The future of the field service workforce
August 8, 2019
August 8, 2019
Across industries from retail to healthcare, customers expect a flawless, highly personalized experience whenever they interact with a company. According to a recent study, customer experience has overtaken product and price as the main way businesses differentiate themselves. A positive customer experience can build lasting loyalty but today’s consumers are more fickle than ever, and won’t hesitate to switch to a competitor if they’re dissatisfied. New technologies are powering all of these customer experiences—from point-of-sale machines that enable self-checkout in a retail store to interactive kiosks for patient check-in at a medical clinic.
As technology transforms how companies interact with customers, field service organizations face particular challenges in adapting their business models to meet rising customer expectations. The need for skilled technicians to deploy and maintain the technology
required to create engaging customer experiences has never been greater. At the same time, companies are challenged to find new ways to cost-effectively source the talent they need in the tightest labor market in decades, with unemployment at a 50-year low. Workers in skilled trades such as electricians and HVAC technicians, along with IT staff, have the most in-demand skills in today’s labor market. Original equipment manufacturers (OEMs) of the technology products facilitating self-service customer experiences face a competitive global market with intense margin pressure. As a result, many manufacturers now provide services to supplement their traditional product offerings and generate an ongoing revenue stream beyond the initial device purchase. These OEMs have traditionally been “pure-play” service providers focused solely on service offerings for the products they manufacture. But, this dynamic is changing as customers prefer a “one-stop shop” for services across all of the product lines they have deployed. Contracting with value-added resellers (VARs), third-party maintainers (TPMs) and managed service providers (MSPs) is an increasingly popular way for companies to source field-service talent because these providers act as a single source for all services. In addition, they typically deliver these services at a lower total cost to end customers than multiple service contracts with OEMs because of their leaner cost structure. While established market categories exist for manufacturers and service providers, the lines between these companies are blurring, and many manufacturers now offer a combination of hardware and services to their customers.
The traditional field service staffing model—used by end customers, OEMs and service providers alike—includes hiring full-time employees with specific skill sets. This model of 100% full-time employees has high fixed costs, particularly given the rising cost of health insurance, training costs, and other employee benefits. In addition, the field service industry’s evolution from fixed-price agreements to event-based pricing makes it difficult to anticipate revenue and plan appropriate staffing levels. With increased uncertainty in revenue, companies risk over-hiring staff and diluting their profit margins. Furthermore, the larger a company becomes, the more difficult it is to optimize employee utilization. For example, if a company has 900 workers in the field, it would be nearly impossible to keep all 900 employees working 40 hours a week consistently due to fluctuations in demand for different skills and different projects. In addition, the company would have to pay overtime to cover spikes in work. The traditional staffing model also limits growth. Today’s customer experience-driven industries require a wide variety of specialized technical skills. However, OEMs and service companies typically focus on one segment of the market and hire accordingly. For example, a manufacturer of printers and copiers generally hires technicians who can service printers and copiers. They do not have the in-house expertise to service a customer that needs assistance with a networking project, and will miss that revenue opportunity. Customers want a one-stop-shop for service across their technology portfolio, yet it is nearly impossible for manufacturers and service companies to deliver all of the specialization required using 100% fulltime employees. Furthermore, the traditional model does not allow service businesses to keep up with seasonal spikes in demand, which is another lost opportunity for companies using an inflexible staffing model.
During the Great Recession, many companies began outsourcing their field service function to third-party service businesses in response to market pressure to shrink their full-time workforce. In addition to cost reduction, the outsourced model allowed these companies to focus on their core business, rather than managing a large field services organization. Field service outsourcing was popular for many years and offered several advantages over the traditional fixed staffing model. However, its limitations also became clear as many companies encountered issues over the quality
of service delivery, and sought more visibility and control over work outcomes.
In the past several years, the field service industry moved away from both the 100% full-time employee and 100% outsourced models. The modern approach to field service staffing has evolved toward using a blend of full-time and contingent labor. This trend takes advantage of the emerging “Gig Economy” and the growing number of self-employed technicians that organizations use to complement their full-time employee base. The direct-to-technician model gives companies more control over quality of delivery while allowing them to reduce costs, typically by 30 to 40 percent over full-time workers. Initially, companies have begun using this approach by creating and maintaining their own preferred contractor networks. While a direct-to-technician model is attractive from a cost and flexibility standpoint, a “do-it-yourself” approach is far more complex and potentially risky than it may appear on the surface. This model generally requires a dedicated vendor management team to handle the complexity involved with managing hundreds, or even thousands, of field service contractors. From a technology standpoint, do-it-yourself solutions quickly become outdated, are difficult to maintain and are cumbersome to integrate with other tools.
In this model, the hiring company is responsible for:
A new workforce model has recently emerged that gives companies the cost advantages of a direct-to-technician approach without the complexity of managing a contingent workforce. Used by both OEMs and third-party service providers, the platform-enabled, direct-to-technician model improves both the efficiency and quality of service delivery.
This model provides the benefits of a network of pre-qualified technicians and access to a platform that offloads the complexities of contractor management, including:
New platform-enabled, field service communities are emerging in response to the market need for cost-efficient, high-quality field service talent. Here are a few essential qualities to look for:
Access to specialized contingent labor — combined with a platform that takes the complexity out of managing a blended workforce—makes it possible to fulfill customer demand in a way that would be time- and cost-prohibitive with other staffing methods. Using a platform-enabled field service network, companies can optimize the cost and quality of their field service workforce while setting themselves up for growth.
Faces of Field Nation is designed to lend some insight into how we operate and what makes Field Nation tick. Meet Senior Account Manager, Gina Schultz, who works with existing customers to help them grow their business using Field Nation’s tools and functionality.Profile
While meeting increased demand for skilled labor is a formidable challenge, understanding how to leverage this changing workforce doesn’t have to be. You can download our infographic for the highlights or get your copy of the full report for more insights.Infographic
Bobby joined Field Nation as a contract technician in 2010 and has enjoyed the flexibility and variety of work opportunities ever since. “I like the freedom to build my own schedule on Field Nation. I can work above and beyond my normal shift to enhance my family’s life.”Blog