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There are three key considerations that field service organisations must take into account when building a modern workforce, including the changing demographics from Baby Boomer to Millennial, the impact of technology on field service operations, and the growth of the ‘gig’ economy. In the first article in this series, run in partnership with FieldNation, we looked at why the field service landscape is changing, now in part two we discuss how you should approach building a modern field service workforce...

There are three key considerations that field service organizations must take into account when building a modern workforce, including the changing demographics from Baby Boomer to Millennial, the impact of technology on field service operations, and the growth of the ‘gig’ economy. In a new series run in partnership with FieldNation, we explore all three...

Effectively managing the peaks and valleys in field service demand is one of the greatest challenges facing managers and executives across a broad array of market segments says Michael Blumberg, President & CEO of Blumberg Advisory Group, Inc.  Here, we publish the first part of extracts from his White Paper, "The Variable Workforce Model",  on how the momentum for freelance service technicians is building and potential solutions for managing them.

The Field Service Dilemma

Typically, temporary or contingent labour was utilised to support periods of peak demand: when there was a spike in new product sales or when brought about by seasonal issues. For example, a surge in installations or refreshes resulting from new product purchases required that the service organisation employ additional field service engineers (FSEs) to complete the installations in a timely manner.

However, relying on a temporary workforce to handle emergency maintenance was historically viewed as anathema to service executives within companies that sell equipment. This was because the FSEs were typically viewed as an extension of the sales team and thus vital to keeping the equipment operating and the customer happy. The conventional wisdom was that if equipment failed to operate properly then the customer would become irate, blame the manufacturer or reseller, and stop buying their products.

FSEs were considered to uniquely possess the specialised knowledge and skills required to resolve emergency issues. These skills took years to acquire and were difficult to replicate. How could emergency service be trusted to temporary employees with limited knowledge or experience with the product?  As a result, peaks in demand for emergency service were typically handled by asking FSEs to work overtime hours.

Setting the groundwork for the variable workforce

In the mid-1980s a number of service networks were created among like-minded service providers (e.g.  resellers, OEMs, etc.) to provide FSE coverage in geographic areas where their partners lacked specific skills sets: the beginning of the managed service provider concept.  Another driving force behind the decision to use contingent labour was the fact that the economics of hiring full-time personnel were not favourable. With margins declining, it was difficult for service providers to justify hiring additional personnel. Turning toward a network of vendors, subcontractors, and service companies to fill peaks in demand became a viable solution for many service providers.

 

In the 1990s outsourcing of non-core activities became popular with a number of prominent original equipment manufacturers such as Cisco, NetApp, IBM, and HP who outsourced non-strategic field service functions to Third Party Maintenance companies.

The recessions of 2001 and 2008 led to layoffs and hiring freezes across a wide array of industries. Service providers could not risk having situations where field service engineers were not available to support customers’ requests. Rather than keep non-essential workers on the payroll, companies realised they could reduce operating expenses and lower overhead costs by hiring field service engineers on a per call basis; as consultants or freelancers.

The freelance model has now become main stream within the field service industry. It gives service providers the ability to manage field service delivery through a variable workforce model. Maintaining a field service workforce on a full-time basis represents a short-term, fixed cost for service providers. With field service experiencing its own peaks and valleys in demand, a service provider can now convert a short-term fixed cost into a variable expense.

Options for building a variable workforce
[quote float="right"]Field service companies have a number of options available to them for obtaining variable field service labour.

Today, companies who support or maintain large sets of geographically dispersed technology and environments such as ATM machines in retail locations, Wi-Fi access points in coffee shops, or Internet of Things enabled technologies, have a number of options available to them for obtaining variable field service labour. These include: [ordered_list style="decimal"]

 

1. Implement Master Service Agreement (MSA) with one or more companies. This usually requires the OEM hand-off all on-site service requests to the Field Service Organisation who is responsible for managing their own workforce. While this is one of the simplest ways to obtain access to a contingent labour force, it is often the most expensive; particularly if the FSO is using its own workforce to perform the on-site request. This is because the FSO’s price per service call usually takes into account direct labour costs, plus parts, overhead, risk and profit.
   Furthermore, the FSO may not be able to provide their client with full visibility, accountability and control into the service delivery process. Basically, the client is alerted to when a call is dispatched and when it is completed, not to what occurs in between.
2. Manage subcontractors on their own. Another option is for a company to build its own variable workforce through a “Direct-To-Tech” approach. This requires that a company hire independent contractors either directly or through a staffing company, or they can reclassify existing full time FSEs as independents. Reclassification could create problems from a legal and financial perspective.[quote float="left"]The Direct-To-Tech model can be very successful but only if the nature of the work is truly independent contracting, not a second class worker.

    

   More importantly, setting up and managing a variable workforce labour pool requires an investment in mobile communication and collaboration technology, as well as new processes, procedures, and training for both management and dispatch staff.
   Companies who don’t approach this challenge strategically often end up with ad hoc systems and processes that are cumbersome and unscalable. All too often, companies end up blaming the subcontracted or freelance workforce when the real root cause of the issue is a lack of robust and scalable systems that lead to mismanagement.
3. Adopt a “Sharing Economy” model. Companies who are willing and able to manage teams of individual workers can turn to a sharing economy model. In this scenario, a company would use an Internet platform, provided by a 3rd party technology vendor, to recruit, on-board, train, dispatch, manage, and pay individual contractors. There are substantial cost savings to a company who is willing to pursue this course of action. Improvements in service quality and productivity are also possible .Freelance contractors are typically more engaged and motivated since their income is directly proportional to the quality of work performed and number of assignments they accept. More importantly, it avoids the risk of misclassifying workers. Freelancers who make themselves available through this type of labour model have made the decision to become a small business. In their work as independent contractors they have the ability to decide how many companies they contract with and which types of jobs they select, how and when they go about performing their work and how to best use their own tools and equipment.
   [/ordered_list]

All things being equal, we believe the sharing economy model offers the optimal solution for obtaining access to a variable workforce. This is provided the company using this model is prepared to engage in the necessary leg work required to manage teams of independent contractors through a Freelance Management System (FMS) platform.

 

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Watch out for Part 2 of this White Paper. Download the version here

 

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Field Nation, the US company which has developed an on-line marketplace matching independent service contractors with  project management demands, has secured a $30 million investment led by Susquehanna Growth Equity.

Field Nation has been self-funding since its launch in 2008. It has reported rapid growth of 65% a year and during the past year it has connected more than 1,000 organisations with its network of over 65,000 registered contractors.

The company's on-line marketplace connects independent service contractors and companies needing to get on-site work done. It allows service companies and distributed enterprises to directly procure, manage, pay, report and optimise labour requirements. . The broader platform extends the marketplace through Field Nation Complete, a SaaS solution that delivers a complete work management solution when organisations require the combined experience of their internal and external workforce. It also allows contractors to market their skill sets, find new projects, engage with each other, complete work and get paid quickly.

“We have experienced tremendous growth and success as a small company, and now we’re prepared to start the next chapter of the Field Nation story,” said founder and CEO Mynul Khan. “With the financial support and experience from Susquehanna Growth Equity, we will rapidly accelerate our efforts to introduce Field Nation to organizations of all sizes so they can tap the full breadth of our marketplace and get more work done.” This growth-capital investment validates the business model, strategy and disruptive technology of the Field Nation platform, says the company.

The company plans to increase product development and promotion of its SaaS-based total workforce management solution Field Nation Complete and expand its service offerings into new vertical markets.

 

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Across December and January we asked our readers to nominate candidates for the inaugural #FSN20, a list of the twenty most influential people in field service. We received nominations from across the globe through social media, email and even a phone call or two directly into the news-desk.

Armed with a list of candidates, a Field Service News panel selected the final list of twenty based on the number of nominations, their impact on the industry (past, present and future) and their sphere of influence in both the physical and digital world.

After much long deliberation, heartful debate (read arguing) and enormous amounts of coffee we managed to whittle our list down to a final twenty which we pleased to present to you here the inaugural edition of the #FSN20. You may not agree with our selection and if you don’t tell us, tell your friends, tell your colleagues, hell tell the world – because at the heart of it that’s what this list is all about, getting people talking about excellence in field service and raising the profile of those leading us to a better future.

We are now announcing who made the list in alphabetical order in four sections across four days. So without further ado we are pleased to bring you the second five of the #FSN20

Professor Elgar Fleisch, University of St. Gallen

With an extensive academic background that covers mechanical engineering, business economics and artificial intelligence, Fleisch has both an extensive understanding of how technology can influence business and an international reputation to match that understanding.

He has focused his research on the joining of the physical and digital worlds since the very birth of the Internet of Things and is, thus, highly regarded in the sphere. It is likely no coincidence that his presence on the executive board of CoreSystems coincides with the rapid rise of the Swiss field service management software provider, whose field service offering was the first product of its type to start taking advantage of IoT.

Follow Edgar @coresystems

 

 

Dave Hart, VP of Global Customer Transformation, ServiceMax

Another of those on our list who has worked their way upwards from field service engineer; in fact, Hart has taken most of the steps on the ladder.

From Service Engineer to VP of Service, from managing small regional teams through to managing thousands of engineers across Europe, he’s been there and done it. With this background there is an unbridled wealth of experience that Hart is able to share.

Therefore it was a great move by ServiceMax in employing him to help share that experience and deep understanding of field service with their expanding customer base.

Follow Dave @davehartprofit 

 

Martin Hotass, General Manager, Siemens Professional Education

One of the biggest risks field service faces is an ageing workforce and Siemens is one company at the forefront of tackling this problem head on.

Hotass is not only leading the charge, engaging with students and colleagues alike, but in speaking to him, he is truly passionate about bringing the best young talent not only to Siemens but also to the industry in general.

If field service is going to overcome the significant issue of replacing the current workforce successfully we need more with Hotass’ dedication to the task.

Follow Martin @SiemensUKNews

 

Professor Howard Lightfoot, Cranfield University

Co-author on ”Made to Serve” and another significant figure in the servitization movement. However, Lightfoot’s inclusion within the list is more based on his current work at Cranfield University where he is playing an instrumental role in educating the next generation of engineers via the use of some truly groundbreaking technology.

With the field service industries facing a very real crisis of an ageing workforce, the work Lightfoot is currently performing could have a profound impact on the ability of field service companies to survive this crisis with minimal impact.

Follow Howard @howardPSS

 

Mynul Khan, Founder, Field Nation

The shift away from traditional work contracts to outsourcing to local contractors has an obvious appeal for field service organisations and Field Nation, a product of Khan’s own vision, is a perfect tool for facilitating this in the twenty-first century. Dubbed an ‘ebay for field workers’ Field Nation connects workers with contractors across the U.S.

Whether such a solution could work in the multi-language, cross-border regulation framework of Europe is yet to be seen, but the rapid adoption of Field Nation suggests that there is certainly a market in the home shores at least.

Follow Mynul @fieldnation

 

See the rest of the list here: Part One, Part Three, Part Four

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