Neotalent without borders

Neotalent evaluates rebranding and bets on offering Capacity Services

One year ago, the company got out from under Novabase Group’s wing to affirm itself as a top tier company in one of IT’s most challenging areas: talent recruitment and management. A year later, Neotalent’s Managing Director explains what changed, analyses the results and talks about the new service that reinforced the company’s portfolio, promising to conquer new clients in Portugal and beyond. Célia Vieira recognises that finding and managing talent is difficult, but believes that the market hides a series of promising business opportunities.

Neotalent is coming out of a year of rebranding and strategic repositioning. Is the evaluation positive?

The evaluation is very positive. It even exceeded our expectations, be it concerning clients or collaborators. In terms of positioning, the market now has a clearer idea that we are what we do. We were born in the Novabase universe, and that’s very important to us. It marked and shaped us very much, but we felt the need to have our own identity and to assert ourselves in the market. The rebranding aided in this, in helping create the Neotalent brand. It became much clearer what our business is within the Novabase universe, what we do and how we do it.

What changed?

Up until this point, we always communicated ourselves as Novabase, but there are many different businesses under that roof. This generated much confusion in the market because it didn’t understand if Novabase was more connected to staffing, talent and recruitment, or to the delivery of technological projects and solutions. The truth is we’re companies with different core businesses, and that often confused clients and candidates. The most significant change was in clarifying all this. We assumed before the market that within the Novabase universe, there’s a company called Neotalent that works the talent area.

Did this change force you to revise your strategy and market approach?

In truth, the process was a little the other way around. The new positioning and rebranding are consequences of that strategic change, not the inverse. When we understood the importance that digital transformation would have on the market, and analysed the changes and Novabase Group’s new strategy, we also understood there’d be a space to explore. We concluded that to occupy that space, we would have to reposition ourselves in the market. It was the desire to occupy that space that led to some strategic redefinitions.

Did the market respond in a positive way to that change?

Yes, it did. Every time you clarify a message, the feedback is positive, and you end up with a good return. In our case, that clarification allowed us to have a voice, an identity of our own. This reflects on many simple things, but that for us were fundamental and didn’t exist, like, for example, having a site of our own to communicate. We communicated through Novabase’s site. We started using our specific channels to communicate, and that brought us, here also, a significative change in the way we presented ourselves to the market and in our message.

Does this Independence allow Neotalent to spread its wings? How far do you want to go?

One of the most critical aspects of this strategic redefinition was expanding our service offer. For many years, we offered IT Staffing; it was what identified Neotalent. By understanding which space we could occupy and the IT market evolution, it was easy to conclude that an exclusively staffing brand wasn’t enough. We had to create an ampler service offer, enrichen our portfolio and bet on a new market positioning. It was in this context that the new Capacity Staffing area emerged. Seeing as it started from our core staffing service, it’ll end up adding more value to our clients. We’re no longer only providing talent; we’re sharing the risk, adding management and delivery.

What’s now on the table for clients?

What’s always set us apart are our knowledge availability services, the offer of the perfect match – the best consultant for the best project. This is our core. But we started understanding that for digital transformation projects, clients would need not only teams but also management from our side. We now share the risk of knowledge delivery with the client, and, in the future, we also want to assume the responsibility of output. With staffing, the work context is made up of the client’s, Neotalent’s and even our competitors’ people. With this service, we’re the ones who manage the whole team.

What does that management involve?

It involves defining and distributing tasks and accompanying their development according to the desired quality and deadlines. When before we’d allocate a resource to a client and they’d be responsible for the management, quality and success of that mission; with our Capacity Services, we assume that responsibility. There are then various levels of commitment. I can, for example, commit to a certain capacity based on hours and specific know-how. What this means is that I guarantee the hour baseline, no matter the number of consultants involved. This is a very different model from staffing. Here, I assume the hours, know-how and capacity. The client isn’t “paying for the person”; they’re “paying for competencies”.

Do clients understand this new approach? How many have adhered?

We have four clients in Portugal that have adopted this new approach. We already worked in the staffing model with a few of them and ended up evolving to the capacity model. In some cases, the push was ours; in others, the client wanted to take that step. We also have two international clients, one of which started straight off with this model. At this moment, this is our flagship for nearshore business, another of our bets. Our Capacity Services are also available outside Portugal

Who’s the client?

An Irish bank. We’re responsible for the remote maintenance of critical systems, a core part of their business. The management is on our side. We evaluate tasks, their distribution and evolution, discuss tendencies, and study how they apply to the client’s roadmap. The client highly values this exchange of ideas. It’s a way in which we distinguish ourselves and cement the new positioning - it has to be tangible, felt.

Do you have defined targets in terms of industries in the market?

No. We’re in all sectors, with a very asymmetric distribution, but present in all of them. Financial Services is a crucial area for us, but our strategy doesn’t include that type of segmentation. On the one hand, the types of services we have allow us to work in various sectors; on the other, the classic sectoral segmentation logic is falling and the barriers between sectors, fading.

In terms of the weight they have on Neotalent’s business, how do you foresee the staffing and capacity services distributed in the future?

In our business plan, staffing continues to be a core business, but there’s a tendency in larger companies that shows they prefer less staffing and more service contracts that share management and risks. This is, as a matter of fact, a market tendency throughout the world. In 2019, we had a business volume growth of about 20% - something incredible for a twenty-year-old company that bills almost 40 million. Presently, the market has started asking for Capacity Services, but staffing still has significant relevance. I think that 50/50 is a good prevision for the medium term.

Are big opportunities in Portugal or do they come from abroad?

The expectation is for the larger contracts to be made here. Questions about nearshore typically come from smaller companies who need to complement their teams with resources that have precise know-how. When the projects have a larger dimension, the client comes to Portugal and creates skill centres.

What are Neotalent’s ambitions in terms of international expansion?

We have to clarify what international expansion is. The classic expansion that involves opening offices in another geography isn’t part of our plans. Our international expansion ambitions are connected to nearshore. From an international point of view, we don’t wish to follow any other process. This new service accelerates our bet on nearshore primarily because from an international point of view, we’re investing in capacity services, not staffing.

Do international companies better understand this model than the national companies?

It depends on the countries. There are countries where it’s incredibly challenging to explain staffing, but very easy to do so for capacity services, being this the case for the UK. But in France and Spain, for example, staffing is more common. In truth, staffing is the basis for capacity services. We’re talking about an extensive service offer that includes talent and capacity, and, as we add management and risk sharing, we’re able to reach different deliveries. In Portugal, it’s not complicated to explain; we’re just still very held up on the concept of staffing. We have to be able to show the client that new solutions can answer their needs more effectively.

Which is Neotalen’ts value proposition in comparison to market competitors? How do you differentiate yourselves?

In attitude, credibility and trust. That’s the client feedback. We prefer to lose business but present a solution that effectively solves the client’s problem. From the talent point of view, I think that the big difference is in the opportunities we offer. We work with many clients, of different dimensions and from distinct areas. It’s a broad spectrum. This is a huge advantage nowadays due to the flexibility that talent demands. We can offer that mobility within Neotalent itself. The great challenge facing companies at this moment is to provide their workers with different experiences so that they don’t go looking for them somewhere else. This is a brutal challenge for companies.

Is motivation the biggest challenge in talent retention?

What we see today is that the duration of the motivation, especially in younger groups, is inferior to the duration of the mission they were assigned. In terms of management for companies, this is a big problem. Experience tells us that, if we can’t answer to talent’s expectations and motivations, we’re going to lose them very quickly.

How do you balance out the need to satisfy clients and talent?

In an initial phase, through perfect matching. The clients trust our validation. For us, it’s very natural; we have processes and methodologies that are very fine-tuned, and we have the necessary experience. Sometimes, the more significant challenge is maintaining. The client wants to continue with that consultant, but they want a different type of experience. We explain that it’s impossible to run from undesired turnover, so the only way we have of controlling it is to provoke it ourselves. It’s preferable to commit to a particular person being on a project for a specific time and then execute the planned handover than to lose someone in the middle of a critical process. All this requires very complex management, but it allows us to reduce turnover. Either way, we have no alternative. Talent is so scarce that we have to invest in retaining it.

Given the current reality, what are your expectations for the rest of 2020 and what differences are there with the original estimates?

What’s happening in the world right now as a result of this pandemic is brutal. Few things are going to remain the same. From a business standpoint, the impact on the installed base hasn’t been, up to now, very significant. The most considerable impact relates to the acquisition of new business. Our expectations for 2020 pointed towards relevant growth which now won’t happen.

Our expectations and all our focus are now, on the one hand, directed at protecting existing business, reducing or compensating negative impacts and, on the other, on the development of conditions to more rapidly return to growth as soon as 2021. So, from a commercial standpoint, we continue to make a great effort, knowing that it’ll be difficult to have significant sales in 2020. We’re taking the time to position new services, to show ourselves, to plant seeds for the future.

How do you see 2021?

It’s difficult to anticipate how next year will be. It will depend enormously on how Covid-19 behaves. If there’s no second wave, I believe in a quicker recovery and an active IT sector with some of its dynamics even more accelerated than before.