Differentiating HRO – Use What You Know

How many ways can a HRO vendor differentiate?  The lowest total cost, the latest and greatest in technology, the broadest range of services in the most places, etc.?  When there are multiple reputable service providers, vendors have to reach further to create HRO differentiation.

In the early days of HRO, it was sufficient for a vendor to provide services that were as good as what had been provided in-house, becoming the base of most service levels (SLAs).  HRO vendors quickly found that meeting SLAs did not equate to overall client satisfaction, with clients stating that while they may have been getting what they contracted for, they were not getting what they wanted or needed.

Today, “as good as” is not good enough.  HRO service providers need to know more than the client in each service area.  Knowing more may be in the form of compliance and reporting expertise, local knowledge of covered geographies, advanced application use, or even change management expertise.  Client confidence that the selected vendor does indeed “know how” is important.  Confidence that the vendor will be a partner in what happens next is even rarer and is a key differentiator that top tier HR clients seek.

Times of uncertainty create opportunity to build client confidence with your ability to see around corners or at least keep up with the twists and turns.  Consulting capabilities are particularly important in HR.  But, even top consulting capabilities will not build the HRO practice if there is no flow-through of learning and innovation as well as improved process and performance.

Many HRO service providers with roots in consulting offer forward-looking research, publications, webinars, and even conferences to help clients keep up with best practices, new trends, and regulatory happenings, all while demonstrating thought leadership and subject matter expertise.  Many names come easily to mind including Accenture, ADP, Aon Hewitt, Ceridian, IBM, and Mercer.

For example, Towers Watson has published human capital research and recently released its latest HR services report.  Kenexa’s client conferences also offer sessions of broader related HR practitioner interest.  Finally, Infosys provides a good example of application expertise and consultative relationship management when it brings tailored ideas to clients on how they can improve their processes.

Vendors that offer multiple service lines or are an industry leader in a particular area can cross data streams.  Think of ADP’s weekly report on employment or Administaff who has PEO trends that show which U.S. regions are leading and lagging in returning to growth for the small business market.  Also, ACS, a Xerox Company and IBM support client interaction opportunities that can lead to innovation communities.

How can data from IT, F&A, or even Ceridian’s Pulse of Commerce Index be tapped for HRO?  Think about how you can go beyond the obvious and use everything in your kit bag to develop leverageable and differentiating HR and HRO insights.

Linda Merritt, Research Director, HRO, NelsonHall

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2 Comments on “Differentiating HRO – Use What You Know”

  1. Insuvai Says:

    If you analyze the current trend, customers are looking ‘outsourcing’ more than just a cost slicing tool. Being niche player in HRO, I found most of our clients look for betterment and something out of box thinking. As rightly said above, doing same payroll at same low cost with good SLA doesn’t differentiate you from others, but the extra flavor which you add becomes the trump card.


  2. [...] This post was mentioned on Twitter by Insuvai Arumugam and Insuvai Arumugam, Karen Turner. Karen Turner said: Differentiating #HRO #RPO – Use What You Know: http://t.co/UcaOFoh [...]


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