Posted tagged ‘Accenture’

Global Growth Requires Global Mobility and Global HRO

June 1, 2011

No country is an island, even if some are surrounded by water. Each country, its employers and workforces are part of a globally intertwined macro economy and an employer in any one country can be competing for sales and talent with competitors from around the world.

Global growth requires developing global workforces to: increase a middle class of consumers; develop in-country sales, service, and/or production employees; and take advantage of right-shoring labor pools. Employers also need to access skilled talent in short supply in-country and yet importing talent can find an employer caught up in the turmoil of political as well as logistical issues.

The EU can be especially difficult to navigate. According to a new Accenture study issued at the European Business Summit 2011, “Europe in Tomorrow’s World,” one issue Europe needs to address to get back on track for future growth is the graying of the workforce and how to both develop and access more skilled labor.

As reported by Worldwide ERC, many EU countries are already wading in the waters of culture and immigration and are either considering or taking action to improve opportunities to augment local workforces:

  • Sweden reduced its “Experts Tax” by 25% to attract more highly skilled expats, especially in the areas of science, research, and engineering;
  • Austria opened its doors to workers from the eight Eastern European EU countries to bring in both highly-skilled and lower-skilled workers for industries such as construction and food service because of its aging population;
  • Denmark’s major businesses called for relaxed immigration policies because six of the country’s ten largest businesses say they need to attract foreign employees within the next three years, and most businesses believe that current immigration policy is preventing them from hiring the foreign employees they need.

There are many ways for HRO service providers to assist in globalizing workforces including:

  • RPO: Top-tier RPO providers continue to expand coverage into more and more countries.  RPO vendors can also help navigate the work visa process in-country.
  • Mobility: Expat assignments are a key tool to developing global leaders, one that must be carefully managed due to cost and complexity. Who better to assist than a workforce mobility expert?
  • HR systems and payroll: Managing a multi-country workforce requires timely and accurate data and that is hard to come by without access to a top-notch employee data and reporting system. Services and systems are available from HRO payroll and multi-process HRO providers.
  • Consulting: Before acting, a global workforce strategy and polices are needed to guide expansion. A HRO provider with an industry leading reputation in HR consulting can provide you with a one stop resource for transformation planning, implementation, and change management as well as operations.

Whether your company is a major MNC entering into new markets or a mid-sized company expanding into just one additional country, a resource skilled in the dynamics, logistics, and legalities of global workforce growth can be invaluable — check out your friendly HRO global community.

Linda Merritt, Research Director, HRO, NelsonHall

Employee Engagement, High Performance, and HRO

April 13, 2011

Employee engagement is down to the lowest levels seen in many years. Low engagement makes it hard to be high performing and can later raise turnover as employment opportunities improve.

  • In early 2010, The Conference Board found that only 45% of employees were satisfied with their job, the lowest rate seen in the 22 years of the survey.
  • This year, the 2011 Aon Hewitt Trends in Global Employee Engagement survey found that 56% of employees are engaged on average, down from 60% in the prior year, the largest year-over-year drop seen in 15 years. Declines were seen across Asia-Pacific, Europe, and North America, with only Latin America showing improvement.

My colleague, Gary Bragar, has consistently brought attention to the engagement topic because it is important and makes a difference for all: employers, employees, and HRO service providers. It can also make quite a difference! Aon Hewitt’s research indicates there is a strong correlation between employee engagement and financial performance. Organizations with high levels of engagement (65% or more) outperformed the total stock market index and had shareholder returns 22% higher than average in 2010. Companies with low engagement (45% or less) had shareholder returns 28% lower than the average.

Naturally, employee engagement that contributes to high performance business results is first and foremost a critical issue for C-level and management teams and there is a myriad of advice available, including consulting services from many of the HRO providers. Every organization, industry, and market has a life cycle and the management challenges will vary depending upon the stage. Accenture’s new book, “Jumping the S-Curve,” identifies three s-curves and outlines the critical issues for each cycle, including the importance of transitioning from one stage to another.

I see within the very insightful Accenture management advice opportunities for HRO contributions. For example, to climb the cycle of business success based on a winning idea, you need to reach a threshold of capabilities and competence and to attract and keep top talent in critical areas to maximize growth without collapse. As the cycle of achieving business success begins to end, new talent problems can arise as turnover increases due to fewer advancement opportunities and talent poaching. As a new cycle starts, a change may be needed in leadership and business competencies at the executive and other levels. Talent needs to be continually monitored, nurtured, and refreshed – all appropriate to the current and next cycle of the enterprise and what is happening in the broader market and economy.

Layering talent management services (e.g., recruiting, staffing, performance management, succession and career planning, and workforce planning) on top of a capable HR system for employee data management that’s supported by HR analytics can go a long way in helping clients see where they are now, identify gaps and emerging issues, and use HRO services and support to achieve a truly high performance-based business transformation.

Linda Merritt, Research Director, HRO, NelsonHall

Differentiating HRO – Use What You Know

February 16, 2011

How many ways can a HRO vendor differentiate?  The lowest total cost, the latest and greatest in technology, the broadest range of services in the most places, etc.?  When there are multiple reputable service providers, vendors have to reach further to create HRO differentiation.

In the early days of HRO, it was sufficient for a vendor to provide services that were as good as what had been provided in-house, becoming the base of most service levels (SLAs).  HRO vendors quickly found that meeting SLAs did not equate to overall client satisfaction, with clients stating that while they may have been getting what they contracted for, they were not getting what they wanted or needed.

Today, “as good as” is not good enough.  HRO service providers need to know more than the client in each service area.  Knowing more may be in the form of compliance and reporting expertise, local knowledge of covered geographies, advanced application use, or even change management expertise.  Client confidence that the selected vendor does indeed “know how” is important.  Confidence that the vendor will be a partner in what happens next is even rarer and is a key differentiator that top tier HR clients seek.

Times of uncertainty create opportunity to build client confidence with your ability to see around corners or at least keep up with the twists and turns.  Consulting capabilities are particularly important in HR.  But, even top consulting capabilities will not build the HRO practice if there is no flow-through of learning and innovation as well as improved process and performance.

Many HRO service providers with roots in consulting offer forward-looking research, publications, webinars, and even conferences to help clients keep up with best practices, new trends, and regulatory happenings, all while demonstrating thought leadership and subject matter expertise.  Many names come easily to mind including Accenture, ADP, Aon Hewitt, Ceridian, IBM, and Mercer.

For example, Towers Watson has published human capital research and recently released its latest HR services report.  Kenexa’s client conferences also offer sessions of broader related HR practitioner interest.  Finally, Infosys provides a good example of application expertise and consultative relationship management when it brings tailored ideas to clients on how they can improve their processes.

Vendors that offer multiple service lines or are an industry leader in a particular area can cross data streams.  Think of ADP’s weekly report on employment or Administaff who has PEO trends that show which U.S. regions are leading and lagging in returning to growth for the small business market.  Also, ACS, a Xerox Company and IBM support client interaction opportunities that can lead to innovation communities.

How can data from IT, F&A, or even Ceridian’s Pulse of Commerce Index be tapped for HRO?  Think about how you can go beyond the obvious and use everything in your kit bag to develop leverageable and differentiating HR and HRO insights.

Linda Merritt, Research Director, HRO, NelsonHall

Is HRO at the Table – the Investment Table?

February 10, 2011

IT spend on consulting and infrastructure increased in the fourth quarter of 2010, especially in North America and Asia Pacific.  There were even bright spots in Europe like France and Italy.  Accenture saw its strongest quarter in consulting in 2 ½ years and IBM had its strongest quarter of the last decade.  Increases in outsourcing tend to follow.  For example, at Xerox, now including ACS, BPO was up 11.1%.

The bad news is that major HRO investments often trail at the end of the outsourcing pack.  The good news is that HR and its HRO vendors can see trends coming and prepare to present the strongest business case possible for investment.

ADP was up 7% to $1,663m for Employer Services.  Its bright spot was beyond payroll services, which were up 16% and include benefits administration, MPHRO, and various point solutions.  One-time activities, or smaller add-on services, helped hold up results throughout the recession for many HRO vendors as they were smaller, less risky, and easier to fund investments, but it is hard to have significant growth through small increases in incremental spend.

Aon Hewitt’s Q4 2010 numbers were way up with revenues of $1,151m, an increase of 229%.  Stripping away the impact of the merger, organically HRO was $580m, down 2%.  The same was true at Towers Watson.  For FY Q2 2011, it came in at $791m, but in a pro forma comparison it was down 5%.  Towers Watson completed a lot of integration work in the past year and managed operating margins well at 18.7% for the quarter, but underperformed organic growth expectations.  All of the HRO service providers caught up in last years acquisition frenzy need to ensure they do not miss the current and coming window of opportunity for major HRO decisions and investments.

The business development profile for every HRO client, or hot prospect that wants to do business with you should include the timing and approval process for business case decisions.  Also know what can be done through operating expenses and local discretion.  Even the most solid HRO solution will run into trouble if the funding window is missed and all that is left are the scraps on the table.

Even with investment dollars starting to fly, pie-in-the-sky projects will still be grounded.  I really liked a term I heard in relation to an increase in consumer spend, frugal splurges.  Pragmatic investments that are well supported with facts and figures and direct ties to key business initiatives and business results will have the edge.  Don’t forget to add just a little bite of pizzazz!  Add-on modules, basic features and functions, workflow and service center capabilities are important, but a bit boring.  How will new major HRO investments be riding the tech wave of virtualization, cloud, and mobility – adding to the capabilities of an adaptable workforce of the future, ready to compete, and win today?

Linda Merritt, Research Director, HRO, NelsonHall

Make Merry Across the Land of HRO

December 22, 2010

It is a time of major holidays for many of us around the world, and we in the HR outsourcing community should take time to make merry together in celebration, even as we prepare for a brighter New Year.

Yes, the recovery has been slow, but it is happening, and improved results are spreading good cheer across the land of HRO. Look at Accenture’s results for 1Q 2011 to see what is possible and happening right now for even the big players. Revenues for the quarter were up by 12 percent to $6.6 billion, with $2.5 billion coming from outsourcing, which was up 10 percent. And for the last quarter reported, both ADP and Mercer were up a healthy six percent in revenues. Each is showing it can add more volume without losing the effect of cost reduction initiatives made during the downturn.

The upturn in RPO has been dramatic, and there is plenty to stimulate the continued need to manage hiring in new and improved ways –and not just for managing turnover, but also for growth. A well integrated RPO platform of services with the people skills of real recruiters, sophisticated technology and robust back-office processing is a great way for buyers to access today’s needed staffing capabilities without bearing the full cost of investment, and still keeping costs variable with volumes. Wrap up a nice RPO present and put a bow on it!

The new business mix is changing, and Accenture is starting to see both consulting and service deals aimed at growth and new market entry. The merry point for savvy and prepared HRO vendors? This should be a lead-in to more demand for HRO beyond and in addition to cost control and operational efficiency. Bust out more than single point solutions – shine up and get ready those bundles of service for expansions in talent and workforce management.

Holidays are a time of gathering, and I have been impressed with the progress that HRO service providers have made in listening to their clients. ACS, a Xerox company, and IBM have been pioneers in gathering together customers, listening to them and letting them talk to one another, both physically and virtually. Aon Hewitt makes more the merrier, having just spent a full day with its HR BPO Client Council; and it also has councils for benefits and human capital leadership for CHROs from around the world.

My hope for the New Year is that HRO clients and service providers put the proof in the pudding to show that a strong HRO partnership is a viable and valuable path to strategic HR that improves business results for the enterprise, and in turn builds career opportunities and better lives for people around the world.

My colleague Gary and I are planning to take next week off from blogging (although we may sneak one in.) So I’d now like to thank our clients and our blog readers, and wish all merry holidays and a Happy and prosperous New Year.

Linda Merritt, Research Director, HRO, NelsonHall

Is Your HRO Brand Aligned with Your Communications?

December 16, 2010

For HRO providers, brand positioning is important in gaining new clients. It is also important in building and reinforcing client loyalty. One element in brand reinforcement is consistently aligned communications. Beyond the interface points of service management, service delivery and executive relationship management, you must remember the HR practitioners, as HR folks can be one of the hardest groups to win over as an outsourcer.

In past blogs I touched on the importance of thought leadership through research and webinars. Today, my focus is on an old standby – the newsletter. Newsletters that fit within an overall communications strategy can be a good vehicle to reach the broader HR client community.

Examples of good ones produced by a variety of providers include: Ceridian Connections, a monthly e-newsletter, Aon Hewitt’s Hewitt Edge, In Focus and Emerging Trends (which cover topics ranging from benefits to retirement to workforce issues), and ADP’s quarterly ADP Advisor and a number of specialty newsletters with a top topic (as one would expect) being payroll tax issues.

How do you make your newsletter worthwhile for the e-age, and one more outstanding touch point for brand reinforcement?

  • Talk about what you know and your clients care about.  Ensure audience interests are aligned with provider sources of service impacting knowledge development.
  • Say it with style.  Have a clear purpose and voice suited for the e-world and desired audience.
  • Make it count. Be relevant, concise and authoritative on a few subjects per newsletter. Insight is more important than quantity – showcase your quotable subject matter experts.
  • Do not pitch. But do offer topical news that happens to now and then align with new services.
  • Make it fun and interactive when subject matter allows. Perhaps have a home page for the newsletter(s) with short instant answer polls, quizzes and links to HR-specific content.
  • Link it. Newsletters should lead readers into a deep relationship with you  – every click through is a reinforcement. Naturally, link to Twitter, Facebook, LinkedIn, your corporate site, sponsored research, partner sites and well known (and HRO neutral) sources of topical subject matter.
  • Time it. Consider frequency of publication in light of the newsletter’s purpose, audience and available resources. We are awash in communications, so you must make yours a welcome arrival.
  • Track it! For example, as a part of a year-end wrap-up, Ceridian lists its most accessed articles. Know which topics are a hit, not only to cover more in the future, but to pass along internally as areas of broad client interest.

Larger service providers like IBM and Accenture have a great variety of professional publications and major studies. (IBM’s Global CHRO Study, Working Beyond Borders, surveyed more than 700 CHROs worldwide!) That may not be the best path for all, but your voice and connection with clients is just as important. A newsletter focused on tools and tactics for getting more out of your services can be just as valuable as one that explores the future of human capital management.

Know a good example of a HRO service provider newsletter? Please share!

Linda Merritt, HRO Research Analyst, NelsonHall