Posted tagged ‘HCL’

Success Factors for the Market Segments of MPHRO

August 9, 2011

Last week, I discussed the four market segments of multi-process HR outsourcing (MPHRO) as defined in my 2011 NelsonHall MPHRO report: multi-country standardization, client-specific shared service transformation, core business focus, and technology-led HR service enhancement.  This week, I’ll examine success factors for service providers within each segment.

In the “multi-country standardization segment,” which is the segment with the highest growth rate for the next five years, it is critical for vendors to be able to support a client’s operations across a wide range of countries including emerging markets. Providers must also be able to rollout standardized HR administration and payroll to create a global system of record. Examples of service providers operating in this segment include ADP, HP, and NorthgateArinso.

To be successful in the “client-specific shared service transformation segment,” the largest of the four, vendors must provide HRO support directly or through a partner for all HR service lines (i.e., payroll, benefits, learning, RPO, and workforce development services) and have a high degree of multi-shore delivery capabilities to support clients in various locations.  Equally important is a service provider’s ability to be able to work with the client’s existing HR technology.  One of the biggest challenges faced by vendors in this group is getting clients to transition more than just back-office functions to its offshore service centers to reduce operating costs.  Service providers operating in this segment include those that have been long-term players in the MPHRO market such as Accenture; IBM; Aon Hewitt; ACS, a Xerox Company; and U.K.-based Capita.

Within the “core business focus” market segment, success is contingent on a provider’s ability to quickly deploy HR services and be accessible when expertise is required.  In terms of HRO offerings, standardized HR administration and payroll are a must and providing support for talent management services is very appealing.  The biggest challenge for vendors operating here is all the competition that exists from some of the following vendors: Genpact, TCS, Talent2, Infosys, HCL, Wipro, and Caliber Point.

Success in the final segment, “technology-led HR service enhancement,” requires vendors to provide their own standard technology for HR administration and payroll that includes talent management functions.  Also, it’s important that this technology be rolled-out relatively quickly.  Providers that fall within this segment mirror the multi-country standardization segment, but also include vendors such as Ceridian.

There’s lots of room in the MPHRO market for all types of buyers, so it’s critical for service providers to decide which segments are of strategic value and to define their sweet spots in their MPHRO portfolios and fill in capability gaps where contracts can be lost to competitors.

Amy Gurchensky, Research Analyst, HRO, NelsonHall

Employee Engagement: Outsourcing Providers Get It

March 3, 2011

I finally listened to my first two Bill Kutik radio shows and I’m glad I did (replays are available online).  Two weeks ago, Bill interviewed Mary Sue Rogers, General Manager of Global HR, Learning and Recruiting for IBM, who shared her perspectives on HRO.

More recently, Bill interviewed Rudy Karsan, CEO of Kenexa, for his views on balancing work and life and the nature of how jobs are changing with insights from his recently co-authored book titled “We: How to Increase Performance and Profits through Full Engagement.”  Research findings cited from global employee surveys and company case studies revealed three essential elements that keep employees engaged and productive: pay, purpose and passion.  During the interview with Bill, Rudy noted a January 2010 study which indicated that 45% of employees were disengaged.  That figure is now a staggering 84% (Ouch!).  Just think of the productivity that would occur if companies could make that 84% engaged.

To measure employee engagement, Rudy states that companies must first measure employee engagement though employee surveys.  Once those results are compiled and analyzed, conversations on how to improve need to occur with employees.  Having managed employee programs including employee satisfaction for a global telecom for a few years in my prior life, I can attest to all the amazing things that happen when employees become engaged!

Another important element in employee engagement is to analyze employee actions and anticipate trends before they become major problems.  In her discussion with Bill, Mary Sue emphasized the wealth of workforce information that is already inherent in HR data warehouses and systems.  An experienced HRO vendor can help connect the systems, provide the HR analytic tools, and even assist in building an engaged employee base, which is critical for success in an ever-changing global business environment.

An example of another HRO provider walking the talk is HCL.  Vice Chairman and CEO Vineet Nayar penned his management philosophy in his 2010 book titled “Employees First, Customers Second,” which says it all.

So, why aren’t more companies actively trying to ascertain employee satisfaction?  I could write my own mini novel on all of the excuses organizations give, but rather I’ll simply say just do it.  If you have the resources and the commitment, employee engagement can be managed internally.  But, if you don’t have the bandwidth, talent management providers such as Kenexa and OchreHouse have the capability to help.  In either case, companies must be committed to the process, from senior leaders down to first line supervisors.  If you don’t have the commitment to doing anything with the results, then my advice is don’t bother measuring to begin with as you risk disengaging employees more.  As an organizational leader, which side of the 84% do you want to be on?

Gary Bragar, Lead HRO Analyst, NelsonHall