Bridging Talent Management and Workforce Management with HRO

Linda Merritt, HRO Research Analyst, NelsonHall

One of the hottest topics in HR and HRO has been talent management (TM), including everything from recruiting and RPO to performance management and employee engagement. Major ERP vendors have snapped up TM software leaders to strengthen HR product lines, e.g., SAP and SuccessFactors; Oracle and Taleo. Very good moves and very on trend, but let’s not forget about the less flashy powerhouse: workforce management (WM).

TM and WM are both critical components of human capital management (HCM) and depending on definitions and models, there can be a lot of overlap. For my purpose here, TM is about the individual and the capabilities for a specific job position and WM is about groups of workers and managing multiple positions.

TM involves attracting, retaining, and developing people with the required capabilities according to requested volumes and performance management. WM involves workforce planning and forecasting the capabilities and volumes needed and day-to-day scheduling and time and attendance. It takes both processes to have the right number of people, with the right skills, in the right places, at the right time.

Let’s consider two more elements, HR analytics and ROI, that will also benefit from seamless HR systems and processes, which our dear HRO community can enable and deliver. Timely and accurate workforce data is a foundation block upon which HR is built. At least part of the drive for multi-country payroll has been to get better employee data, and there is an important feeder into payroll: time reporting. Today’s leading time and attendance systems offer great flexibility in capturing the detailed data needed for payroll plus analyses of productivity, labor costing, pricing, project billing, workforce planning, etc.

Everybody wants to tie HR and HRO to ROI. Lowering the cost of HR operations alone is not enough. We must show real impact in measurable business results. Simplifying a bit, TM supports improved business results through customer satisfaction and revenues generated; WM supports improved business results through optimizing SG&A via operations and reducing losses.

Many HRO offerings come in basic and advanced levels. HRO providers– ensure you offer both levels of time and attendance, scheduling, and attendance management services. Buyers – take the time to determine whether advanced workforce management services will not only provide better data, but will pay for itself through reductions in overtime and the impact of absences. Also, for many positions and industries, ensuring all customer-facing seats are filled at the right capacity, capability, and time has a direct link to productivity and revenues. Finally, don’t forget about compliance with wage, hour, and labor regulations where accurate records and proactive scheduling are a great defense against fines and losses.

HR and HRO in partnership can be the bridge to strengthen TM and WM across the entire human capital value chain.

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HRO and a Culture of Analytics: Part 2

Service level agreements (SLAs) are probably the most thought about key metric connected to outsourcing. Operational metrics that measure process performance are important. The practice of measurement can also be innovative and strategic.

Let’s stay with IBM as an example and move to the HRO services group, which serves almost 2m users in 99 countries with 29 languages.  I spoke to several IBM’ers including Kerry Violette and Janet Hunter.  Both are a part of IBM’s HRO efforts to enhance the employee experience, increase customer satisfaction, and use intelligence and innovation to enhance differentiated value aligned with IBM corporate goals and initiatives, including the Smarter Planet agenda.

One of IBM’s new programs underway to enhance the employee experience is the “Next Generation of Measures,” and several new HRO contact center metrics are being trialed.  When complete, the new metrics will be rolled out to all clients.  Better measures rely on better data. Cleaning up data and adding more fields takes a certain amount of client effort and IBM is working first with those clients who are ready to step up to a new level of contact center activity analysis.  In addition to the data tracking efforts, client employee users will be surveyed about the contact channels used and will assess the level of effort expended to reach resolution.

IBM HRO, led by Mary Sue Rogers, was an early leader in creating a client advisory group, which encourages feedback, input into prioritizing improvement investments, input about the creation of new service offers, and cross-client sharing and learning.  As clients will tell you, and the IBM HRO team knows, it is not uncommon to “see green, but feel blue” when using traditional SLAs.  And yet, understandably, contractual service metrics focus on the services and processes that are under the vendor’s control.  Another 2011 initiative, Beyond Sat 360, is designed to go beyond contractual obligations and cover processes end-to-end, including client and even third party components.  The program will also aid IBM’s assessment of current drivers of customer delight and retention.

Beyond Sat 360 is an outgrowth of both corporate initiatives and the client user group.  It will take a deep dive view of processes to identify opportunities to reduce nonproductive time and effort for both parties and identify the biggest bang for the buck improvements.  Current HRO clients may opt into the beta test and help develop the program and its deliverables.  Data collection and analysis, reports, and dashboards will be a big part of the program including client participation in diagnostic interviews and surveys.  IBM is partnering with Clear Picture/Organizational Metrics to support the research.

The assessment opportunity is free to participating beta clients. If successful, who knows, this could become a new service offering, as have other programs that started with the client advisory group.

How is your HRO vendor using measurement in innovative and strategic ways to improve their services, provide you more value, and deepen the client relationship?

Linda Merritt, Research Analyst, HRO, NelsonHall

An HRO Provider on the “100 Best Companies to Work For” List… Now That’s Walking the Talk

I was very pleased to see an HRO provider, Accenture, named on Fortune’s “100 Best Companies to Work For” list for the third year in a row.  Last week I wrote about customer service being important to customer retention, so I thought this was an appropriate blog to write about this week, particularly when you are a true believer in the adage that employee satisfaction = customer satisfaction = increased profitability.

Accenture was cited for initiatives including its “Future Leave” program, which is a three-month, self-funded, sabbatical with continued benefits and assurance to be able to return to work when the leave is over.  Accenture also has a number of other programs for employees including:

• Learning and development: A global online learning portal with 20,000 courses available.  All Accenture employees are assigned a career counselor to help them manage their careers
• Flexible work arrangements: Options of how and where employees perform their work to help achieve a better work-life balance

Another HRO provider walking the talk is Kenexa.  Its CEO, Rudy Karsan, recently co-authored a book titled “We: How to Increase Performance and Profits Through Full Engagement.” The book highlights three common factors that drive engagement that I completely agree with:

1. “Growth: We need to feel that we are advancing in our careers or are learning new things.
2. Recognition: We need to feel appreciated and believe that our ideas count.
3. Trust: We need to trust our senior leaders and feel confident about the future.”

More HRO providers are offering talent management services and can help clients improve employee engagement.  For example, Kenexa was recently awarded a contract by Unilever to survey 140,000 employees globally in 2010 and again in 2012 to assess employee engagement.  Kenexa will also help Unilever with action planning for any issues identified to improve employee engagement.

Manpower is another example of an HRO provider, helping companies in Asia to develop effective workforce strategies to improve their competitiveness.

As I’ve written before, as the economy improves and more jobs become available, it will be even harder to retain talent.  HRO providers can help and where needed, implement new employee programs or strengthen existing ones that are not achieving the desired results.  In assessing which HRO vendor to work with on tools and services designed to increase employee retention and engagement consider the vendor’s own human capital management practices. Who better to work with than an HRO partner that walks their own talk!

Gary Bragar, Lead HRO Analyst, NelsonHall

Customer Satisfaction is People Interaction – Back to HRO Basics Part I

What creates and sustains HRO client satisfaction?

The more services are automated, the more the remaining direct person-to-person interactions assume greater importance in shaping satisfaction. Granted, technology is very important in creating competitively priced HRO services, benefiting both the client and the service provider. And yet, meeting basic services levels does not create longer term satisfaction, and effective low-cost transactions are quickly considered simply part of the expected services. Competitive prices and compelling technology-driven quality services are necessary but not sufficient. Long-term end-customer satisfaction – whether the customer is internal or external – is sustained by people interacting with people.

For example, recent research by Convergys shows that 68 percent of customers still prefer to speak with a live service representative. And what they want most is knowledgeable CSRs who address their needs on first contact and treat them as valued customers. A strong second choice is live chat with an agent, followed by use of the corporate website. And acceptance of self-service options is also gaining in popularity, with 25 percent of consumers preferring to use the Internet to contact a company, up from 18 percent per a 2004 Convergys study. And as you would expect, the younger generations are more likely to actually prefer automated, self-service channels.

The relationship with the HRO service provider is critical in achieving and sustaining the depth of customer satisfaction that builds a loyal client, which in turn results in contract extensions of scale and scope, renewals and strong client references that help win new business. For HRO customer satisfaction is segmented into key client stakeholder groups including employees and other end users of the services, and key HR and business leaders including the outsourcing governance team.

Convergys’ president and CEO, David Dougherty said, “Being able to manage the customer experience depends heavily on being able to manage the employee experience. There is a clear link between satisfied, well-equipped and well-trained employees and the ability to provide a good customer experience.”

Watson Wyatt’s August 2009 survey of U.S.-based HR leaders found that more than half (52 percent) of employers are now more concerned about retaining top performers and critical-skill employees than they were before the economic downturn.

The survey showed that the top employee engagement activity (as cited by 83 percent of respondents) was increased communications. Much less cited were expanded use of recognition programs at 27 percent and special compensation programs for high performers and/or at-risk employees at 18 percent.

Watson Wyatt agrees that effectively using communication is critical to keeping employees engaged, but it advises that companies should also be using the HR programs they would normally use, such as employee recognition, development opportunities, and targeted compensation programs, to help employees remain focused and engaged throughout the downturn and recovery.

As the increased effectiveness of self-service transactions reduces the number of live agent interactions, each interaction assumes greater importance, as does the capabilities and attitude of the agents.

While the above-cited surveys were U.S.- and Canada-based, the economic downturn reduced voluntary turnover around the world. HRO provider employee contact centers are located around the world, onshore, nearshore and offshore, creating a global workforce that varies in language, culture and employee engagement needs. One prominent India-based BPO provider recently told me their turnover is now under 10 percent. Great news, but what happens when increased opportunity arises? 

Want to build customer satisfaction? Have a full internal program of employee development and engagement to ensure live customer interactions are handled by knowledgeable, caring agents enabled to solve as many problems as possible on first contact.

Linda Merritt, Research Director, HRO, NelsonHall