Most bulge-bracket investment banks are aggressively reducing their headcount or limiting the number of new positions available and have been looking to leading KPOs to pick up much of the slack. As the work being outsourced these days is similar to what an internal research associate or analyst would do, KPOs have become a breeding ground for developing talent.
KPOs have now expanded their operations to gain a “research edge,” allowing clients not just to look for cost efficiencies but focusing more on domain and regional expertise provided.
In the past, much of the KPO space was hampered by higher-than-average attrition rates as KPOs typically based their operations in low-cost countries to capture wage arbitrage. Interestingly, leading KPOs have now expanded their operations to gain a “research edge,” allowing clients not just to look for cost efficiencies but focusing more on domain and regional expertise provided. To attain region-specific expertise, KPO providers are tapping local talent by establishing research centers in countries such as Chile, Argentina, China and Romania.
Another clear sign that the KPO industry is shifting its focus from cost to knowledge efficiencies is the significant halt in headcounts at captives. A recent study by NASSCOM-Everest that examined the arbitrage opportunity for India’s outsourcing industry concluded that the “arbitrage window” may diminish in the medium term, providing several scenarios that include a range of currency and inflation rates. Given this stark view, it comes as no surprise that firms are shifting their strategy with respect to their own captives and third party providers are seeking ways to remain competitive.
Top talent that understands the work is similar to an internal role and also wants to gain experience across different investment banks and investment management firms have made the KPO space their sector of choice. “We have seen an increasing number of analysts ask about roles with KPO firms recently, especially from the investment banking sector where hours are long and job security is becoming increasingly tenuous,” says Amar Gautam, managing director for N.Y.-based recruiting firm, Archive Partners. “Initially attracted to the KPO space for lifestyle reasons, analysts are now looking to KPOs for the quality of work being performed and the exposure.”
KPO firms provide a platform of knowledge and experience through a vast array of engagements that the firm has.
While an investment banking associate will often work directly with one analyst or team, KPO firms provide a platform of knowledge and experience through a vast array of engagements that the firm has. While engagements adhere to the strict confidentiality protocols most banks have in place, the depth of learning is something that KPO analysts have found to be a valuable addition in their toolkit.
An analyst can complement their educational knowledge with hands-on experience based on the specific processes and methodologies that are built for a predefined set of deliverables. In essence, the KPO space takes the art of research into a more structured format similar to what top-tier consulting firms have been doing for years. What’s required is for bright minds to be able to execute these processes.
The training process within the KPO space is rigorous, yet hands-on, as training modules are often created for different deliverables for a specific set of clients.
The training process within the KPO space is rigorous, yet hands-on, as training modules are often created for different deliverables for a specific set of clients. In one instance, an analyst will work directly for a multi-billion dollar hedge fund manager, giving them an opportunity to learn and develop their skill sets according to that client’s requirements.
When an analyst grows out of their role, they don’t need to search for another job, but just request that their skill set be used for a more advanced client engagement. It is in this type of environment where a steep learning curve never appears to end. For a willing and able analyst, this is a real asset to their portfolio that can be amassed in a relatively short time frame. This has been a key driver for the industry, as an analyst can gain experience within just a few years that is equivalent to working at several leading financial firms.
KPO’s often work with the Who’s Who of investment banks, hedge funds, venture funds, research firms and asset managers across different regions and sectors, making them an attractive way for analysts to gain essential investment research experience. As many financial services firms aggressively recruit from top KPO firms, it is astounding that many analysts opt for more experience rather than the near-term monetary gain. Gautam added, “Today, KPO recruiters are regularly competing with investment banks for the same talent. This was not the case three years ago.”
The growth within the KPO space has also created the opportunity to build a solid career track in the sector. For those aspiring to move up the corporate ranks into a senior management role, the fast pace and people-centric environment of a KPO firm provides a great setting for leadership development. As many leading KPO firms post high double-digit employee and revenue growth figures, grooming internal leadership continues to be an important area for this industry. Managers are required not only to have domain expertise and manage a large team of analysts but also have the ability to manage growth in a fast-paced multilingual and multicultural environment.
KPO firm provides a great setting for leadership development.
One must wonder if these analysts joining KPO firms are running the numbers to assign a value to experience that’s greater than cash in hand. It’s reminiscent of the calculations most MBA graduates made prior to entering their respective programs.
Source from: Indusbusinessjournal.com
