The CedarCrestone HR Systems Survey and HRO: Part 2

Linda Merritt, HRO Research Analyst, NelsonHall

To complete my review of CedarCrestone’s 2012-2013 HR Systems Survey, I will highlight some of the newer HT technology trends.

SaaS HRMS: The Breakthrough Trend of 2012

According to analysis of the survey results, the benefits of SaaS HRMS include:

• Faster time to value from deployments that take about half the time
• Improved user experience, which leads to higher usage rates
• Higher customer satisfaction.

The 50 top performers, based on financial measures, are leading the move towards SaaS HRMS solutions. Approximately one-third have a SaaS solution in place and more are planning to add SaaS in 2013.

Large market HR ERPs are still in the leadership position and face little near-term erosion from cloud-based HRMS. Near-term erosion, however, is the key phrase. Cloud-based SaaS HR platforms are disruptive technologies and as such, they are likely to quickly move up the value chain and eventually be able to serve larger and more complex organizations. In the meantime, SaaS HRMS adoption will move fastest among mid-market organizations.

Total cost analysis, not just system costs, will be important in the adoption of SaaS HRMS in larger organizations where ERPs are still less expensive on a per-user basis. Over time that pricing advantage will disappear, especially if evidence mounts for better performance and lower overall costs.

What’s Coming Next

• Social and mobile-enabled processes are increasing in user-adoption
  • RPO and recruiters are in the lead using social media as ~50% of all recruiters use social-enabled recruiting processes
  • Early adopters of social-enabled processes show a link to 8% higher revenue per employee
  • Almost 60% of respondents have some mobile enablement in their HRMS
• Integrated talent management is linked to the highest financial performance
• Organizations with business intelligence solutions that integrate workforce and other organizational data outperform by 12% over those without such integration.

Keep in mind however that the newer applications are starting from small adoption bases and have not yet reached breakthroughs.

Key Words: Integration and Standardization

Throughout the survey, the results are links to the need for integration of HR applications with the core HRMS to gain the greatest benefits, and the precursor to integration is standardization of policies, practices, and processes. For example:

Integrated talent management on the underlying HRMS platform attains the highest financial performance at the lowest cost and can lead to 50% lower BI costs.

HRO service providers can help clients with the initial standardization needed for creating an integrated HR technology platform, whether it will be ERP, SaaS, or a hybrid system. Buyers: have a clear plan and consider getting help in investing, deploying, and using the new tools strategically to create business results. It is harder than it looks!

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The CedarCrestone HR Systems Survey and HRO: Part 1

Linda Merritt, HRO Research Analyst, NelsonHall

Lexy Martin, CedarCrestone’s research and analytics vice president, debuted the 2012-2013 HR Systems Survey at the HR Technology Conference. I always enjoy pouring over this research, particularly now as it is in its 15^th year and is full of trends and insights into what is happening with HR technology. The findings are especially interesting this year as we see the emergence of newer technologies come into usage and high expectations for the future growth of HR SaaS HRMS, analytics, social, and mobile technologies.There is a lot of good news for HRO service providers and HR technology vendors. As we know, technology investments have seen some lean years recently. This year, the survey of 1,246 respondents from HR, IT, finance, operations, and executives indicates that 50% of large and medium-sized organizations will be increasing HR technology spend for 2013. Interestingly, the largest increase will be from organizations outside of the U.S. and Europe (59% to 44%).

The top HR technology initiatives for 2012-2013 include:

• Business process improvements and innovations
• Talent management processes and automation
• Service delivery improvements
• Business intelligence/workforce metrics.

While the greatest growth over the next three years is expected for workforce analytics/planning (142%), social media tools (81%), and service delivery (57%), it is important to remember that adoption of the more common technologies is not at 100%. HR administration is highest at 95%, but service delivery applications, which include employee and manager self-service is only at 49%. Check the full report for results by size and industry. For example, large enterprises have higher adoption rates, and industry varies with early adopters seen in high tech, financial services, and retail and late adopters seen in higher education and public administration.

Key Observations

• A shared services delivery model that includes an HR help desk application and self-service delivers the highest level of efficiency to enterprises and saves at least 15% in administration costs
• Basic workforce management technologies including time management self-service, absence management, labor scheduling, and labor budgeting can grow operating income faster
• An integrated HRMS and talent management solution can yield up to 33% higher revenue per employee.

The survey is not about HR outsourcing, but it sure applies. Between the HR technology initiatives, state of adoption of HR technologies, and evidence of results who better to help a client out than your friendly HR service provider!

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HR Tech Another Success: Part 2

Gary Bragar, HRO Research Director, NelsonHall

In my blog earlier this week, I wrote about highlights from the new Outsourcing Track at HR Tech as well as the RPO meetings I attended. In related news, my fourth global RPO market analysis report was published on Monday.

In addition to walking through the exhibit hall and attending technology demonstrations, my additional meetings at HR Tech included:

• Patersons: Its 2012 revenue growth is 70% YTD, driven by multi-country payroll. Safeguard World International has also reported similar success due to high growth for multi-country payroll services according to a business update two weeks ago.
• IBM: The company is experiencing increased demand for its RPO and learning services and many of its key learning clients have renewed in 2012. New learning contracts include one in South Africa and pipeline activity includes a large global bank. The Kenexa acquisition will bring in new RPO and talent management opportunities that IBM will enhance with its social and analytics capabilities.
• Hogan Assessments and SHL Assessments: Both companies provide personality assessments to predict work performance. SHL has also issued a talent management report with key findings showing that Eastern Europe ranks 1^st in supplying IT and essential business skills; the U.S. ranks 23^rd.
• Secova: The benefits administration provider offers online enrollment, a 24/7 call center, eligibility verification, billing management, and leave management services that are delivered from their ISO/IEC 27001:2005 certified platforms. Services are provided from California, New Jersey, and Chennai.
• Equifax Workforce Solutions: This was formerly operating as TALX, which rebranded as a result of its increased emphasis on the provision of workforce analytics and business intelligence to help clients improve their company’s performance.
• HireVue: Offers a Digital Interview Platform that saves time, travel, and costs by allowing clients to create online interview guides with scientifically proven questions. Candidates then record answers via a webcam, which recruiting and hiring managers then view on demand, including from smart phones, to build digital talent pools.
• JobVite: Provides a modular SaaS-based recruiting platform for applicant tracking, recruiter CRM, and sourcing talent.

Highlights from ADP include having ~30,000 clients for its cloud-based HCM platforms including:

• ADP Workforce Now: Launched in October 2009, it supports clients with 50 – 1,000 employees. The majority of its 20k+ clients purchase the broader HCM suite.
• ADP Vantage HCM:Piloted in October 2011 with general availability launched in June 2012, this platform, which targets employers with >1,000 employees, already has >30 clients. ADP has been adding ~5 – 6 new clients a month with a high percentage buying talent management, benefits (H&W), and time & attendance in addition to payroll. New wins include:
  • A national restaurant chain with ~24,000 employees
  • An employee healthcare staffing company with 15,000 employees
  • A retail chain with 4,500 employees.
• ADP GlobalView: It now includes ADP Talent Management globally and has won several major clients including an electronics manufacturer with 85,000 employees in 29 countries including the Americas, EMEA, and APAC, which recently added the compensation module.
• ADP Talent Management: It provides recruiting, performance, learning, compensation, and succession in 14 languages and 80 currencies for ~4,000 clients.
• ADP Mobile Solutions: Deployed globally and offered in 12 languages, the app has ~30,000 clients and ~450,000 users.

See you all next year at HR Tech in Las Vegas October 7 – 9, 2013.

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