HRO (and overall BPO) Total Contract Values up in Q1 – Q3 2010

During NelsonHall’s recent quarterly BPO Index Call, our CEO John Willmott stated overall BPO contract values were up for all BPO sectors, including HRO, both on a rolling twelve-month basis from 2009 – 2010 as compared to 2008 – 2009, and up year-to-date Q1 – Q3 2010 as compared to Q1 – Q3 2009. This is all good news, but not a surprise given that we are beginning to see some recovery from the recession.

Looking specifically at HRO, total contract value (which includes the value of the full term contract plus any renewals) in Q1 – Q3 2010 was up nine percent. The growth came primarily from North America, while Europe declined as it is coming out of the recession a bit slower and clients in that region continue to be more cautious about outsourcing their HR processes. Although its total contract values isn’t as large as in North America, contracts are still being awarded in Europe, e.g., wins in Q3 by Logica, Midland HR, HR Access, Raet and CPH Consulting, as recently cited by my colleague Linda.

HRO growth in Q3 2010 was particularly led by RPO, similar to numerous other points during these tumultuous times. But here, I’d like to take a quick look at why the learning services market is starting to recover (please see Linda’s October 5 blog entitled, “Recapping the Not-so-Dog-Days of HRO’s 2010 Summer” to see a few of the recent learning contract awards.)

In learning, providers are introducing new training offerings largely focused on certified training courses, primarily technical areas including IT. Training is coming back to life, and the initial emphasis is on strengthening direct job-related skills. Making sure IT professionals can keep up with professional certifications can also be a way to build engagement and head off turnover as the employment market improves. There was also some introduction of new leadership development courses, perhaps indicating a return to a focus on the future by investing in management skills development. Finally, social learning is continuing to make inroads, and Expertus introduced its new platform, ExpertusONE, which facilitates communities of practice, expert networks and mentoring, in addition to normal learning system functions. Other new learning offerings introduced in Q3 included those from Raytheon Professional Services, QA and Edvantage Group.

It will be interesting to see, at the end of Q4, which HRO processes, regions and industries are the leaders and laggards. But much, much more to cover before then, including my “Targeting Learning BPO Market Analysis” to be published later this month.

Gary Bragar, Lead HRO Analyst, NelsonHall

Recapping the Not-so-Dog-Days of HRO’s 2010 Summer

One of the biggest HRO stories of 2010 will be the flurry of big and small acquisitions in the benefits administration space. The three big acquisitions – ACS and ExcellerateHRO, ADP and Workscape, and Aon and Hewitt – have recently closed.

As acquisition mania played out, many HRO deals were getting done, and this week, as the weather has finally, thankfully, started to cool, I’m taking a look at some of the deal activity over the long hot summer.

There were not a lot of announced deals in benefits administration, but a Hewitt summary indicates plenty of activity was still quietly going on. Hewitt won new awards across the span of benefits administration in the large and mid-market, including several in defined benefits and defined contributions. But the greatest activity was in health and welfare, and for point solutions like dependant audits and flex spend accounts.

While not necessarily matching North America in total contract value, the U.K. and Europe were also quite active in HRO. Logica was awarded a £10m payroll and pensions HRO contract extention by U.K’s Metropolitan Police, with new scope this time around including increases in employee and manager self services and electronic pay slips. And Midland HR won a deal for its iTrent HR platform including HR administration, employee and manager self-service, payroll, talent management and workforce planning.

In RPO, CPH won a contract with Opal Telephone, and Alexander Mann was awarded  a contract for recruitment and contingent labor by Cobhan. On the continent, HRO activity included HR administration and payroll deals by Reat and HR Access in the mid-market.

ADP parlayed existing payroll services for KAO, a Japan-based consumer products manafacturer, into extended HR administration and payroll services across Asia Pacific including China, Hong Kong, Indonesia, Malaysia, Philippines, Singapore, Taiwan, Thailand, Vietnam and Japan. In addition, ADP won a global managed payroll services contract with BT that will cover more than 40 countries in North America, Europe and Asia Pacific when fully implemented.

It was refreshing to see a spate of learning contract awards won by Expertus, General Physics, Intrepid and The Learning Associates. However, as most of the learning outsourcing activity was in the public sector, we still need to see more of an uptick in the private sector before we can say learning is fully on the road to recovery.

RPO maintained its lead position as the most active single service area, with the greatest increase in revenues and new contracts. RPO activity was highest in the U.S., followed by the U.K., and was spread nicely across providers including Alexander Mann, CPH, Kelly Services, Manpower, PeopleScout and SourceRight. Several of the awards were for contingent labor or combined RPO, with the contingent labor focuses indicating that employers are still cautious about a full return to permanent hires.

There were no announcements of the HRO mega-deals of yore, but it was very nice to see the increased activity levels across many HRO service lines and service providers. Now that the cooler weather of fall is here, we’ll  hopefully see an even more serious return to getting business done before the end of the year!

Linda Merritt, Research Director, HRO, NelsonHall

Learning 2.0 Portals – From Buzz to Abundant Value to Increasing Innovation

In blogs earlier this year, I wrote about “The Buzz About Learning 2.0 Portals” and “The Abundant Value of Learning 2.0 Portals.” We’re now seeing providers building increasingly innovative components and capabilities into their learning portals, which can exponentially increase their value and usage.

For example, just yesterday Expertus announced it was recently awarded a virtual instructor-led training (ILT) contract by a large global software provider. Expertus will develop a virtual ILT program to train the client’s sales force on new products, and to educate technical sales architects. Delivered over the ExpertusOne social learning platform, components of the program include hosted live events around the world, live chat with international subject matter experts, hands-on labs, virtual classrooms, online proctors and technical support. And the client’s anticipated cost savings – through elimination of worldwide travel and events expenses – is up to $5 million. While these types of portals of course require a financial investment, such potential hefty cost savings provide justification.

Other examples:

• OCLC, a nonprofit, membership-based computer library service and research organization needed to bring together library staff and organizations around the world, and provide a venue that would allow them to engage in discussions, participate in groups, share content and engage in collaborative learning development. The solution it selected was Plateau’s Talent Gateway platform, which integrates social tools, content management, Plateau learning management, customer management and virtual meeting spaces. It’s enabling OCLC members to connect with colleagues across the library community using social tools, create custom content, join in conversations, create ad-hoc communities and learn relevant skills.

• Liberty Mutual is using Cornerstone OnDemand’s Cornerstone Connect to facilitate informal learning as part of the company’s front line management training program. Participants take part in an in-person, weeklong program, supported by supplemental online courses via Cornerstone’s learning management system. Using Cornerstone Connect, Liberty Mutual’s team has created a management community to maximize and extend the benefits of the training program. Components of the Cornerstone Connect platform include rich user profiles, status updates, live feed views, communities of practice, discussion boards, blogs, wikis, podcasts, rating and sharing of content, knowledge management, tag clouds and RSS feeds.

One of the common, and critical, capabilities across all these platforms – as well as those already offered or under development by other providers – is engagement. In an isolated e-learning environment, it’s all too easy for the mind to wander (“Did I remember to send that memo?” “Hum, I wonder if there’s any cake in the break room?”) and equally challenging to feel a sense of connection (“Is anyone else unclear about that point the instructor just made?” “Who can I ask, other than my boss?”) Social media capabilities such as discussion boards and live chats with peers and subject matter experts can significantly enhance engagement in, and the resulting value of, e-learning.

Expect to see an increase in uptake of Learning 2.0 portals that enable engagement via social media capabilities. The rapid deployment, learning enhancement and cost savings value prop is über compelling.

Gary Bragar, Lead HRO Analyst, NelsonHall

The Abundant Value Proposition of Learning 2.0 Portals

In my February 11 blog on “The Buzz about Learning 2.0 Portals,” I referenced research conducted by Expertus and Training Industry, Inc. which found that within the next two years, 45 percent of survey respondents plan to upgrade their existing learning portal and 14 percent plan to launch a new learning portal. And based on the results of a Learning BPO research study I recently launched, this comes as no surprise as the value of learning portals is becoming increasingly clear.

Learning 2.0 portals have a lot of functionality and can deliver significant benefits to the end-user company and its employees. Here is just a sampling of what I found to be noteworthy capabilities per a recent demo of Expertus’ customizable, web-based, social learning platform:

• The ability to consolidate learning information from what may be multiple legacy systems into one portal to view:

«   All mandatory company training programs along with due dates, a brief description and time required, and a click-of-a-button launch of a selected training program

«   Recommended learning and ratings by peers who have already taken programs. Imagine the value of this, for example, to a salesperson who has to quickly learn about a new product for an upcoming meeting with a prospect

«   The latest blog on topics related to specific interest areas or job functions

•  The ability to obtain insights from and ask questions of peers via a chat feature within the portal

•  The ability to access subject matter experts 24 x 7 – via the portal – for assistance when new learning programs are launched and a question arises. Imagine…no more needing to determine who to email or call and then waiting for a response, or getting caught in an IVR menu jungle

•  The ability to link training to talent management and create career paths and development plans, etc.

Need tangible proof of the value of learning 2.0 portals? One Expertus client achieved in four months a 388 percent increase in course registration volume, a 178 percent increase in new courses offered, and an increase of 123 percent for new learner registrations.

Of course there are many learning 2.0 portal providers in today’s marketplace, including Norway-based Edvantage Group which just yesterday announced a contract to provide a learning portal for MOT. MOT is an educational organization working with young people in Norway and South Africa to improve school environments via social learning methods such as peer-to-peer communication, exercises, stories, role playing and dialogues with other young people. 

A word of advice here to buyers. If/when you decide to implement a learning 2.0 portal, don’t pick a provider based solely on its technology offering, as technology is only as good as it is used. You’ll want a provider that can teach you how to or manage for you: 1) putting all the different learning environments, curricula and social networking functionality into the portal; 2) ensuring that content is continually updated; and 3) communicating the value of the portal throughout the enterprise, and conducting virtual learning demonstrations on how to use and best leverage the portal.

You’ll also want to make decisions on other portal-based aspects such as whether you want to provide all employees with unlimited access to learning or add in certain restrictions, whether all courses will be free or some will be fee-based, etc. A savvy learning provider can guide you through these types of decisions and build them into the system for you, as required.

Have you implemented a learning 2.0 portal? If so, I’d very much like to hear comments on your experiences, what worked well, what didn’t, what challenges you encountered, how the portal has been received by your employee base, the value you’ve achieved to date, etc.

Gary Bragar, Lead HRO Analyst, NelsonHall

Kindergarten, HRO and Learning for the 21st Century Workforce

“All I Really Need to Know I Learned in Kindergarten.” Ah…if only it were as simple for the 21^st century workforce as the title of Robert Fulghum’s book! Opportunities for learning the skills necessary to excel in one’s selected career have become more challenging in the past several decades – think of the skyrocketing costs of a university education! – and since the beginning of the recession, employers have significantly cut back on their training programs.

This is why I was very pleased to see just this week three HRO service providers’ announcements on what they are doing today to help both clients and the public at large to improve their learning skills. A quick look at these three examples:

First, Manpower sponsored the “Skills for the 21^st Century” knowledge track at the Ashoka Future Forum. According to the announcement, the track was “designed to harness the intellectual power of thought leaders across all sectors to create a common vision for how to prepare U.S. talent throughout the education system, and how to build a culture of lifelong learning among adult workers that ensure the U.S. workforce is able to adapt as rapidly as the global economy is changing.” And during a session entitled, “Putting Adults on the Path of Being Changemakers,” Manpower gave a demonstration of MyPath, its free online career development and social network.

Second, Expertus expanded its collection of free learning webinars. Intended primarily for corporate training professionals, the company has just added three new webinars: “Numbers Don’t Lie – 4 Truths of Learning Measurement Success”; “9 Ways to Trim Operational Expenses to Fund Strategic Learning”; and “Secrets of Successful Learning Systems.”  The gratis webinars are available as recordings and come with presentation slides.

Third, RWD established the Vanguard Leadership Forum, a “center of innovation that provides access to thought leadership around improving the way people work.” The Forum, available free of charge to RWD clients, will focus on topics including Leadership and Team Development; The Performing Organization; Performance-based Analysis and Design; Knowledge, Content and Learning Management; eLearning and Mobile Learning; Simulation and Gaming; Workplace and Social Learning; and Learning Technologies and Tools.

Why was I so encouraged by these announcements? The technology we utilize in our jobs, the way we operate and the skill sets required to perform our jobs are dramatically different than they were 30 years ago, 15 years ago, five years ago, even one year ago, and they will undoubtedly continue to change. Thus, helping foster an environment of continuous learning is imperative for:

•  Current employees and candidates looking for jobs to continually learn new skill sets, including career development and how to leverage social networks

•  Employers, as they need to know how to implement better ways to learn, with better technology and to do so cost effectively. Further, to maintain competitive advantage, employers must adopt a culture of continuous learning

By looking at just these three examples, it appears the tide is turning to a renewed acknowledgement of the importance of continuous learning and improvement of employee skill sets. Yes, we all learned not to run with scissors and not to drink finger paints when we were in kindergarten. But, wise employers create a learning culture, and wise employees seek out learning opportunities that will launch them into and keep them in the top quartile.

Gary Bragar, Lead HRO Analyst, NelsonHall