In Times of Crisis, HRO Is Caring and Concerned: Part 2

Linda Merritt, HRO Research Analyst, NelsonHall

Some think caring emergency response may be compromised by HRO, but response capabilities can be better with HRO. Major vendors have multiple service centers and back-up capabilities at levels above what is economically feasible for most organizations. Also, customer care and concern abounds when HRO vendors maintain an internal culture that values and recognizes customer service.

Care and Concern

Experienced HR people make up much of the client-facing service representative staff at HRO vendors of every sort and HR people are wonderfully caring folks, whether they are on your payroll or a service provider.

• Being There: As mentioned in Part 1, Mercer was prepared in case they took a direct hit from Superstorm Sandy in the Boston area. When needed, Mercer will put up available service personnel in nearby hotels. Even though some folks were personally impacted, 75% of the staff showed up on Monday and 90% showed up on Tuesday.
• The Spirit of Service is Global: Jodi Hayes-Roth, North American Service Delivery and Operations Leader at NorthgateArinso (NGA), said their representatives feel very loyal and connected to their clients and make every effort to be present even though there are back-up centers available. The spirit of service is as strong in client service centers like Manila as it in the U.S. or Europe.

Practice What You Preach

To have staff remain dedicated to their clients, they need to be treated with the same care and concern. Both NGA and Xerox have client service centers in the Philippines where typhoons and monsoon flooding can impact business services and personal lives. A great business continuity plan (BCP) addresses both issues.

• Outreach: When the NGA Manila office was impacted by flooding, there was outreach to contact and ensure every employee was safe and accounted for and the team raised funds to help co-workers in need.
• Safe Shelter: Michael Sigmund, General Manager of Operations at Xerox, recounted what happened when a monsoon hit the Xerox Manila service center that supports many of Ford’s global employees. The building is built with hurricane-standard materials and a generator back-up system and there are sleeping quarters to provide safe shelter for staff and their families. While work can be shifted to the partner center in Michigan, Xerox invested in keeping local employees safe and the employees wanted to support their customers. Even though short staffed, they kept tier 1 services operating while some tier 2 work was transferred. In return the team was recognized at a Ford leadership meeting.

There are many more stories out there of people working anywhere they could find Wi-Fi, getting to work without transportation, and carefully monitoring transfers to protect service levels even in the midst of a declared multi-state disaster.

Recognition of people that demonstrate a high sense of ownership is important.  Aon Hewitt, Mercer, NGA, and Xerox all shared great examples from formal to informal and local to enterprise-wide recognition that they provide. 

Stay tuned next week for more on HRO business continuity planning.

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by clicking here.

IBM Accentuates its RPO and Talent Management Offering by Acquiring Kenexa

Gary Bragar, HRO Research Director, NelsonHall

Although a bit smaller than the $1.9bn Oracle paid for Taleo (coincidentally at $46 per share as well) and the $3.4bn SAP paid for SuccessFactors, I believe that IBM’s acquisition of Kenexa, a cash transaction at $46 per share or ~$1.3bn and closing in Q4 2012, will have a much more immediate and larger impact than the aforementioned acquisitions.

Both Taleo and SuccessFactors were specifically acquired for their talent management (TM) technology. Beyond the strength of Kenexa’s technology, however, is the provision of TM services including:

• Consulting
• RPO
• Employee engagement
• Leadership development.

According to an IBM study conducted earlier this year, 71% of respondents cited “human capital” as the leading source of sustained economic value, above products and services innovation and significantly higher than technology. Kenexa, as a HCM and TM provider, will compliment IBM’s TM offering, which focuses on the full TM life cycle of attracting, developing, rewarding, and retaining talent. Specifically, IBM’s TM offering includes:

• Recruiting
• Learning
• Performance management
• Compensation
• Succession management.

In addition to its multi-process HRO (MPHRO) offering, which includes TM, IBM also specializes in providing workforce strategy transformation, social technology, and analytics to predict and measure performance.

While RPO is part of IBM’s MPHRO offering, it also provides RPO on a standalone basis to GM. Kenexa’s RPO capabilities, however, will accelerate IBM’s RPO market share, making it one of the largest RPO providers globally with clients headquartered in North America, Europe, and Asia Pacific. Kenexa also delivers RPO services in Latin America including South America in ~25% of its contracts.

Kenexa’s BrassRing technology is one of the two most widely used applicant tracking systems in RPO contracts. Kenexa also brings its Kenexa 2x Recruit platform, which in addition to recruiting and learning contains the following performance management modules:

• Goal setting
• Competencies
• Performance appraisals
• Compensation
• Career development and pathing
• Succession planning.

NelsonHall estimates that Kenexa has more than tripled the size of its RPO business since 2006 with brand name clients including Ford and multi-regional contracts with Baker Hughes and Eli Lilly.

IBM’s price of $46 per share is a 42% premium over Kenexa’s August 24^th close, but it will be well worth it. IBM is getting much more than software technology; it is getting assets, including human talent that can make a HCM difference. IBM’s plan is to combine its approach to social business, analytics, and TM to transform business processes to create smarter workforces with measureable business results. Given Kenexa’s record of growth and IBM’s experience with integrating acquisitions, this sounds like a good plan and a great business opportunity for both companies.

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by clicking here.