Countdown to the 2013 HR Technology Conference

Gary Bragar, HRO Research Director, NelsonHall

This year’s HR Technology Conference, less than 10 weeks away, will be back in Las Vegas October 7-9 (please note onsite rooms are going fast, I had to stay at alternate hotels the past two years!).

With 6,000 people from 28 countries attending last year, I continue to find it an invaluable investment of my time to:

• Attend presentations
• View technology exhibits
• Network with peers
• Meet individually with companies that I do business with and others I want to learn more about.

Presentations: Session topics include:

• Strategic View
• Talent Management
• Social in the Enterprise
• Workforce Analytics and Planning
• HCM and Workforce Management
• Recruiting
• Service Delivery
• Expert Discussions & HR Tech Talks.

Be sure to check out the agenda at: http://www.hrtechconference.com/agenda.html

Highlights of just a few of the many presentations include:

• High-Tech/High-Touch RPO: What the Doctor Ordered for Boehringer Ingelheim – presented by Corry Ioli, Executive Director, Talent Management & Acquisition, Boehringer Ingelheim and Sue Marks, CEO, Pinstripe
• Goldman Sachs Buys RPO Eyes (and Hands) for a Quarter Million Resumes! – presented by Tom Osmond, Global Head of Talent/HCM Solutions, Goldman, Sachs & Co and Regina Lee, Division President, ADP
• HR Tech Talks, presenters: I Come From the Water: Evolution of the Modern Manager, Kris Dunn, CHRO, Kineti; Clowns, Sharks, Anemone and HR – What Do They All Have in Common? Mary Sue Rogers, Global Managing Director, Talent 2
• How Mobile, Social and Gamification Tools are Improving Employee Health – presented by Barry Hall, Principal and Innovation Leader, Talent & HR Solutions, Buck Consultants and Scot Marcotte, Managing Director, Talent & HR Solutions, Buck Consultants.

Whether your company has outsourced or continues to do everything internally, there are bound to be several sessions where you can learn how to improve HR in your organization and be a better business partner. When I was on the buy-side prior to joining NelsonHall, I would attend such HR conferences to:

• Learn about the broader industry
• Think about how our HR outsourcing contract compared to others
• Get ideas on improvements we could make.

Technology Exhibits: Since technology is changing so rapidly, it is often difficult to keep up with new applications that are available. The conference is a great way to get exposed to a broad-range of recent innovations. You can stop by any booth and see a demo. There is no pressure and vendors are excited about their new products and services and are happy to show you more.

So here is your chance to make a difference at your organization; you might stumble onto a better, more user-friendly technology for example. Even if you are not the decision-maker, you can always tell your organization about it when you return and request a customized demo. Alternatively, if you are already outsourcing, you might see something that you don’t have and can bring it to your provider’s attention.

Network: The conference provides an opportunity to expand your network with others, including HR practitioners, buyers, providers and analysts, etc. In addition to the daytime events, there are evening socials too. HR deserves to have fun!

As a reader of my blog you are entitled to a discount. Just use the Promo Code HRO13 (all caps) when you register online at: http://www.HRTechConference.com/register.html to get $500 off the rack rate of $1,895. The discount does not expire until the conference ends on October 9, 2013.

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NGA’s Broadening Offerings

Liz Rennie, HRO Research Analyst, NelsonHall

Last week we attended the Advisor & Analyst Summit with NGA where CEO Adel Al-Saleh presented the highlights for FY2013 (up to 30 April 2013) and described the company as an “IP-led HR services company.” Focus was given to the company’s ability to support global payrolls, whatever the HRIS platform, as NGA supports multiple platforms such as Workday, SuccessFactors, PeopleSoft, Oracle and SAP. Further, NGA announced that BPO agreements are in place with all the above-mentioned technology companies.

NGA serves all size companies and is particularly focused on global enterprise clients. Multi-country BPO HR/payroll is where NGA sees growth. Over the last year NGA experienced flat revenues, the downturn in the consulting was cited as the main reason; however, EBITDA was up by 8.6% to $157m. Workforce administration and global payroll were cited as areas which were experiencing growth. A “sweet-spot” client would be a client who wants its IT to be managed and requires service components for HR administration and/or payroll.

New wins and renewals for FY 2013 were cited as Aer Lingus (Irish HRO client based on ResourceLink), Textron (PeopleSoft renewal), Pirelli (40 countries in scope), State of Texas, McGraw-Hill and Orica.

FY 2014 priorities

• Evolve the client-centric coverage. This means to increase the reporting and visibility of customer satisfaction to drive this higher
• Drive the maturity of global delivery capabilities
• Evolve the transformation consulting services
• Invest and launch key IP platforms, including:
  – Global payroll
  – Service center tools & utilities
  – euHReka – Preceda – ResourceLink – Moorepay
• Increase traction of key partnerships:
  – Workday
  – SuccessFactors-SAP
  – Oracle.

NGA already has more than 8 clients utilizing the Workday platform.

NGA presented its Global Delivery Model, which demonstrates the maturity and scale of NGA’s global delivery, including approximately 1.2k employees in Manila, 1k in Kochi, 100 in Dalian, China, 150 in Katowice, Poland, 500 in Granada, Spain and 200 in Buenos Aires, Argentina. These centers have been undergoing a center standardization based on Six Sigma to improve alignment.

NGA’s depth of knowledge is evident in the 8 IP components presented, including its NGA Service Catalogue, Global Statutory Center, ePIM Implementation Methodology, SunEXo (to track payroll status), ScopeHR (to configure scope), Online Reference Guide (for processes and instructions), Global Standard Training and Global Process Framework.

Being an IP-led HR services company, NGA has to clearly articulate the value of the IP to the client and then ensure that the IP roadmap is closely following its client’s needs. Furthermore, increasing technology capability with a broader partner ecosystem could bring further challenges, such as:

• Finding the right technical solution for a client without confusing them; especially where they are simply asking for a service
• When the IP becomes less technology centric, NGA could lose some of the depth of knowledge that is already built into the IP.

NGA continues to be a company that is flexible to the needs of its clients. In this current climate companies need agility in HR solutions, services, prices and (now more than ever) technology. NGA offers a global delivery network that is experienced and always hungry for more business.

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Mercer on the Move

Linda Merritt, HRO Research Analyst, NelsonHall

This week I attended Mercer’s always well managed and informative analyst forum in Boston, MA. The meeting was focused on the talent consulting line of business.

Talent Management on the Rise

Mercer research indicates that human capital issues are a top CEO concern and managing talent is becoming a board of directors’ issue, moving beyond the traditional CEO succession planning and compensation to overall talent and workforce planning. The new Mercer Talent Barometer Survey, which was introduced at the 2013 World Economic Forum, reports that 60% of the 1,200 global companies surveyed are investing more in talent, but only 30% feel that their workforce plans are highly effective.

The business of talent has become both exciting and disruptive, with possible new entrants, globalization, media, innovations, and opportunities. (Talk about new entrants, eHarmony is considering getting into the talent matching game!)

With a possibility of double-digit growth, the talent group looked at how to grow across the talent value chain by expanding its services, tools and technology offerings for talent, rewards, and communications to increase growth and leverage Mercer’s depth of experience and capabilities.

The answer will become apparent over the next few months as more packaged solutions are launched that combine consulting, information, and technology to meet the needs of clients that want a less-customized consulting approach with “off-the-shelf” packaged and reusable services and tools.

Workforce Planning Versus HR Analytics

Some elements that will be leveraged are already mature and solid revenue producers. Surveys, benchmarks, and analytics for compensation/total rewards and job structures are a more than $200m line of business. Globalization of the revenues is already well on its way, with about equal distribution from North America, Europe, and emerging markets across 57 countries.

Instead of focusing on HR analytics, Mercer is emphasizing data acquisition and integration, data modeling, as well as data visualization as it applies to a wide range of workforce and data that drives business results. This may mean a consulting and outsourcing services engagement, it may mean workshops and training, or self-service use of integrated SaaS technology platforms with one or more Mercer products.

Think Big, Start Small, Move Fast

There are a lot of moving parts in Mercer’s strategy to create an integrated talent solutions portfolio.

It is brought together under the go-to-market Talent Impact label that includes new and existing products and services to forecast, engage, mobilize, reward and assess talent. Behind the scenes Mercer will be streamlining its own architecture into fewer and more integrated technology platforms to support the new offerings.

There is a lot to be done in a short time, but that is in alignment with the “think big, start small, and move fast” philosophy of Orlando Ashford, senior partner and president of Mercer’s talent business. Mercer is on the move!

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Spotlight on Infosys BPO and HRO: Growing, Growing, and Growing

Amy L. Gurchensky, HRO Research Analyst, NelsonHall

Since its inception 10 years ago, Infosys has experienced great growth and success. Its fiscal 2012 BPO revenues were $495m, more than tripling since the $147m it reported in 2007. To support its growing client list over this period, Infosys has nearly doubled its headcount to more than 21k employees and has added 16 international centers to the two centers it had in 2007.

 The company provides a balanced mix of horizontals from finance and accounting to sourcing and procurement to customer service, and of course HR.

In addition to its multi-process HR outsourcing (MPHRO) offering, Infosys’ standalone HR BPO offerings include:

• Payroll
• RPO
• Learning.

The company has a very strong HRO client base in North America, which accounts for 45%. The remainder of its HRO clients are fairly distributed between Asia Pacific (30%) and Europe (25%).

While Infosys’ HR technology offering is very strong, its HR BPO business has been steadily growing, and the company is aggressive with its target revenues for HRO over the next few years. With its planned growth initiatives, I believe it has a very good chance of meeting its targets due to its:

• High client retention rate
• Ability to expand existing contracts to grow with its clients
• Healthy pipeline with the possibility of a multi-process HR outsourcing (MPHRO) win in the near future.

My overall impression of Infosys at their recent analyst day was that they are genuinely nice warm people who really listen and are transparent. All qualities which I highly admire, and apparently qualities that are valued by two of its existing clients that came to speak during the analyst day:

• A North American headquartered banking and financial services company
• A U.S. headquartered media company.

Other reasons why these clients selected Infosys for BPO services included:

• Executive attention
• Trust to do the right thing
• A broad offering for future growth opportunities
• Flexibility
• Technology capabilities.

The lesson reinforced by these clients is that organizations are looking for service providers who listen and genuinely understand them so together, they can create a strong, lasting partnership where both companies prosper in their respective area of expertise.

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WorkForce Software Fits with HRO

Linda Merritt, HRO Research Analyst, NelsonHall

“Let’s elevate the discussion on workforce management.” That’s how Kevin Choksi, CEO of WorkForce Software, kicked off the company’s first analyst day. Workforce management, with time, attendance, and scheduling at its heart, is not the most exciting topic, even when it is designed on open systems, is fully configurable, addresses all employee types, and can be deployed globally. But when you have passion for your products, the heart can beat with the energy and excitement that keeps the three founders on board after 13 years and attracts top talent to take the company to the next level of growth.

The inflection point for the company was late 2010 when the SaaS version of the core product, EmpCenter, was introduced. New clients selecting the SaaS option quickly grew to 80% compared to the licensed on-premise or hosted system options. Revenue growth has also accelerated dramatically and Workforce Software has increased the average size of its clients, total users, and services in 30 countries.

The live demo showed how clients can use the flexible rules engine to self-define and update calculations for workforce policies, labor/union requirements, etc. The flexible Advanced Scheduler can create schedules based on a wide range of customer defined requirements and can even directly contact employees to fill in empty shift positions according to availability, skills, seniority rules, etc.  

Two additional modules, Absence Compliance Tracker and Fatigue Management, are available as standalone services or can be integrated with EmpCenter, adding to the differentiation of the workforce management up-and-comer that is in a market currently dominated by the much larger Kronos.

Absence Compliance Tracker supports leave intake, leave determination, and case management. The system provides a recommended leave determination and supporting rationale based on the employee’s eligibility; company policies; and for the U.S., the more than 300 state and federal leave laws and regulations, improving consistency of policy application and providing evidence of compliance.

Fatigue Management helps prevent scheduling fatigued employees, something that is already a requirement in industries such as nuclear power, transportation, oil and gas, pipelines, etc. It will also accommodate industry, labor/union, or company best practices, all of which can address compliance and safety needs.

Making money does cost money. The good news is that WorkForce Software has secured its first infusion of external capital to ensure it can keep up with growth and its development roadmap. Look for it to add staff, geographies, and service locations over the next couple of years as well as adding more BYOD (bring your own device) mobile access and enhanced services.

Expanding is always easier when you have friends, so the company is working to enlarge its partner network. Recent additions include SuccessFactors, Oracle Fusion, and Patersons. WorkForce Software would do well to increase its connections to the HRO vendor community too, as even major HRO vendors sometimes integrate or refer clients to best-of-breed preferred partners.

It was refreshing to spend time with a company not only succeeding, but accelerating in this economic environment. It made even my HRO analyst heart beat just a bit faster.

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How Mercer’s HCM Views Impact HRO

Would you build a $4.5bn facility in Africa if you were not sure you could find the skilled workers to run it? That was the comment of a real CFO at this year’s World Economic Forum in Davos. Human capital management (HCM) was one of the hottest topics at the forum drawing C-suite leaders into a full day of discussions. Concern about talent shortages has reached #2 on the risk management list, and top business leaders are recognizing talent as both a key competitive factor in growth and its lack as a risk factor limiting growth, especially in emerging markets.

This was the opening conversation at Mercer’s analyst forum focusing on its Talent, Rewards, and Communications (TRC) consulting practice and its approach to global talent growth. The TRC group is led by Pat Milligan, Senior Partner and President, and it accounts for $600m of Mercer’s $3.8bn 2011 revenues.

The forum was also about Mercer’s approach to its own growth. Mercer has increased its feet on the ground in emerging markets and is adding to its portfolio of services. Having completed seven acquisitions in the last sixteen months, including ORC Worldwide and CENSEO, expect to see more strategic acquisitions in the near future as Mercer leverages its cash on hand to build scale. Mercer’s TRC practice already has a great start with 55% of revenues from outside of the U.S. and 18% growth in 2011, 11% organic.

Mercer is focusing on more than consulting as a standalone service.  It is combining consulting with enabling technology and data to continue to win in its very competitive market space. Along with discussions on talent management, there were demonstrations of technologies and tool kits to gather, monitor, and manage information that helps clients make better people decisions, such as Mercer iknow and Human Capital Connect. 

Most clients cannot afford to immediately “rip and replace” their current tools and technologies, so Mercer will also help clients who say, “make what I have work.”  Its new Belong portal will be the front door to bringing together the information, tools, and applications – whether it’s Mercer’s own or a client’s blend of programs. Offering HR portals is not new, but Mercer is building in data extractors to offer the most needed information, dashboards, and limited functionality within the portal without having to go out to the full application.

There are other critical components to consider. This is where HRO comes in as part of the build and operations team to ensure cost-effective and viable end-to-end HR services for the participants, HR generalists and COEs, managers, senior leadership, and the enterprise itself.

Whether as a single source of consulting, solutions, and services or by using an ecosystem of preferred partners, is your HRO service provider(s) capable of helping you go from strategy to design, build, operate, and improve your HR capabilities and services to deliver full business value?

Linda Merritt, HRO Research Analyst, NelsonHall

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ADP: Analyst Day Priorities

Last week, ADP held its annual industry analyst day in NYC. Its priorities for the event included communicating its identity and progress as a global HCM company, its innovations in talent management, and its benefit services. Of course no ADP analyst day would be complete without product demos.

To begin the day, Carlos Rodriguez, CEO, spoke about the company’s vision to become the global HCM market leader. With workforces expanding globally, talent shortages, and the need to be more strategic, the international HCM opportunity is huge and ADP is determined to be at the center of it all. Given its large client footprint for its payroll and time and attendance solutions, integrating talent management functions including learning, compensation, and performance will be paramount for global domination in the HCM market.

Well-timed with the analyst event was ADP’s announcement that it launched an integrated end-to-end platform for talent management. In addition to talent acquisition, compensation and performance management, and succession, the talent management suite now leverages advanced learning management tools, learning content from Bersin and Associates, and an enterprise competency framework, and will be available for both its GlobalView and Vantage platforms.

ADP’s HCM toolbox is loaded and ready to be used. The GlobalView platform is available in 81 countries; the general availability date for Vantage has moved up to June; and WorkforceNow, which includes integrated HR, payroll, time and labor management, benefits, and talent management will soon support Canada. On the back-end, it would be great to see some HR BPO opportunities beyond payroll arise, and the company has been busy making enhancements to this portfolio as well.

In addition to its acquisition of the The RightThing, which brought in RPO capabilities, ADP has been quite busy building up its benefits business. There is great potential for benefits outsourcing due to changing regulations and complexities, not to mention the fact that an HCM market leader would not be complete without a strong benefits offering. Investments began with the Workscape acquisition, and continued with Asparity (for decision-support tools, analytics, and reporting) and SHPS (for reimbursement account administration and absence management). Finally, it added a Strategic Advisory Services offering to provide value-added analytics and advice to clients.

Amy L. Gurchensky, Research Analyst, HRO, NelsonHall

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A Double Dose of Kenexa

Last week, Kenexa announced Q3 revenues and held its annual analyst relations meeting. Revenues for Q3 2011 were $75.7m, up 59% year-over-year. Subscription services were up 38% to $55m, professional services increased by 102% to $22.2m, and RPO was up 26% at $20m.

The top 80 customers averaged $1.6m in annualized revenues, up $.4m over Q3 2010. Sixty new “preferred partner” clients were added during the quarter (each with over $50k in annual spend), up 50% Y-o-Y. Three large client deals closed in the quarter including Baker Hughes and a life sciences company, all of which Kenexa won against multi-vendor partnerships with its breadth of talent management services available from a single vendor, a differentiating factor.

In addition to increasing its revenues and client base, Kenexa is integrating aquisitions, setting up new partnerships, and doubling down on the pace of new service developments and introductions. The integration of Salary.com is ahead of plan and some of the largest compensation deals in Salary.com’s history were just signed. Its new alliance with SkillSoft provides an enriched option for learning as part of an end-to-end talent management solution, adding to its coverage of one more key talent management base.

The latest “2x” service, Kenexa’s 2x Perform, was launched for early adopters. It is an integrated, enterprise-level performance management, succession, and compensation planning system. The new SaaS service joins the likes of 2x Brass Ring, 2x Onboard, and 2x Mobile. In 2012, 2x Perform will be expanded to all markets and 2x Assess will add to the growing survey and assessment product line. The feature and function basics are also a development priority with enhancements to the user experience underway.

We also heard live from several clients and while each had very different recruiting and talent challenges, each saw the same strengths in Kenexa. The right technology and service bells and whistles are there, but as one client said, “the technology makes you productive, the relationship makes you successful.” And it was the relationship aspects that each client highlighted including a focus on client success from the executives to the account teams.  Part of Kenexa’s high revenue growth is coming from an increase in the number of services sold in new contracts and service additions by existing clients. How do you really know you have great customer satisfaction? When they trust you with a greater share of their wallet.

With good news on all fronts, the management team mood was expansive and the conversations wide-ranging at the analyst event. From the presence of four generations in the workforce and the shortage of talent when and where needed, to the global impact of the economic crisis in Greece, talent management ties in one-way or another to much of what we see happening around us. Expect to see Kenexa there, on the front lines, helping clients around the world create improved business results through the many elements of talent management.

Linda Merritt, Research Analyst, HRO, NelsonHall

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First Year+ Strong for ACS, a Xerox Company

With a year and a half passing since Xerox acquired ACS, Xerox has appropriately defined its new tagline: “Services-Led, Technology-Driven” with revenues roughly split equally between its Services segment and its Technology segment. Of Xerox Services, BPO is leading, accounting for 55% of revenues. The remainder of its Services revenue is ITO (12%) and DO (32%).

Within BPO, its four segments are HR, F&A, customer care, and transaction processing. Focusing on HR specifically, ACS is doing well according to information shared at yesterday’s Industry Analyst Meeting in NYC.  In total, the company has secured 44 HR services deals in the past 18 months.  Its first HRO deal since the acquisition was closed was a 5 year H&W services contract with P&G in March 2010.  

Some recent HRO highlights include signing a long-term TBO contract with a wireless telecommunications company, winning its largest ever learning services contract with a pharmaceutical company, and leveraging the ACS and Xerox relationship to win a multi-process HR outsourcing (MPHRO) contract from a competitor. 

Serving more than 11m employees and retirees worldwide, the company is focused on “consumer-driven solutions” or viewing the client employee as the end-consumer.  Part of this initiative includes its client collaboration group, FutureThink, which began piloting last year and has recently expanded. 

Its plans for geographic expansion are ripening.  The company has made great progress with its first target, Europe, with revenues increasing 10% and pipeline growth up more than 100%.  Approximately 90% of this pipeline improvement is the result of Xerox synergy.  Another positive is a recent MPHRO win from this region. 

Aside from Europe, ACS is targeting Latin America, specifically Brazil and Mexico, and Asia.  In Latin America, the company has a good market presence due to its acquisition of ExcellerateHRO last year. 

Additional acquisitions and partnerships can’t be ruled out either, especially for building out service capabilities.  Finally, to support all this growth, ACS has made investments in CRM, expanding its India and Malaysia centers.

Eighteen months since the acquisition has closed, Xerox has demonstrated a successful integration of ACS and signs are pointing to a positive future for HR services.

Amy L. Gurchensky, Research Analyst, HRO, NelsonHall

ManpowerGroup Solutions Analyst Day – It’s All About Talent – Part II

In my blog last week I wrote a bit about RPO and briefly about the broader content presented at ManpowerGroup Solutions Analyst Day June 8^th.  Now I’d like to take a broader view. A takeaway for me is there is no doubt in my mind that ManpowerGroup truly gets that there is a talent shortage globally, which is rapidly getting worse, and is actively helping its clients to attract and retain talent. Though unemployment rates may be high, there is a mismatch between availability of skills and demand for skills. Access to talent is going to be critical for companies to succeed! Estimates are that unemployment levels of skilled talent are 4-5% while unskilled talent is nearer the 20% range.

According to ManpowerGroup’s 2011 Talent Shortage Survey, 34% of employers are having difficulty filing vacancies. In the U.S. 52% of U.S. employers experience difficulty in filling mission critical positions. This is not just high-tech positions we are talking about but includes manufacturing, where an ever-increasing number of workers are retiring. It’s not just a U.S. problem, it is a global problem, including countries such as Japan, China and Australia, where 30,000 engineers are needed. As an example, to help solve the Australian problem, engineers in India are being looked at in addition to partnering with educational institutions to develop those skills.

At the end of the analyst event we were given a booklet written by ManpowerGroup, called “Entering The Human Age, Thought Leadership Insights”. In the introduction written by ManpowerGroup CEO Jeffrey Joerres, it states that “a new era is upon us, the Human Age, when optimizing human potential will be the single most important determinant of future business success and growth. From 2011, 10,000 baby-boomers will turn 65 every day for the next 19 years. To thrive and grow, companies and governments will need to engage and motivate older workers to remain in the workforce longer, and find a way to engage and train their youth, particularly by aligning training and education systems with the skills required by employers”. Sounds to me like an opportunity for learning providers to be ready to help! There is much more valuable information and insight to be had at http://www.manpowergroup.com/humanage/index.html

In sum a very worthwhile day and if you are an RPO provider, Learning BPO provider and/or anyone in the talent management business, you are in the right job to help your clients succeed in the new Human Age.

Gary Bragar, Lead HRO Analyst, NelsonHall