The Skills Shortage with Maria Terekhova — Webcast Q&A Transcript
Edward Brooks: Hello. First of all, welcome to this session. It’s a subject that’s pretty dear to my heart and why we ended up creating the RPA Academy in the first place and the real challenges we saw in the market emerging maybe two or three years ago.
And then out of the blue, Maria Terekhova at the HFS research created this fantastic paper on the exact same subject.
Maria, thank you very much for agreeing to talk on this topic, do you want to give us a bit of background on who you are, how you got involved in this space and what you want to share with us today?
Maria Terekhova: My name is Maria Terekhova, I’m a senior research analyst with a company called HFS research. If you’re in the RPA marketplace in any shape or fashion, you will probably have heard of us at some point. We’re small, but I like to think we punch above our weight.
We’re headquartered in Cambridge UK, where I’m based, but we also have very big teams relative to the overall size of the company in the US, mostly on the east coast and also in Bangalore, India. I’ve been with the company just about a year now and I look at RPA and Intelligent Automation as well as Artificial Intelligence.
And it’s a pleasure to be talking to you today Edward.
Edward Brooks: Yeah, I can’t find one who doesn’t know HFS research, probably the most innovative kind of researchers in the market. And while there’s still fundamentally a very strong data driven kind of output, it’s also done with your humor and edge to it, that makes it stand out from other analysts in the field. I think it really depends on the people in your team that have formed over the years.
What was your background? And how did you become involved in this space, and in particular the skills gap? And when did it jump out to you as being an issue?
Maria Terekhova: So, I think when I first started at HFS, I felt at a disadvantage because I had not come from any kind of RPA or automation background. I’d been writing about FinTech for another research company. And so, the first time I’d heard of RPA was literally about nine months ago.
But, the advantage that gave me was, I was able to see higher-level trends that jumped out at me because I hadn’t been in the space as long.
And one of those was that, it seemed like both enterprises and service providers had very high ambitions, at least in the briefing calls that we were having about what they wanted to accomplish with RPA, either internally or for their clients. But when we started to ask ‘do you have the talent pool to do that?’, people began stuttering a bit.
So we started digging deeper and what really helped us unmask the scale of the problem was, when we started research on our RPA Service Providers Report (which we published in December) it allowed us to really quantify what the global RPA talent pool looked like, at least across the top 30 RPA service providers, that we’d surveyed. And the number was really quite surprisingly low.
And in terms of skill level, within that talent pool, we realized that it was even shallower than we had thought. So, that was probably the first time that it really hit me of just how big of a problem we were dealing with.
Edward Brooks: Yeah, obviously the figures, some of the figures are on the slide here. I think it’s very important to recognize it. As you see in the first bullet point, it does take time to develop skills in any new technology.
And I think the challenge unique to RPA is just a scale of growth, that is there a vacuum - there just aren’t enough people with the required experience.
Maria Terekhova: Yeah, absolutely. And you’re right, it’s not unique to RPA, but maybe… people will certainly disagree with me on this, I think, but maybe the reason that it’s been exacerbated in terms of RPA is that RPA has been very heavily marketed as something which is quite simple relative to other technologies, something that’s easy for business users, especially to implement and use and maintain, which I don’t think other technologies suffer from — they don’t have that image problem.
People are actively told that things like Artificial Intelligence is very complicated and that they do require a lot of hard work to deliver results. So, I think in other areas where we see nascent technologies and we don’t have quite the same gap and also, people are more prepared, they’re more prepared for that gap, they’re more prepared for what they have to do to cultivate talent to get results.
Edward Brooks: Yeah, I remember being involved in a block-chain start up a couple years ago. And the very first starting point was that none of us in the room could actually do what was actually required to make the startup happen.
You’d actually have to bring in deep experienced talent. Whereas, with this, it is absolutely different, there is this feeling that it’s cheap, easy, fast and anyone can do it.
And what I will say, just in defense of some of the marketing, is that we’ve trained people from all sorts of backgrounds. And one of my standard jokes is, ‘what do you call a room full of four developers, four accountants and a cardiologist?’ And the answer is, ‘a Blue Prism Training course because we’ve actually taught cardiologists.’
You can’t pick it up, I think we actually want to get more extreme and deeper use of RPA, that’s when you can have an immediate skills gap. So you can certainly pick up the basics or the HR person can pick up the basics, but anything beyond that, really comes up as much more of a developer mindset and that can’t be created overnight.
Maria Terekhova: Yeah, you’re right to an extent. The whole ‘RPA is easy’ tagline is not entirely misleading. A business user can build a bot, our CEO’s nine-year-old son recently built a bot.
So, there is some extent to which I suppose it is easier than other technologies, but there’s a big difference between building one bot and automating an entire complex function or process within a multinational business, which is, I guess, the point that we’re trying to get across.
Edward Brooks: Yeah, I think I like your point a bit. We’re building these slides, the side effect, this last cultivation, it wasn’t just of RPA expertise, it was actually deep RPA expertise. And I think that’s what we’re seeing the real barrier to evolution is that people are definitely doing the first stage of training and doing the developer training and doing the advanced developer training, but they’re not going any deeper.
And anything informally, they’re largely making up as they go along, based on what they’re doing in their own work environment.
So the concept of enterprise RPA is easy, deep RPA is very complicated and has multiple issues, but also, people aren’t really appreciating that it requires an investment to get that level of depth.
Maria Terekhova: Absolutely. And I’d say that’s especially true of enterprise clients because a lot of attention is paid to what the service providers of the world are doing and what responsibilities they have for ensuring success in this whole thing.
But it’s like, I get the feeling that enterprises are being given a free pass. It’s like, as soon as there’s a service provider on the scene, the ball is in their court.
But what you say about cultivating deep expertise, what we find is at least in the latest study that we did on RPA service providers, 75% of enterprise clients that we talked to, said that they have plans to retrain or re-skill their existing employees to create internal RPA talent reserves.
But the truth is, we’ve seen little to no evidence of the required budgetary heft needed to make this happen. I mean, at the level of technical resources as well as business side sponsors and those responsible for identifying RPA use cases in their organizations.
It’s all very well and good saying you’re going to retrain, but there’s just no evidence that this is happening at the scale required.
Edward Brooks: Yeah, well, it was fascinating because what we’re seeing is that probably 90% of the corporate training or the organizational training we’re doing is re-skilling of existing people, which is fantastic, that’s a great internal message to make that ‘you shouldn’t be afraid of this technology, we’re going to re-skill you.’
But in terms of the ROI, it’s always measured against the project or the cost of the project. In fact, if you’ve got someone who’s potentially going to leave your organization, that’s going to cost you upwards of $30,000 just to replace that person in terms of time and lost productivity.
Spending a couple of thousand dollars a year re-skilling them, it’s kind of an employee value proposition and a risk mitigator and so many other factors that are actually very strong on the HR side.
But I don’t see organizations recognizing in that kind of way that they can see some value before they can deliver, but also, assesses the security against this person walking out the door, just with skills and knowledge.
Maria Terekhova: Yeah, absolutely. That’s kind of what we’re trying to advocate at HFS. And the message that we’re trying to push is that you need to safeguard against things like that, it’s bad enough not to have a deep and a broad talent pool to fall back on in the first place.
But to cultivate a small one and not do anything to centralize that knowledge or let’s say, back it up, I’d say that’s a big mistake. There has to be some way to retain that knowledge within an organization, create a database, centralize it in some other way, whether that’s a center of excellence or otherwise.
Once you do take that hard step of cultivating RPA expertise within your organization, just make sure you’re basically saving it somewhere.
Edward Brooks: Yeah, absolutely. Obviously for the market applications you were talking about, there’s the obvious things like an ability to scale or the over promising of RPA and quality of service, but then you quickly go to talk about the actual business implications that are beyond the technical skills.
Do you want to go into those in a bit more detail?
Maria Terekhova: Yeah, of course. I think what you’re referring to is the findings that we brought up on change management and governance expertise.
Edward Brooks: Exactly.
Maria Terekhova: So, this was interesting because obviously in the study, we were surveying some of the biggest names in the market. Some of whom obviously got stellar scores in our assessment, but almost without fail and it’s important that I say, almost, because there were exceptions.
Even the biggest names who you’d expect to have A+ report cards across the board, they were rated very, very lowly on change management capabilities and as you have up on the slide; Set Up and Maintenance of Governance.
And the interesting thing is… you can say that RPA service providers aren’t circulating knowledge well enough, let’s say, between more senior RPA experts and more junior ones and that’s impacting their scores on both of these criteria. But I’d argue that enterprises don’t seem to realize the irony of giving these scores because change management and governance is a two-way street.
I mean, how much of a comprehensive governance scheme or effective change management can you have, if the client is sitting back and not getting senior staff members involved. I mean, one side isn’t pulling its weight.
Edward Brooks: So, we will come to that in a second or two, but what I have taken from what you’re saying in the build up to this was, that you’ve got people who are getting promoted because they don’t have that much in terms of years, so they’re getting a little experience, technical experience on the job but what they are not bringing to the table is the business side of it, the change management, the governance piece, the communication skills, the project leadership skills.
So that’s away from the technical skills, that’s kind of a bigger business impact on RPA generally.
Maria Terekhova: Yeah, absolutely. I mean, interacting with a multinational organization takes more than knowing about how to implement RPA within it. And if you’re someone who’s, let’s say, left University several years ago and you happen to be the most senior RPA experts within that company and you’re promoted, you’ll be expected to team lead.
Not only to be responsible for technical implementation, but for talking clients through the implications of this technology for them & what their organization will look like in five to 10 years. That requires a whole different set of skills. It’s almost like a set of diplomatic skills.
Edward Brooks: First of all, it requires a knowledge that these things need to be addressed. And I think genuinely in the market, I feel that everyone is so focused on let’s build a ball, let’s do the stuff. They forget that actually all around this stuff, you need to get your communication right, you need to get your vision right, you need to get your change management right.
So yes, building your stuff is the tangible part. But the intangible part, I think my concern would be that developer or a senior developer, a project manager, doesn’t have that broader experience and doesn’t even know these things have to be done in the first place, so therefore, doesn’t know how to do them.
Maria Terekhova: Yeah, absolutely, I agree wholeheartedly. And again, as I say, it’s not possible to build talent out of thin air and it’s still a young market. So, to some degree, it’s understandable, these low scores, but my concern is that there’s not enough being done to even think about how they’re going to be addressed, never mind, actually addressing them.
It’s like actually getting RPA to produce some kind of tangible ROI for clients is such an all-consuming concern because there’s such a small talent base in the first place that these so called softer skills and soft needs become treated as peripheral, which I think is doing no one justice really.
Edward Brooks: Yeah, it’s also because what we’re finding is that when people do take formal training, they take in what I call the elephant sized chunks, basically follow the certifications that are created by the providers.
And in reality, they probably don’t. That’s a huge elephant to digest for a lot of people in terms of time and knowledge. Whereas actually, what they probably need along the way is the right bite at the right time.
And currently, all the training is built around these elephant sized chunks and we reverse our few plans to address that going forward. It really, really is just to make it easier to access training on governance, training on the digital workforce, training on change management as well as the core skills.
But you touched on who’s to blame. You didn’t use the word ‘blame’, but who’s to be addressing this, and you jumped straight to enterprise clients as the core organizations that should be driving this, do you want to go bit deeper on that?
Maria Terekhova: Absolutely. So, as we write about automation, it does seem to me, especially when speaking with enterprise clients, that it’s very, very easy to forget the problem that you were trying to solve when you first got involved with a particular technology. It’s like, you stop seeing the forest for the trees.
And basically, the only party who can answer the problem we’re trying to solve of why we brought RPA into this in the first place is going to be someone who has been in that company for a while.
And those processes that aren’t working, where customers are frustrated, where there are friction points, only they will be able to really build an automation strategy that makes sense because you can bring in all the tech you want, but if you’re plugging it in random places and slapping it on as Band-Aids, that’s not going to work.
I mean, you have to intricately and intimately know these processes where there are problems. And the only person who’s going to know that is someone who’s been there a while and understands the logic of the company.
If you remove that element, then what kind of automation strategy can you have really?
Edward Brooks: Yeah, exactly. I’d love to know the percentage of larger organizations that actually bring in external parties for those consultants as our sources compared to the ones that just build it themselves.
And I don’t know if you’ve seen the statistics that often, because there is this feeling that we get involved when organizations have transitioned and when they’ve had someone doing it for them.. they usually go, oh no, our sales!
But it’s interesting that for the first 4–6 months there is this, ‘we’ll spend the budget, we will get started,’ but the questions about ROI, questions about expanding and getting deeper to the organization start to hit up against, well, who’s going to do this work kind of question. We can’t continue as we have done in the past with big consultancies or service providers.
But it does turn it into much more of an active conversation, rather than passively just having it done to us or to the client. They’re thinking of it, well, we have to go for boxes and learn this stuff.
So, I think it is a lot of hand washing the early months because to get someone else to do it is not sustainable.
Maria Terekhova: Yeah, it’s a bit of a cruel cycle one could almost call it. I mean, on one hand, clients are too passive, they assume that maybe service providers have the skills or resources that they don’t or don’t have time to cultivate themselves.
But on the other hand, service providers actually (as our data shows) don’t necessarily have as many resources with as deep experiences their clients are assuming.
So, in fact I’d argue that they’re being given double the responsibility load, without the expertise necessary to do both their work and their clients.
Edward Brooks: We talked to some of the suppliers, the platform suppliers, very off the record, their biggest concern is the overselling of this and the fact that it’s costs to deliver it and the sales message is so simple, but the delivery is going to be hard.
So, that’s just going to create its own problems for the industry generally, but for specific clients, they have invested the money. But, in terms of innovation, what are the best answers you’ve seen to solving this problem?
Maria Terekhova: Are you asking about a specific example or best practices?
Edward Brooks: A best practice, what you have seen work well or looks good?
Maria Terekhova: So, there’s several that we’re seeing. I mean, as we say it’s still early days, but some good ones to go by I’d say are, there definitely has to be a more aggressive education push than we’ve seen to date.
As you just said, RPA has been oversold to some extent, I’d say it’s time for everyone to start being honest, start setting realistic expectations about things like training, skill levels and effort that will be needed to get RPA off the ground.
So, I’d say readjusting expectations is a big ask. Second I’d say, ring-fencing training and retention budgets. This is especially important for enterprise clients. As I said before, we just haven’t seen evidence of such ring-fencing, it’s being treated as an afterthought.
It has to have a dedicated budget, there have to be effective training programs, whether that means partnering with a service provider or with someone else who can provide that kind of education.
In terms of service providers, I’d say making strategic acquisitions. I mean, we’ve recently seen Sykes by Symphony, we’ve seen Atos acquire Syntel, this can really help boost talent pools in the market where talents stay on the ground.
And above all, I’d say, pairing senior and junior resources within RPA teams that can really help the knowledge to percolate across different skill levels.
And again, for service providers, I’d say definitely building more regional centers close to their clients, that should be a major focus for investment, I think, because at the moment (at least from our data) we can clearly see that in the regions where service providers have the most clients, they actually have the fewest resources, which is interesting and kind of scary.
Edward Brooks: Yeah, the fact is that 80% of the world’s experience is in India and given the issues in many countries throughout the world, it’s very hard for organizations to get those people closer to where the clients are.
It’s a big structural issue globally and it’s not going to be resolved by us or anything we do.
The clients want locally allocated resources, they don’t care where they come from, but they want someone from early days in the industry. It’s a real barrier to successful growth.
Maria Terekhova: Yeah, but the good news is that a lot of the service providers we are talking to, they are investing really heavily in onshore resources and regional development centers. So, I’d say it’s going in the right direction.
Edward Brooks: Excellent. We’ve talked about the immigration stuff.
You put together training and retention budgets, can you just go a little bit deeper in that? About ring-fencing or training and retention together.
Maria Terekhova: Well, I’d say you can’t really — I mean, it doesn’t make sense to focus on one without the other. If you have such a small number, again, according to our research about 32,000 RPA professionals worldwide, obviously, there’s going to be competition for them.
So, it’s not just about finding these people, it’s about giving them an incentive to stay where they are.
Edward Brooks: We don’t see it from that angle, but I was wondering, did you see any organizations talking about training or retention in one breath? I was finding it in two separate conversations traditionally.
Maria Terekhova: Not necessarily in the same breath, but many in the same sentence, if I can put it that way.
Edward Brooks: What’s that same sentence?
Maria Terekhova: If you’re going to go through the trouble and expense of cultivating someone with deep RPA expertise, why wouldn’t you also focus on the longer term and make sure that they’re happy and challenged in a good way and happy to stay within the company?
Edward Brooks: I totally agree with the logic, just I hadn’t really seen that many organizations thinking that way.
Maria Terekhova: It’s not many, it tends to be, let’s say those with the resources to be able to both focus on training and keep their eye on the longer term. It’s not everyone.
Edward Brooks: Okay. I thought I was missing something there.
Maria Terekhova: No.
Edward Brooks: In terms of just closing message; what do you think is going to happen in the next one or two years? And obviously, the talent pool will get deeper just by the clock ticking but do you see other big trends emerging in the next couple of years?
Maria Terekhova: Well, what we’re seeing now is almost every single interview we’ve had with RPA enterprise clients, they’ve said in some form or another that they’re going through a major stage of disillusionment, basically with their approach to RPA so far.
They said that we probably should have done more scoping when we started, we used to think of RPA as a silver bullet, but we see that we have to step up and start doing something. What we’re also seeing is clients realizing that maybe RPA is suited to less use cases within their companies than they originally thought.
So, they’re casting their eye further looking at how to combine RPA with things like smart analytics and AI. And I think as this happens, maybe I’m being an optimist here, but I think enterprise clients are going to develop more of a holistic perspective on automation, which I think will drive them to try and connect more dots for themselves.
I think they’re going to realize that as they start trying to bring more technologies together within their processes and functions, they’re going to have to carry a heavier load and take on more responsibilities to ensure that they actually get ROI from these things.
So, I think we’re definitely going to see, let’s say, clients continue to wake up about the reality of how much effort this can take.
Edward Brooks: So, the forecast is the markets are going to wake up. Yeah, I couldn’t agree more. I think there’s this kind of a honeymoon because of the reality that someone’s got to wash the dishes or pay the bills when you get home. So, the honeymoon ends and I think it’s just a healthy kind of evolution.
Maria Terekhova: Absolutely, yeah.
Edward Brooks: It’s just very natural. I just think the scale that RPA has been talked about in being adopted, it just makes it much more different today than anything I’ve seen before.
Maria Terekhova: Yeah, because in some circles, it’s almost like RPA, at least in some eyes has become almost synonymous with automation, which I think is a heavy mantle to bear. So, I think this should benefit everybody.
Edward Brooks: Right. Maria, first of all, thank you very, very much for taking the time to do this, but more importantly, thanks for sharing your experience and knowledge. If anyone’s got any interest in the detailed report, it’s available on the HFS website; I can give you the details.
And generally I would always recommend the HFS research because it’s humorous, but also it’s going to the edge as well, it doesn’t really hold back it’s punches, which is almost refreshing.
So Maria, thank you very, very much indeed and I appreciate it.
Maria Terekhova: Thanks Ed. And good to know that it’s not just us at HFS laughing at our own jokes
Edward Brooks: Oh, yeah, it is always reassuring
Maria Terekhova: Thanks
Edward Brooks: Take care
Maria Terekhova: Bye
