HRO Get Ready for the Human Age

ManpowerGroup reported its 3Q 2011 earnings last week, a bit more on that later. First, I want to highlight a “big idea” approach to talent management that the company has launched. Speaking at the 2011 World Economic Forum in Davos, Switzerland, Jeffery Joerres, ManpowerGroup Chairman and CEO, announced that we are on the cusp of “Entering the Human Age.” According to Joerres, in the Human Age, talent is the key differentiator for business success and technology becomes the great leveler, allowing skilled individuals to vault the restrictions of national borders, and increasingly, of when and where they work.

Many of the elements ManpowerGroup addresses are already known in the world of HR and HRO. The impact of the technology-enabled globalization of talent, the need to simultaneously deal with an aging workforce while engaging a mobile new generation, and the growing mismatch in available labor versus skilled talent. All of these lead to the need for a new strategy and approach to attracting, developing, and retaining talent.

The future of talent envisioned in the Human Age is both hopeful and daunting as we are only entering the transition period with a long road ahead. It is a future in which employers would benefit from a consulting/outsourcing partner with the scale and scope of ManpowerGroup, with $22bn in revenues and a presence in 80 countries.

I love big ideas that come from HRO service providers showing that HRO can be more than transaction, technology, and contact center cost and efficiency management. Big ideas can also lift and differentiate a company’s brand.

One of the keys to brand management is consistency and constancy of messaging. IBM is doing a very good job of taking a big idea phrase, i.e., smarter planet, connecting it to its brand, and naturally to its consulting and services. Going one step further, IBM makes the concept a central theme running throughout its strategic initiatives. For example, the HRO team had to show how its investment initiatives supported one or more of the six imperatives for a smarter planet.

ManpowerGroup is making a good start. The speech in Davos was backed by a special ManpowerGroup website for more information on the Human Age, including a 58 page booklet outlining the concept and providing research and experienced insight on changes that will be integral to the new age. Other 2011 white papers from ManpowerGroup are picking up the phrase and it was also used in its 3Q 2011 earnings report. Further use across the external website, news releases and other collateral, as well as internal use will strengthen the connection to ManpowerGroup.

For 3Q 2011 ManpowerGroup reported revenues of $5.8bn, up 16% overall and 9% in constant currency. EPS were $.97, up 43.5% from $.62 in the prior year quarter.

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 Tips You Can Use

1.  Buyers, U.S. healthcare reform will continue — be prepared.

At the Mercer client conference last week, it was very helpful to hear its view of the precarious future of the U.S. healthcare reform. The healthcare reform act is being challenged in court in whole and in part and the outcome is uncertain. In the meantime, dates for further implementation are rolling near. Mercer posits that the act is unlikely to be repealed in total, but some amendments will likely be changed. Some are concerned large employers will dump employees into state healthcare exchanges and pay the relatively small penalties. Terms in the act make that unlikely as subsidies decline as income rises and are eliminated totally at $100,000. Also, larger employers need to compete in the war for talent and providing healthcare benefits will keep them in the game. The advice for smaller employers may be different and hybrid employee segment coverage models may develop.

2.  Misaligned expectations and poor implementation can still kill a HRO deal.

At lunch, a buyer told the sad tale of a failed initial outsourcing experience. By now, you know the too often told tale: misaligned expectations, a botched implementation, and an adversarial governance relationship that was not healed in time to save the deal. In retrospect, the benefits manager can see that they were 49% at fault, which includes failing to appoint a full-time implementation project manager or addressing the internal change management issues that come with first time outsourcing. The client is now with Mercer, providing a happy ending that was earned the costly way.

3.  Have a social media curator.

Brand management has changed permantly; any illusions of controlling your own brand are being shredded by social media and the same will be true of employment brand management. Can your HRO vendor manage its own brand socially and can they help you manage yours?

4.  An issue of passion can turn into a global wellness campaign and change lives.

Launching a wellness campaign to reduce healthcare costs and indirectly increase productivity is a worthy business objective. Levi Strauss, very early on, addressed HIV education out of deep concern for its employees and found it needed to first break through misinformation and fear. Now there is a new generation that will get the same education. Value-based passion, along with a great wellness program will be sustained for the long-term, helping employees and their families as well as generating savings.

5.   Vendors, invite industry analysts to your client conference.

Hearing the presentations and thinking about how they inform in ways that showcase the strengths of the service provider (perhaps stimulating further inquiries), speaking informally to clients, and looking for the consistency and continuity in what was said to industry analysts and now to clients. It all helps build a 3-D view into the vendor’s world.

Are you ready for your HRO 3-D close-up?

Linda Merritt, Research Director, HRO, NelsonHall