Posted tagged ‘HR consulting’

HRO 2012 Trends – The Evolution of Talent Management

January 12, 2012

The NelsonHall HRO team is pleased to once again contribute the annual HRO Today thought leaders forecast of trends that will influence the year ahead. ‘Artful Predictions’ covers a range of topics with talent management (TM) as one of the highlighted trends. We have covered the subject of talent management frequently as we see the opportunity for it to become an integral part of HR business process outsourcing.

For some time, I have called talent management a disputed ground and a potentially disruptive force that could shake up the HRO field. Why? This is because TM elements include so much of the human capital management value chain and cross over everything—from HR ERPs, software modules, HRO business process outsourcing, HR consulting and the roles of HR leaders, HR business partners, and internal shared service centers. TM includes performance management, succession and career planning, recruiting and staffing, compensation, and learning. I also include workforce planning and management under the TM umbrella.

In addition to the HR ERP vendors and the specialty TM software providers, there are HRO providers that are also building out their TM capability internally as well as through strategic partnerships and acquisitions.

  • Kenexa acquired BHI (Batrus Hollweg) a TM company. Although Kenexa has developed TM expertise internally, the company has also been enhancing its efforts over the past few years through prior acquisitions that have included:
    • to strengthen its compensation management capability
    • The Centre for High Performance Development to further strengthen its leadership development and management training offering
    • Gantz Wiley Research to increase its employee survey research capabilities.
  • Mercer acquired Censeo Corporation to enhance its TM consulting capabilities and online platform of assessment services.
  • Both Kenexa and NGA are partnering with SkillSoft for learning content.
  • In July, Talent2 re-branded itself to simplify its talent management focus.
    • It also became a reseller of Cornerstone OnDemand, most widely used for its performance management, including succession planning and learning modules.
    • Talent2 also added advisory services as a service offering to help clients more effectively deploy the capabilities.

With recruiting as one of the core TM processes, RPO vendors are among the early leaders in developing internal as well as external TM service options. NorthgateArinso has been moving in this area as well, coming from the standpoint of bring it all together into one integrated system and services package. With the acquisition of The Right Thing, ADP signals both a stronger move into RPO and its interest in TM.

The HRO Today article also discusses whether HRO has reached the maturity stage of providing ‘true business value’. I believe that talent management evolving into a full-fledged HRO service with technology-enabled tools, data integration across the full suite of HR data, supported by analytics assistance and consulting is critical to HRO providing true business value results for clients and achieving its own full measure of success as an invaluable industry.

Linda Merritt, Research Analyst, HRO, NelsonHall

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Is Your Vendor Bullish on HRO?

May 5, 2011

Sometimes we hear service provider’s recommitment to the world of HRO. Such commitment is to be expected from vendors whose entire business is HR-related. It is somewhat surprising to see such commitment from large companies that make most of their money in other service lines, including Accenture, Aon, and IBM.

Take Aon for example. Its history is largely rooted in insurance underwriting and risk management, and HR services were a minor contributor without much visible synergy. Rather than jettison the smaller business, Aon more than doubled down with the acquisition of Hewitt last year. Now Aon Hewitt is about 40% of Aon’s revenues and Aon’s CEO, Greg Case, says he is bullish on all of the opportunity areas for HR Solutions in both the consulting and outsourcing arena worldwide.

Meanwhile, Aon’s HR Solutions revenues for Q1 2011 were $1.1bn and flat in organic growth. Consulting came in at $569m with 4% organic growth. Outsourcing had $556 in revenues and was down 3% organically. Also, this quarter Aon Hewitt took a $61m write-down for a reduction in intangible assets. Such write-downs are less frequent, but not totally gone as some clients reduce HRO scope, negotiate lower pricing, or change vendors.

Other HRO issues persist due to the nature of the business and impact all of the vendors. As a matter of survival, service providers like Aon Hewitt and others have grown savvier in managing the rapid declines in client revenues when the economy tanks, employment drops, and discretionary investment dries up, while still meeting client commitments.

This is not a business for the faint of heart. Perhaps you do need to be a bit bullish to get in and stay in the HRO arena. What will it take to make HRO the business, people, and revenue growth engine we all want it to be?

For one, go where the growth is. For MNC’s that continues to be internationally, and it will be increasing as internal markets develop. Both Accenture and Aon see solid current and future growth across the world beyond the mature markets. Global footprints grow led by the larger part of the vendors business. The chance to add-on HR consulting and outsourcing will follow at less opportunity cost, often using the same delivery locations and networks and both Aon Hewitt and Accenture are continuing to add talent in select global markets.

For another, focus on moving up the business value chain. NelsonHall sees a very positive environment for process improvement-oriented offerings with organizations using both consulting and systems integration and, increasingly, BPO to adopt new business models which are more cost-effective, more globalized, and have greater customer impact. For HRO, it is key to create customer impact beyond HR cost efficiency.

Buyers, is your HRO provider building capacity where you need? Are they able to pull through from their larger business segments the insight and capabilities you need to deliver business results?

Linda Merritt, Research Director, HRO, NelsonHall

The HRO Phrase of the Day – Integrated Ecosystem

October 20, 2010

Can extensive multi-process HRO (MPHRO) beat a well-managed internal HRIT and shared services organization? I believe it is possible, especially if the MPHRO provider is a leader in achieving integrated services.

I am a strong proponent of strategic HR that includes a strategic plan for HR technology, processes and services. Without that foundation and the business intelligence it can provide, “strategic” HR consulting is operating with one arm tied behind its back. Why limit your ability to drive business results and be viewed as a strategic asset when technology enablement and automation can help you get there?

While specific HRO provider case studies that prove the point are still needed, at the broader level it is possible to show that the investment in and use of an integrated set of HR technologies can make a measurable difference in business results. Set aside a few minutes to study the CedarCrestone 2010-2011 HR Systems Survey.

The CedarCrestone survey is not about HRO, but its messages apply just as much, if not more so, to MPHRO vendors. MPHRO providers need to show: 1) they are farther along the path; 2) offer the best balance of cost, time, effort and return to achieve the HR systems and services that deliver operational excellence at competitive operating expense; and 3) provide the HR platform for strategic talent management, workforce management and workforce optimization that increases the rate of sales growth and revenue per employee.

The HRO community has a moment in time opportunity before it. Some activities taken up as part of addressing the economic crisis need to be reinforced if they are to become part of the new normal in HR and business operations. We saw increased demand for workforce information; who, how many, at what cost and where? As a focus on the future returns, investments will still be lean and need to be targeted to achieve the largest impact – providing an excellent opportunity for strategic HR counsel supported by fact-based data and analytical projections.

The demand is already here, and HR consulting revenues are on the rise. This is an opportunity for MPHRO as well. Organizations that slapped together a set of individual technologies and providers may have limited ability to connect the dots across important HR and business data pools. To attain maximum results, everything needs to work together and connect to all the needed data sources and repositories.

I used the term integrated ecosystem in my blog title because it takes a variety of products and providers to assemble the needed systems and services. What is “behind the curtain” matters less if you have the right MPHRO vendor managing the integrations into a seamless user experience for your business. Building and managing the comprehensive systems outlined in the CedarCrestone study has a business impact for those few companies that are just about there, but few are at the stage of full optimization. Who better than an MPHRO partner to help you get there!

Linda Merritt, Research Director, HRO, NelsonHall