The Talent Challenge in the EPM Market.

It is often said, A community of businesses operating within the same market is similar to a large garden. Where plants are competing for nutrients, whether it’s water, light, or territory, Companies compete, for clients, the best team and market share. Plants are competitive, similar to companies, They often will compete and fight over territory with their counterparts, but they are also constantly growing themselves organically, whether it be in size or new leaves and sprouting new roots. Companies are increasingly fighting over talent.

In a rapidly expanding tech software eg, Anaplan, there are often stages of growth which are crucial to the longevity of the eco-system it has created. In the beginning, there is the organic growth of talent straight from the vendor. This organically grown talent will then work with clients to develop talent within the client to coincide with the project requirements. As the market develops, the original talent from the vendor will often part ways and lead the growth of partner organizations, where again talent will be created with project requirements internally, creating a steady and healthy input of skills into the market.

However, this method only works when the market growth is steady. Training people takes time and resources. So when the market begins to expand exponentially, and organizations are in need to grow their teams, they are forced to try and bring new talent on board from other organizations.

In a tech/silicon valley style of market, companies are often very good at realizing the need to look after their workforce, All generally offering the perks and frills that come with working in such market, Flexible working, great pensions and more. Generally there is not much difference in working for one company or the next. This leads to the main differentiation factor being the least talked about but most important… $$$. However much people like to play it down, Money Talks. So companies are left with one option to bring talent from their competitors, pay more than them.

It”s an economist’s near on ideal market, A group of relatively homogenous products (Companies) with very little differentiation, increasing their demand with no real increase in supply. Basic economics then tells us, prices, or salaries, will rise. In the short term, this is natural, salaries will grow with the growth of the ecosystem.

But, this can go too far, In the Anaplan market, the growth of users has rocketed, meaning more consultancies and consultants needed to carry out the ever-increasing complex implementations and projects. Consultancies have had no choice but to expand their teams through headhunting from other partners. This is good to a certain extent, it allows new idea’s to transfer from company to company and the overall service to the software users will benefit. When, however, demand pushes salaries too high, it can have a very damaging effect on the eco-system as a whole.

Increasing salaries leads to higher costs, higher costs of production can either be taken away from the companies profit margins or put onto the client to pay. If they move the cost to clients, then the cost of implementation and management of said software or system increases. This then may then lead to clients opting for a cheaper alternative, even if it is of less value, to stay within budgets etc. Decreasing the competitiveness of the product and a fall in growth.

The higher salaries, will often also decrease new entrants to the market as the barriers to entry will rise. Going back to the garden analogy, what makes a good garden? A range of individual, unique plants all contributing to their eco-system for the overall growth. If fewer companies have the incentive to enter the eco-system or are pushed out due to higher costs, there is a large risk of monopolization of the market, which can lead to reduced overall growth and development.

In the Cloud EPM market at the moment, there is 3 clear software leading the way, competing to push ahead and become the clear front runner, Anaplan, Oracle and Adaptive Insights. Oracle has historically in any market they have challenged, been able to keep costs low through synergies achieved across its company and capitalizing on economies of scale. For the other 2, A key component of their success will be managing the costs associated with their product.

In order to stay competitive, the vendors must work with the partners in the eco-system to develop talent. This involves opening themselves up to people with more diverse backgrounds, improving management structures to allow more juniors to be brought on board a company, and to link back to myself, work with good recruiters, who will place candidates where they will flourish and develop.

The one thing that cannot be the same across different companies, is the people. In my time there have been countless occasions, whereby knowing my clients and understanding my candidates, I have not sent CV’s to clients, which on paper they are technically fantastic, but I have known that the personalities within will not match. So invest time into your recruiters, go for lunch with them, grab a quick coffee and do not just keep into business, allow your personality to come across, so the recruiter can from an impartial point of view (unattainable to an internal team) introduce candidates who will slot into your team seamlessly.

The development of the Anaplan eco-system and any similar community is built upon adopting a Kaizen style mentality of continuously developing and looking for any opportunity to develop talent organically and expand the eco-system. When executed well, it is a game-changer.

A balanced Eco-System is achieved when there is a good level of new talent introduced, balanced with movement within the eco-system. If it is too heavy on either side then negative effects will follow likewise.

https://www.linkedin.com/pulse/balanced-eco-system-callum-mccormick/