Archive for the ‘Human Capital Management’ category

Catching Up with ADP

June 20, 2013
Linda Merritt, HRO Research Analyst, NelsonHall

Linda Merritt, HRO Research Analyst, NelsonHall

The recent passing of long-term U.S. Senator Frank Lautenberg reminds us of his early role in the formation of what became ADP, a founding member of HR outsourcing. In the early 1950s he was engaged in selling insurance and sold a policy to two young New Jersey businessmen, Henry and Joseph Taub. The Taub’s were pioneering a then new concept; payroll outsourcing. The brothers knew payroll processing and Lautenberg knew sales and marketing. Lautenberg took a risk and joined the Taub brothers and together they created a new industry.

Establish Operating Principles

By the time the company incorporated in 1961 the three leaders established principles that still guide the company some 60 years later. Following are a few of the principles they put in place.

Focus on Business Markets that Offer Significant Growth Opportunities

ADP has always pursued growth through new market opportunities, both by expanding it service lines and by entering new geographies. Much of the early growth was through acquisitions, as well as organic growth. Lautenberg retired as CEO from ADP in 1982 having made over 100 acquisitions!

Over time, ADP became a global player. An early acquisition was GSI, a large payroll and HR services company in Europe. The latest 2013 acquisition is Payroll S.A. to expand LATAM payroll capabilities to Chile, Argentina, and Peru. In the last few years major acquisitions included Workscape (benefits), The RightThing (RPO) and SHPS (benefits).

Embrace Technological Change to Enhance Product and Service Offerings

By the early 1960s ADP had moved from manual operations to the pre-computer punch cards and on to leasing its first computer: an IBM 1401 mainframe. That willingness to continue to embrace the new is seen in ADP’s successful launch of a series of cloud-based SaaS HR technology and BPO service platforms, including Workforce Now (1k-20K employees), Vantage HCM (50-3k employees), and GlobalView for multi-nationals. Together, the three services support more than 40k clients.

The company has also launched extensive mobility options, including RUN powered by ADP for small business mobile payroll and ADP Mobile Solutions for access to a broad range of information and transactions spanning time and attendance to benefits and pay cards.

Attract and Retain Motivated and Talented People

ADP has grown into a $10bn global outsourcing business with one of only four remaining AAA credit ratings in the U.S. With ~570k clients across 125 countries, we know customers support its line-up of services and proprietary developed technologies. What about people? A few recent awards tell the story:

  • Ranked second on Fortune’s 2012 list of America’s Most Admired Companies in Financial Data Service
  • Ranked in the Top 50 on IDG’s Computerworld 2012 list of the 100 Best Places to Work in Information Technology (IT)
  • Named to the 2012 Working Mother 100 Best Companies, for the third time.

We therefore need to ask the question of prospective purchasers: does your prospective or current HRO service provider have long-term guiding principles and can you see evidence of them in action? Because ADP does.

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Mercer on the Move

June 14, 2013
Linda Merritt, HRO Research Analyst, NelsonHall

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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Pinstripe’s RPO Analyst Day: Talent Forward

May 21, 2013
Gary Bragar, HRO Research Director, NelsonHall

Gary Bragar, HRO Research Director, NelsonHall

I attended Pinstripe’s analyst day on May 15, 2013. It was combined with its Client Talent Forward Summit, with the theme “Commitment to Innovation”. Highlights of the day included:

Client Panel

Pinstripe discussed 10 recent innovations, of which a panel of four Pinstripe clients then discussed a few Pinstripe innovations that have benefitted their business, including:

  • Email campaigning: A proactive approach to creating candidate pools with active and passive candidates. This enables messaging a high number of candidates with relevant information – such as familiarizing candidates with potential hiring company announcements; e.g. “Did you happen to know we were named one of the best places to work 4 years in a row” or “We were rated as the safest operating room to work in St. Louis”. Email Campaigning has resulted in a two-to-three times increase in passive candidate responses
  • Video interviewing: Both live and prerecorded interviews of candidate presentations. Managers feel more informed of when to take candidates to the next step. Team interviewing is also conducted
  • Employment branding and social recruiting: All about making a connection with the candidate to “get them in the door”. Includes training and education on how to properly use social media to send out positive messages.

Client Tour

We toured the Brookfield facility where ~60% of employees work. The tour included:

  • Understanding how employees are recognized
  • How virtual employees are connected and communicated with as though they were onsite in Brookfield
  • Demos of some of the innovations, including email campaigns to build talent pipelines
  • A visit to the Impression Center.

The Impression Center, which receives 250k calls per year, is staffed by customer service experts who are imperative to potential candidates’ first impression of the company. Applicants and candidates can call the center with questions throughout the job offer, and live chat is also offered. First call resolution is 96% with 97% customer satisfaction. Over 63k interviews have been scheduled by the Impression Center. Candidates may still contact the recruiter if needed; however, by using the Impression Center there has been a 97% reduction of calls to recruiters, allowing them to focus on their primary concern – recruiting.

Pinstripe Analyst Briefing

Pinstripe has grown from ~450 employees and ~73,000 hires in 2011 to ~575 employees today and nearly 100,000 hires in 2012. Most recruitment contracts at Pinstripe are end-to-end, full service RPO as opposed to projects. Several of the more recent contracts have been second- and third-generation RPO clients. Pinstripe’s partnership with Ochre House, formed in 2009 to deliver RPO in EMEA and Asia-Pacific, has been awarded several contracts to fill multi-regional hiring needs. Both companies attribute their success to sharing similar values. Honeywell is an example of a second-generation client now expanding beyond North America to Europe that Ochre House will serve. Combined with Ochre House, RPO is provided to ~85 clients in 45 countries in 23 languages.

Summary

One of the key messages taken from this summit is that Pinstripe is keenly focused on the candidate experience and a positive work environment for its employees to excel at satisfying client needs. It is therefore of no surprise that Pinstripe recruiters have an average of >9 years’ experience.

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How Mercer’s HCM Views Impact HRO

June 11, 2012

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’s Meeting of the Minds, not just an Ordinary Event

March 19, 2012

I attended ADP’s Meeting of the Minds (ADP MOTM) that happened last week March 11 to 14 in Dallas. This was my first time attending, and I didn’t quite know what to expect until I arrived—well, how about ~900 enthusiastic ADP clients. This is an annual event of which ~30% of attendees were first timers.

Sure, there were a few ADP presentations and demonstrations on ADP’s latest products and services, but many of the sessions were not conducted by ADP and were instead facilitated by HR practitioners and clients. Professional development would be a good way to summarize it. As they say, everything is bigger in Texas—how about ~170 sessions that you could attend to learn about everything from Healthcare Reform to Payroll taxes, to RPO, to best practices across a number of services, and functions including shared services, recruiting, change management, etc. There were also hands-on training sessions, of which I attended Learning, part of ADP’s Talent Management.

I could write my entire blog talking about the keynote speaker, Emmitt Smith, and the fun social events, but I’ll shift gears to talk about HRO to keep with our blog focus.

To begin, it’s important to share ADP’s three priorities, as stated by CEO Carlos Rodriguez, that are important to advance ADP as a:

  • Technical leader
  • Service leader
  • Global leader.

Regina Lee, president of ADP’s national and major accounts, GlobalView, and ADP Canada, spoke about four key areas of investments that were made by ADP:

  • Integrated Human Capital Management: including Vantage HCM and Workforce Now
  • Talent Management: including the integration of performance management, succession planning, and learning. ADP’s talent management platform has over 100 clients
  • Benefits Administration and Healthcare Management: having acquired Workscape in 2010 to strengthen ADP’s benefits administration capability, in addition to Workscape’s talent management and compensation capability. On March 8, ADP announced it has entered into an agreement to acquire SHPS Human Resource Solutions (rationale is below)
  • HR BPO, including the acquitisition of The RightThing in October 2011 (further details below).

I’ll finish my blog focusing on Benefits Administration and RPO.

The Workscape acquisition has proven to be a success, with ADP adding ~100 additional benefits clients annually. SHPS will further strengthen ADP’s benefits administration offering with capabilities including:

  • Eligibility and enrollment
  • Spending accounts administration
  • COBRA administration
  • Absence management
  • Benefits advocacy.

SHPS will strengthen ADP’s leave administration and reimbursement account administration capabilities, including HSAs and HRAs, which have become increasingly important as more employers offer high deductible benefits plans to their employees. You can read about this in my recent blog.

The RightThing – coming off its best year in 2011 – was ranked by NelsonHall in its 2011 RPO report as the top U.S. RPO provider in terms of North American revenue, bringing in ~80 clients. Prior to the acquisition, ADP provided recruitment administration and technology, but it is now a full end-to-end RPO services provider. Expect an RPO contract announcement soon and much more to come as RPO will continue to be provided as a standalone service and now also in combination with ADP’s multi-process HRO services.

Gary Bragar, HRO Research Director, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

Does HRO Help or Hurt in Achieving Human Capital Leadership?

February 24, 2012

Can employers be recognized as leadership development advocates and a great place to work and still take advantage of HRO services? Yes—and recent “best companies” announcements provide plenty of examples.

Fortune’s annual 100 Best Companies to Work For list includes a number of companies known to use HRO services. RPO examples include: American Express (Hays RPO), Edward Jones and Intuit (Manpower Group), Microsoft and Novartis (Alexander Mann Solutions), and SAS and Telefonica (Ochre House). Accenture, which provides HRO services, is on the list as an employer.

HRO clients are also among the recognized companies in the 2011 Top Companies for Leaders, another recent Fortune study in association with Aon Hewitt. PepsiCo (Aon Hewitt) and Unilever (Accenture, IBM) are among the multinationals taking the lead in developing leaders. Again we see RPO as a common talent management service selection; Eli Lily and Novartis AG (The Right Thing, An ADP Company), GE and Siemens AG (KellyOCG), and Whirlpool (Kenexa). IBM, another major HRO player, is recognized, as is Wipro. Accenture is noted on the U.S. list and Infosys is on the Asia Pacific list. ADP is included in the 2012 list of 10 Best  Companies for Leaders rankings by the Chief Executive.

Business Today has just released its 11th annual “Best Companies to Work for” in India and top companies include HRO providers such as Accenture, IBM, Infosys, Wipro, and TCS. Honeywell International (SourceRight Solutions) also made the list and is on the U.S. list for Leaders as well.

The lists go on and on and you will find companies that use HRO as well as HRO providers among the best of the best. You can be a pioneer in leadership development and use HRO in critical talent management areas. You can achieve greatness in any region of the world. You can even look to some of the HRO providers to share their own expertise as a “best company” in the human capital leadership arena.

Will HRO automatically make you the best company? No. However, HRO will not slow you down and may even provide a committed partner in accelerating your success.

Linda Merritt, Research Analyst, HRO, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

HRO 2012 Trends – The Evolution of Talent Management

January 12, 2012

The NelsonHall HRO team is pleased to once again contribute the annual HRO Today thought leaders forecast of trends that will influence the year ahead. ‘Artful Predictions’ covers a range of topics with talent management (TM) as one of the highlighted trends. We have covered the subject of talent management frequently as we see the opportunity for it to become an integral part of HR business process outsourcing.

For some time, I have called talent management a disputed ground and a potentially disruptive force that could shake up the HRO field. Why? This is because TM elements include so much of the human capital management value chain and cross over everything—from HR ERPs, software modules, HRO business process outsourcing, HR consulting and the roles of HR leaders, HR business partners, and internal shared service centers. TM includes performance management, succession and career planning, recruiting and staffing, compensation, and learning. I also include workforce planning and management under the TM umbrella.

In addition to the HR ERP vendors and the specialty TM software providers, there are HRO providers that are also building out their TM capability internally as well as through strategic partnerships and acquisitions.

  • Kenexa acquired BHI (Batrus Hollweg) a TM company. Although Kenexa has developed TM expertise internally, the company has also been enhancing its efforts over the past few years through prior acquisitions that have included:
    • Salary.com to strengthen its compensation management capability
    • The Centre for High Performance Development to further strengthen its leadership development and management training offering
    • Gantz Wiley Research to increase its employee survey research capabilities.
  • Mercer acquired Censeo Corporation to enhance its TM consulting capabilities and online platform of assessment services.
  • Both Kenexa and NGA are partnering with SkillSoft for learning content.
  • In July, Talent2 re-branded itself to simplify its talent management focus.
    • It also became a reseller of Cornerstone OnDemand, most widely used for its performance management, including succession planning and learning modules.
    • Talent2 also added advisory services as a service offering to help clients more effectively deploy the capabilities.

With recruiting as one of the core TM processes, RPO vendors are among the early leaders in developing internal as well as external TM service options. NorthgateArinso has been moving in this area as well, coming from the standpoint of bring it all together into one integrated system and services package. With the acquisition of The Right Thing, ADP signals both a stronger move into RPO and its interest in TM.

The HRO Today article also discusses whether HRO has reached the maturity stage of providing ‘true business value’. I believe that talent management evolving into a full-fledged HRO service with technology-enabled tools, data integration across the full suite of HR data, supported by analytics assistance and consulting is critical to HRO providing true business value results for clients and achieving its own full measure of success as an invaluable industry.

Linda Merritt, Research Analyst, HRO, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.