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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Catching Up with ADP

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

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

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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HRO and Innovation – a Changing Dynamic

Linda Merritt, HRO Research Analyst, NelsonHall

Last week the Human Resources Outsourcing Association’s (HROA) Publications & Practices Committee held a webinar on collaborative innovation in HRO with industry experts Lisa Johnson, director of recruiting, North America at Gate Gourmet, Rolf Kleiner, senior vice president and chief innovation officer at Kelly Services, Inc. and Dr. Greg McLaughlin, senior vice president of research & development for Global Targeting, Inc.

Understanding Innovation

Innovation has been a conundrum for years for HRO buyers and suppliers. There are many ways to define the word ‘innovation’ and that makes it hard to be sure each party is speaking the same language. All three experts agreed that open discussions between clients and service providers are needed to develop a mutual understanding of what innovation means in the context of the relationship and contract.

Greg walked us through aspects of innovation range from the conceptual “innovation is an experience”, to the practical “innovation begins with a need and ends with an outcome that creates a competitive advantage.”

Lisa looks for HRO suppliers with the spirit of innovation – backed by experience. Rolf looks for employees who “rise above the white noise” to work on special innovation projects that also support talent management.

Innovation and Continuous Improvement

The HROA Buyers Group’s survey on innovation and continuous improvement showed there is a commonality in basic definition and understanding developing across the community of buyers, service providers, and advisors. From the words of HRO community members:

• Continuous improvement is an enhancement of a product, service or process that already exists:
  • Increased operational efficiency, improved user experience, ongoing, incremental, and step changes
  • Efficiency and effectiveness gains that “keep pace with the market”
• Innovation is something new and different:
  • Cutting edge, transformational, precedent setting, competitive advantage, disruptive, and dramatic
  • A significant and often transformational change that, once introduced, “you wonder how you ever lived without it.”

The HRO community is in agreement that continuous improvement and innovation should be a collaborative effort between the HRO service provider and the client:

• 92% of respondents agree that this collaborative effort is what should be happening between service provider and client, but only 59% see that as true now, with 40% of buyers and only 22% of providers agreeing that collaboration is actually happening in the marketplace right now
• 77% agreed that innovation should be a collaborative effort among the parties, with agreement from 100% of advisors, 60% of HR practitioners, and 83% of providers.

 The Innovation Gaps

Significant gaps – and therefore opportunities – remain:

• 75% of respondents said that continuous improvement is in the HRO contract
• Only 42% agreed that innovation is included in the HRO contract.

In the next blog I will be getting practical about innovation in HRO.

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

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.

Transformational MPHRO is Thriving at IBM

I love covering MPHRO news! I still believe that broad-scope MPHRO has the greatest potential for long-term partnerships that create significant HR business impact and financial results for clients.

A summary of IBM HRO wins in the second half of 2011 shows that it is doing well in a still tough market for large-scale MPHRO while winning major MPHRO awards, including transformational deals.

Let’s start with the 13-year multitower award from Algar Group in Brazil that covers HR, F&A, and procurement supply chain management. The contract is valued at $100m and covers seven of Algar’s business segments and ~13,000 employees. While Algar Group covers a wide range of services: telecom, IT, agribusiness, and even tourism, it wants a standardized platform for back-office services with efficient processes, high quality, and lower costs. The HR portion includes call center, personnel management, benefits administration, payroll, training, and performance management.

There was also a unique long-term multitower award from Tanfeeth that covers HR, F&A, banking and other vertical back office, and client-facing BPO services. Tanfeeth is a fully owned subsidiary of Emirates NBD, the largest bank in UAE. IBM will provide managed services for the Tanfeeth shared services center, including BPO management and workflow services, predictive analytics, tools and training, and managing part of Tanfeeth’s delivery portfolio. The shared services center will also use IBM’s software applications to provide and manage the services and will support Emirates NBD’s 8,000 employees.

Tanfeeth will also provide services to other UAE organizations as the Gulf Cooperation Council’s first authorized multi-employer service center. This is a major strategic step for IBM in bringing larger-scale BPO to the Middle East. Tanfeeth has the needed local knowledge and long-term relationships, and IBM will bring its expertise in process, training, service delivery, and systems management.

As part of a planned transformational journey, there is a built-in attention for the employees of Tanfeeth and its clients covering change management, training and development, and even the opportunity for high-performance employees to participate in IBM’s worldwide leadership training program.

Then there is the competitive-bid MPHRO contract award from Air Canada for almost eight years and worth an estimated $76m. The deal is for full-scope MPHRO serving Air Canada’s 26,000 employees in North America and includes HR contact center, employee data management, employee travel support, payroll, benefits administration, leave management, recruiting services (with select support from manpower), and software application support for the HR systems used to provide the services.

Why is IBM continuing its MPHRO winning streak? According to Kevin Howlett, Air Canada’s senior vice president of employee relations, “IBM’s core strengths as a market leader in innovation played an important role in our decision-making process.” It also helped that the client felt IBM also had the strongest service offerings, a commitment to transformation, and the proven ability to ensure delivery performance and lower cost.

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.