Does HRO Stifle Innovation?

A question since the earliest days of HRO has been, what about innovation? We all want cake and want to eat it too, and that’s what buyers have always wanted: lower costs, improved performance, and innovation in HR business process management. Even when a deal was structured for the lowest cost pricing and standard SLA performance, clients soon asked “where’s the innovation?”

Knowing if a service provider is a market leader in HRO innovation is important to some clients, especially those companies that use innovation as a competitive advantage. Perhaps an equally important question is can an innovative company risk using HRO and will it help or hurt?

The Forbes List of The World’s Most Innovative Companies may help us determine if HRO providers can be innovative and if HRO is being used by innovative companies. The list is based on an “innovation premium” which is defined as “the premium the stock market gives a company because investors expect it to launch new offerings and enter new markets that will generate even bigger income streams.”

First, can HRO providers be innovative? Well, ADP (#87) is on the list of the top 100 that includes the likes of Apple, Google, Amazon, and Starbucks. Infosys (#15) is on the list and it also offers HRO services. Congratulations to both ADP and Infosys!

Next, can innovative companies risk using HRO? Yes, they can and they do. Here are some of the top 100 companies on the list known to use HRO and their vendor partners. Notable is IBM HRO with at least three clients on the list: P&G, Kraft, and Avon Products. IBM HRO focuses on large market HRO and clearly can be a valued partner in HR transformation with leading innovators.  Other partnerships include Unilever with Accenture; KAO with ADP; Kellogg and PepsiCo with Aon Hewitt; and Agilent with NorthgateArinso. RPO providers are also represented with the triple threat of The RightThing providing RPO support for Amazon, Campbell Soup, and Praxair. I am sure there are many more connections to HRO among the top 100. Congratulations to all, let’s have a piece of cake in their honor!

According to the newly published “The Innovator’s DNA,” the 3P framework for innovation is people, processes, and philosophies that foster innovation as everyone’s job and there are key leadership skills and behaviors than can be developed to weave innovation DNA into the company. Of course HRO, even at its most innovative, cannot make a client an innovator. That must come from within. HRO can support each element of the framework for innovation and become an enabling partner to clients that are innovative or those that are striving to be.

Do you have an innovation premium? Is your HRO service provider capable of enhancing your journey of innovation?

Linda Merritt, Research Analyst, HRO, NelsonHall

HR Needs to Get into the Social Media Major Leagues

As summer winds down and we watch to see if the “green shoots” here and there will establish a root system strong enough to provide a harvest of substance and sustenance for a recovery, my thoughts floated over the horizon to the future of HR.

Someone in my social network sent me a link to an interesting presentation on YouTube, Is Social Media a Fad?  The series of interesting tidbits gathered from various sources show we are way beyond fad and into a fundamental shift in the way we communicate. For example:

Years to reach 50 million users: Radio (38 years); TV (13 years); Internet (four years), iPod (three years). Facebook added 100 million users in less than nine months. iPhone applications hit one billion in nine months.

While some of the information presented in the YouTube video may be a bit exaggerated or unconfirmed, the trend is undeniable. The world of communications around us is moving ever faster, much like Moore’s Law. And it is having an impact. Just last week the Obama administration launched “Reality Check,” a section on the White House website that features videos by White House officials who address rumors and concerns about the health initiatives. President Obama gave a boost to BlogTalkRadio when he used the online venue to continue refuting the allegations spread by both traditional and social networking media.

Looking at social media in the context of HR, the impact on recruiting is already apparent. What recruiter – whether in-house or external third-party – isn’t using LinkedIn to scan profiles for passive candidates? But are your recruiters effectively using social media to promote your employment brand and candidate selection processes, to make the candidate experience worth “talking” about whether or not they are hired this time? What ideas are being implemented by your recruiting service provider to leverage the social media phenomenon to your best competitive advantage?

Taking it one step further, the prevalence of social media means it cannot end after the recruiting and onboarding processes. There must be a nexus between employee engagement, knowledge management, development and mentoring. And it must be leveraged to support an aligned culture, increased productivity and innovation.

I found information for this blog in seconds via Google, RSS feeds, Wikipedia, online news sites and my tags on Delicious. Can your employees find just-in-time internal information just as quickly? If they can’t easily find the appropriate subject matter experts for answers to their questions, today’s new employees will turn to their own network.

Other points to consider: Are policies needed around posting personal business-related opinions on internal and external social media websites? May employees recommend individuals from suppliers? What role should, and is, HR ready to play?

The reality is internal HR folks and third-party HRO service providers must quickly develop plans and enhance their skills to fully and effectively leverage social media to become major leaguers. What do you think the role of HR should be in using social media? Send us an email, post on the NelsonHall HRO Insight Group on LinkedIn or respond to this blog.

Like the HRO Insight blog? Please let us know. And pass on the good word to your Twitter network, update your Facebook wall for your business friends, Digg it, MIXX it, or help others StumbleUpon it!

Linda Merritt, Research Director, HRO, NelsonHall