Archive for the ‘compensation management’ category

ADP has a Platform for HRO Success

October 11, 2011

Last week, many of us covered announcements from the HR Technology conference.  Among the new service news was ADP’s Vantage HCM SaaS and BPO platform, which was formally launched on October 3rd at HR Tech.

Vantage HCM covers HR administration, benefits, payroll, time and attendance, and talent management. It is an enhanced version of ADP’s successful Workforce Now platform, which was launched in October 2009 and already has more than 10,000 clients. ADP is estimated to have invested 18 months and $600m in the new platform. General availability is slated for March 2012 to allow time for full testing of critical high volume HR activities such as annual open enrollment and end-of-year payroll with 12 pilot clients from a variety of industries with 1,200 to 20,000 employees.

I see a bigger story here: ADP has built a business platform to support execution of its strategies. Here are several elements I see in play.

Support the core. ADP is adding new services while protecting and enhancing payroll, its single largest revenue generator. Payroll is built into the core package of each multiple process HR (MPHRO) system.

Serve your main markets. In payroll, ADP supports every size organization. Now, it offers MPHRO platforms for nearly every size organization: Workforce Now provides core HR needs for less than 3,000 employees; Vantage HCM covers more robust HR needs and talent management for up to 20,000 employees; and Global View supports large, multi-country organizations typically with more than 20,000 employees.

Leverage acquisitions.  Vantage HCM talent management services include succession planning, performance management, and compensation management as the fruits of collaboration between ADP and Workscape, which was acquired last year.

Reuse development investments.  Vantage HCM uses “plug and play” design for fast and easy additions, integration of new modules, or preferred partners, such as Cornerstone for learning.  Access will be immediately available from multiple devices including smartphones, another benefit of development reuse.

Roadmap development and growth. Workforce Now and Vantage HCM are U.S. services. Both will be expanded to Canada, with Workforce Now ready in 2012. In the future clients will be able to choose the basic benefits module or Workscape services for more complex benefits needs.

Buy, build, and go. ADP prefers to buy or build for strategic growth services. It chose to build its own proprietary MPHRO systems. It acquires complementary service lines and players in geographies to quickly establish a beachhead with top tier players. Once it identifies a target, it moves fast, integrates new acquisitions and captures synergy savings.  (ADP just announced acquisition of The RightThing for RPO. Acting fast indeed!)

Go your own way. Most MPHRO providers offer HR analytic packages as an added cost option. ADP is building in related data views, dashboards, metrics, and integrating workforce analytics use right at the point of need.

Do you have a business platform as broad and consistently used as ADP’s?

Linda Merritt, Research Analyst, HRO, NelsonHall

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Compensation – a Critical Component of Performance Management (and a Process Ripe for HRO)

September 3, 2010

Let’s cut to the chase here. While compensation is not always the primary reason people change jobs, I think we’ll all agree we should be appropriately compensated for the work we do. And while it can be challenging and time-consuming for companies to find the data they need to determine market- and role-appropriate salaries, not doing so can lead to loss of top talent. This issue came top of mind to me because of two occurrences this week.

First, Kenexa on September 1 acquired Salary.com for approximately $80 million. Kenexa provides talent management services including RPO and performance management – both software and advisory services – and additional talent management services that help improve employee engagement and retention. In addition, Kenexa’s 2X Perform Platform (which will be available H2 2010) will contain performance managment components including goal setting, appraisals, succession planning and compensation management. Salary.com provides compensation software and content. In addition, it has a database of compensation information across thousands of job positions. The acquisition of Salary.com not only enhances Kenexa’s ability to provide compensation management; having Salary.com’s benchmark database will enable Kenexa to help its clients ensure they are paying their employees market-competitive salaries to aid in talent retention. 

Second, on its September 1 analyst briefing upon completion of its acquisition of Workscape, ADP not only spoke about the merits of Workscape’s benefits administration capability, including health and welfare, but also about the importance of Workscape’s talent management capability, notably its compensation planner. ADP today provides performance management services including succession management and learning management, in part via its partnership with Cornerstone OnDemand, With its acquisition of Workscape, ADP has added compensation management to its performance management offerings portfolio.

The importance and impact of compensation as an integral component of performance management cannot be underestimated. While supervisors are, and will continue to be, ultimately responsible for performance management, including compensation, they need the right tools, technology and insights to effectively do the job. HRO providers that offer the full mix of performance management capabilities – robust tools and technologies, as well as advisory services – are best positioned to support their clients performance management needs. And there is definitely opportunity for growth in this space. According to NelsonHall’s June 2010, “HRO Issues and Opportunities” report, only one-third of buy-side executives have outsourced compensation administration, and it is the second least outsourced service/component of multi-process HRO deals.

My advice? Providers, beef up your compensation management offerings, either organically or via partnerships or acquisitions. And buyers, evaluate your current compensation management capabilities. If they fall short, either due to lack of insights or resources, consider engaging the services of an HRO provider with expertise in this process. You have everything to gain by ensuring talent retention through the right compensation plans.

Gary Bragar, Senior HR Outsourcing Analyst, NelsonHall