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Thursday
Nov172016

Shared Services Finds a Home in Latin America

Image © Gensler

This post is part of a series of blog posts on Gensler’s 2016 Workplace Surveys.

As globalization takes on new meaning, once isolated markets are now part of a global and expanding marketplace. Many global companies have invested in Latin America strategically as a hub for their Shared Service Centers, which have proven to optimize administrative functions in a more cost effective way.

According to Tholons Top 100 Outsourcing Destinations Report, 24% of the “Top 100” Global Outsourcing Destinations are located in Latin America. San Jose, Costa Rica is ranked as the number one city of Latin America in 2016, followed by Curitiba and Sao Paulo, Brazil at numbers 26 and 27 respectively.

What is a Shared Service Center (SSC)?

In many organizations, it’s the entity responsible for the execution and the handling of specific operational tasks, such as accounting, human resources, payroll, IT, legal, compliance, purchasing and security. Many Fortune 500 companies have established SSC’s in Latin America from a variety of industries. Everywhere from financial firms, pharmaceuticals, consumer good companies to a rising influx of technology mega-corporations.

Latin America is becoming increasingly attractive as a location for SSC’s due to its increasing labor pool, sustainability, soft skills and technical capabilities. However, over the past 5 years SSC operations in the region have evolved from typical transactional models to more sophisticated value-added services. In particular, greater access to technical education, and a generally more skilled and mobile global workforce, has fueled the spread of services outsourcing and with that, the competition for top talent has become a key driver for many of our global clients.

All of these factors together create a very unique challenge for companies looking into Latin America for their shared service offerings. Companies from a variety of industries converge in the search for top employees and find themselves competing for the same talent pool.

Finance and accounting firms may be leading the charge of business offerings in the region, but they are finding themselves struggling as they compete with a wide variety of companies that offer more attractive spaces and amenities to the same group of skilled professionals.

Image © Gensler

Being Local

The first thing many of our clients look for is cultural relevancy. Most global companies have come to learn that a good balance between local and global business culture is the most effective way to engage employees.

Contrary to popular belief, Latin America isn’t one monolithic whole, it’s a mix of individual cultures with unique economic policies and politics as well as social behaviors. But across the region, demographic shifts in age and gender are driving changes in how the workplace reflects the needs of its employees. Another important consideration is that Latin America has a predominantly young work force, on average, between 16-44 years of age. This means that the push for technology and choice in the workplace is at the top of the list for many employees seeking opportunities. With an increasing female presence, especially in leadership positions, work-life balance is also an important factor. As of 2014, the ILO reported that for the first time in history, more than half the women of working age are in the labor force. The increasing presence of women in the Latin American workplace, especially as they rise to leadership positions, makes the question of work-life balance an important and new factor for employers to consider.

Key Drivers

Keep in mind that service centers are not call centers or back office operations typically characterized as high-density, low-mobility and low-cost driven. The nature of these centers and the services they provide require well-designed, well-balanced and well-branded spaces that reflect the values of the company and embrace local culture. They are not typically bound by a design standard or guideline but tend to look like the younger brother or a distant cousin of a customer-facing or headquarters office. How do we stay away from this phenomenon and create environments that engage and attract the best professionals in the market.

By nature, the purpose of a Shared Service operation is to achieve efficiency in processes, therefore efficiency becomes a top priority. But how to you create efficiency without losing focus on creativity and innovation.

When it comes to efficiency, cultural considerations of the ways in which people work are key. Gensler’s 2016 Workplace Surveys in the US, UK and Asia find that knowledge workers around the world spend almost half of their at-work time collaborating with others. In our forthcoming survey of Latin American workers, we’ll find out how rates of focused work stack up against more collaborative and social time in the workplace across the region. We see this happening informally with many of our clients already who we work with to create spaces with bold branding that connects to the larger company and its values, builds teams and creates a sense of belonging. From our own experience across Latin America, we’ve found that workers are naturally inclined to work in teams and share ideas, solutions and ask for feedback, even on individual tasks. More importantly, we’ve found these moments to be the building blocks for creating cohesive, thriving workplace communities.

SSC’s can easily become incubators for companies to explore different work styles and push the envelope on traditional office space. We see this with many of the clients we serve to create spaces with bold branding that connects to the larger company and its values, builds teams and creates a sense of belonging.

Image © Gensler

Bacardi’s Shared Service Center in San José, Costa Rica is the global headquarters for finance and accounting. The most significant challenge was to create a space that connects the personnel that provides services to a variety of Bacardi offices around the world to the brand. The Bar is an essential icon of all Bacardi offices and it is used to celebrate the products and invite clients to experience the brand. Typically “owned” by marketing and sales groups at front office, it was important for our client to ensure that the same experience was created for the Costa Rica site as well. The bar and adjacent lounge spaces have become a gathering place for employees to have lunch or coffee as well as collaborate.

It’s an environment where these workers can live and experience the message and values of Bacardi and an opportunity for that message to infuse the company’s core business functions.

Image © Gensler

Similarly, at VmWare, a cafeteria space demonstrates the company's understanding of the importance of the extended social-meets-business lunch hour common in the Latin American workplace. The space takes inspiration from the volcanoes of Costa Rica’s central valley, and provides room for programmers and accountants alike to enjoy the laid-back amenities rich environment of a tech firm, translated with a bit of a millennial latin flair.

In the end, for any global company investing in an SSC, the key is a long-term vision with buy-in at all levels and a comprehensive change-management process to create systems and engage employees through what can be a long-term transition project.

Jessica leads a workplace design and strategy studio in Gensler's Costa Rica office. She specializes in the Consumer Goods and Technology Practice Areas and has collaborated on projects throughout Latin America. Her expertise in workplace and sustainability is featured in publications such as Casa Galeria, Su Casa, El Financiero and La Nacion. In 2015, she was selected as one of the top 10 women who inspire by The Costa Rica Chamber of Construction, which recognizes women’s excellence in their fields. Contact her at jessica_garcia@gensler.com.