The Zen of HRO

How does an HRO service provider achieve a Zen-like balance in HRO? Evidently, not very easily.

I recently wrapped up a research project on corporate relocation providers for one of NelsonHall’s buy-side clients. I wanted to summarize my findings across several bundles of criteria, and I selected financial risk management, participant care and client care.

In the case of corporate relocation, financial risk management includes a focus on helping clients manage home purchase programs. Given the challenging real estate market, a home buyout program can be a high risk and high cost benefit. The basic services and pricing models are very similar across the top tier of relocation management companies, so which service providers have better adapted to the changed home sale marketplace where many homes are underwater, worth less than the mortgage owed, or hard to sell amidst a sea of foreclosures and short sales?  

The reviewed vendors had all stepped up client policy review consultations, and now offer pre-decision services. This helps both the hiring/receiving organization and the potential hire or transferee gain access to all the information possible to make a balanced determination on whether to proceed. Good stuff to be sure. Still, what came across from several vendors was that if you offer fewer benefits and reduce coverage, you can save money. Being aware of total cost and where your company’s relocation policy is compared to industry benchmarks is helpful information, and some trimming may be prudent. Yet only a few of the providers showed an understanding that just reducing relocation benefits could jeopardize acquiring and keeping the desired high potential/ high performing talent.

I did find that several corporate relocation providers had improved capabilities in dealing with the current real estate market, offering increased consultative services and new online analytical and reporting tools to allow clients to keep up in real time with all potential and in-process relocations. 

Even though financial risk management was a current top concern, the client also wanted to maintain a high level of transferee satisfaction and work with a responsive service provider. When we went over my findings the client was a tad disappointed that no one vendor was rated at the highest rating across all three elements – financial risk management, participant care and client care.

The parallel is there to all of HRO. It is a tall order to deliver and balance over the course of multiple year contracts business impacting financial advantages with efficient and effective service delivery innovations and a consultative client relationship that adapts to the constant changes that is life in HR and modern business. 

When that balance is attained it leads to expansions of services and renewals. International Paper just added more services and extended its multiple process HRO contract with Hewitt for five more years.  International Paper was one of the first generation of major HRO deals with Exult in 2001, and it came with the problems and joint learning curve common to those early relationships. Ten years later, the client says Hewitt demonstrated its value as “our trusted HR partner” and “they come to us with new ideas, new solutions and innovative approaches. It’s only natural to extend our relationship.”

HRO service providers, how are you balancing the Zen of HRO?

Linda Merritt, Research Director, HRO, NelsonHall

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