Employee Engagement: Outsourcing Providers Get It

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

Can Data Pave the HRO Path to CHRO? Part 2.

Alright, I am making a leap here linking HR data, HRO and the path to the Chief Human Resources Officer’s chair. But springtime and its greening hopefulness help sprout our flights of fancy!

One of the HR outsourcing (HRO) services that held up well through the economic downturn was payroll, and we saw an increased interest in multi-country payroll by the C-suite. Do you really think that all of sudden, when dollars were super tight, executives decided, “What we need is to invest in a new payroll system”? I think not. I think that business leaders saw a real need for real-time, accurate workforce and labor cost data to better manage one of organizations’ largest expenses. Payroll, especially when it rides with an HRMS backbone, can not only improve payroll administration but also act as a forcing function to getting the workforce data needed in today’s challenging and dynamic business environment.

Wake up sunshine, it’s the workforce data, baby. And HR needs to take the lead in gathering, reporting, analyzing and leveraging it in consulting and advising business leaders. Data will not displace HR; rather, it will strengthen HR if HR is proactive, smart and prepared.

I just reviewed a new study by Dr. Peter Cappelli and Yang Yang, “Who gets the top spot?” The research compares data from 1999 and 2009 to identify changes and trends in backgrounds of the top HR leaders of the Fortune 100.

Their advice for a career path to the top of HR? Spend at least half of your career in HR, have both corporate and field experience, and hold the senior position in talent management (#1 with newer F100 companies) or compensation and benefits (#1 with traditional F100 companies). The area with the largest growth in experience was employee surveys (considered as a proxy for HR metrics, a term not consistently used in 1999), where the rate of those with HR data experience increased by 140 percent.

The Cappelli/Yang study also noted another 2002 U.S. study that reported HR executives needed more business acumen and suggested that “the future will require greater use of metrics (the equivalent of the CFO role for inside the HR function), greater emphasis on talent issues, and vendor management as more administrative issues are outsourced.”

Many of today’s top HR leaders are already benefiting from HR data management skills and experience. One path to developing HR data and analytics capabilities is through outsourcing.

So a call to vendors with HR analytics software and consulting capabilities: how are you using your basic outsourcing services to build a foundation and appetite for your advanced services? How are you partnering with your clients’ retained HR organization and HR leaders to build appreciation for HR data and reporting as a leverage point into human capital strategic business consulting?

And current and future HR leaders, HRO is not just a path to operational cost savings; it can be a valuable pathway to creating greater business impact and career advancement. Are you on the path, or stuck in the weeds?

Linda Merritt, Research Director, HRO, NelsonHall

Can Data Pave the HRO Path to CHRO? Part 1.

I am futuring here, positing a new path for attaining the top spot in HR through HR data and services delivery. While managing HRO and HR shared services is not on the current career path for becoming a senior HR leader, I would like to speculate on this possible future.

In my February 23, 2010 blog on the Puzzling Puzzle of HR, one of the puzzle pieces I mentioned is the role of business and HR analytics. I firmly believe that better HR data leveraged as a part of HR’s consulting services is core to expanding HR’s business impact. And yet, HR has had a long-term frustrating relationship with even basic reporting, let alone with advanced analytics.

Yesterday I listened to a replay of a Human Capital Institute webcast, “Turning Analytics into Action,” presented by Capital Analytics. The session was about moving up from descriptive analytics to predictive analytics, an important goal. One of the participant polling questions asked about common barriers to improved data use. The top two items were; incomplete or messy data (55 percent) and knowing what and how to measure (27 percent). Those responses are frighteningly telling. If HR leaders are still largely struggling with what and how to measure, and face barriers in accessing the various needed data sources, they must first strengthen their  data foundation before they can credibly move up the data value chain.

HR’s current data-related focus is obtaining access to what has happened and moving toward what is happening right now. Its future step is predicting what will happen and advising on how to best prepare, adapt and manage limited resources to achieve business results. A number of HRO vendors want to help HR clients move up the data value chain. For example, IBM, Accenture and Wipro all offer advanced HR analytics as available additional services. Unfortunately, advanced HR analytics are an added cost item, and so far the vendor’s capabilities are ahead of most clients’ willingness to spend, and ability to use and leverage.

The first step is to build the data infrastructure for improved basic HR workforce reporting.  And I do mean workforce, not just service silo by service silo. Knowing what data you need, how and where you will get it and making sure it is valid should be a major part of your strategy and planning for HR and HR services delivery. Basic HR administrative software and outsourcing already provide improved reporting capabilities for many buy-side organizations. When selecting HRO vendors, understand what new data and reports will be available, and determine if there will be assistance for the retained organization in learning to use the new capabilities. When transitioning to a new or upgraded HR service platform, take time during configuration and implementation to wire in as many data elements as you can. If you do not collect the data, you cannot later analyze the data.

In part 2, I’ll take a look at why data matters on the path to the top of HR.

Linda Merritt, Research Director, HRO, NelsonHall