Director, Ideal Boilers, the most significant benefit of using a blended workforce
model ultimately lies in extending their capacity to meet the most crucial of all aspects of field service, ensuring customer satisfaction.
“The biggest benefit and the biggest driver is the customer experience, ensuring that we can offer tailored approaches that may not be as easily achievable with just your own workforce,” he explains.
"It’s becoming more and more difficult to attract youngsters into field service roles. Companies are finding it more challenging to staff some of these roles, which is why they’re leaning on a contingent workforce."
- Samir Gulati, Chief Marketing and Product Officer, ServicePower
One additional factor that needs to be considered is an issue we in the field service sector have faced for some time, the threat of an ageing workforce and the lack of enough recruits to replace them.
As Samir Gulati, Chief Marketing and Product Officer, ServicePower, comments, “It’s becoming more and more difficult to attract youngsters into field service roles. Companies are finding it more challenging to staff some of these roles, which is why they’re leaning on a contingent workforce. That contingent workforce could be less experienced on the brands of that particular customer, so what some companies have begun to introduce is to pair those third-party workers with a more experienced technician who may not be on the call with them, but is available, for a chat or a video session, to make sure that they can indeed deliver on that first time fix,” he adds.
Gulati and his colleagues at ServicePower are, of course, seeing the bleeding edge of both technology and thinking around the blended workforce model, having worked with and empowered many companies that have utilized this approach for many years. However, for those companies at the beginning of the journey, he outlines the fundamental benefits of the blended workforce with the kind of clarity that only comes from deep-level, hands-on experience of a subject.
“The fundamental model of a blended workforce is really based on coverage and the volume of business that a service provider can expect in a particular geography,” he explains.
“What we’ve found is that most companies prefer to manage the service business via an employed workforce so they can grow their service revenues.
"This works typically where the business volume justifies the cost of hiring your technicians in any given geography. For example, in the US, tier one and tier two cities, our customers will have their own techs. However, the moment you start to get into tier-three cities and towns, when you get into vast areas of land, like in Kansas, North and South Dakota, Wyoming and Colorado, this is when the OEMs have to find third party contractors because the volume of work is just not there.
“Your closest tech could be 100 miles away and you’re not going to have your technician travel 200 miles every day to service one customer because it’s just not cost effective. That’s where the third party or the contingent network comes in. It’s a very similar situation in Europe, where in the larger urban centres you find a lot of companies have their own techs.
“However, the moment you start to get out of those urban centres, it’s all third-party service providers because the OEM simply cannot justify the cost of hiring direct employees who may be only running two or three jobs. On average, our OEM’s techs run eight to ten jobs back-to-back on a daily basis. If you don’t have that level of volume, you’re probably going to rely on an a third party service provider to manage that regional geography.”
What is clear having spoken to a number of experts in utilising the blended workforce model for this guide and the accompanying documentary is that a variable demand on the field workforce is a compelling factor in the need to adopt a blended workforce. Whether that variable aspect comes from geographical, skill-based or seasonal elements the solution is the same - the effective adoption and use of a blended workforce model.
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