Posted tagged ‘hr outsourcing’
February 26, 2013

Linda Merritt, HRO Research Analyst, NelsonHall
For years the Hackett Group’s HR benchmarking analysis has shown the increasing use of HR outsourcing. Now its research of Global 1,000 companies over the past two years shows that effective use of outsourcing plays a key role in achieving world class HR organizations. According to advisory practice leader Harry Osle, “our research shows not only that it is possible, but also explains precisely how world-class HR organizations manage to do more with less and play a key role in helping their companies succeed.”Hackett HR benchmarking provides staffing and cost comparisons by HR process and then identifies best practices. Those companies in the top quartile in both efficiency and effectiveness metrics are considered world class.
World class HR costs less
The research finds that world class HR organizations:
- Spend 27% less on HR services per employee than typical companies
- Reduce HR labor costs by 29%
- Operate with 24% fewer HR staff per 1,000 employees
- Spend 50% less on outsourcing
- Dedicate 25% greater spend to technology.
World class HR focuses on operational excellence, talent management, and strong relationships
World class organizations use HR outsourcing more effectively; they outsource at similar levels to typical companies, but they retain fewer in-house staff associated with these processes, gaining greater cost benefits while avoiding work duplication and shadow staff.
HRO service providers have been encouraging clients for years to simplify and standardize processes and policies to gain the most from outsourcing, which matches what world class HR is doing:
- Using more self-service for payroll, training, total rewards administration, and staffing services
- Focusing on automation, standardization, and complexity reduction
- Reducing the number of job grades, health and welfare plans, and compensation plans.
Integrated talent management is another component of success. The HR leaders closely align talent management strategies with business objectives and increase strategic workforce planning capabilities including high-level consulting and analytics and modeling. They also develop internal talent, recruit externally faster, and measure rigorously.
HR executives at world-class organizations have a seat at the table, and are universally involved in business planning compared to less than half of typical companies. Leading HR staffs are much more engaged in managing and facilitating organizational change.
World class HR brings data
According to Hackett, an increased focus on measurement and analytics is another way that world-class HR organizations partner with the business more effectively. Only 20% of typical HR groups report metrics for HR-managed projects, while the leaders do this over three times more often and close to 80% report organizational metrics for change initiatives.
Leading full service HRO vendors have been building out their own talent management offerings and have added options for HR analytics, providing support for two more aspects of world class HR.
Certainly we expect HRO to support operational effectiveness and cost reduction. Now, we know it can do more in the transformation of HR into world class business partners!
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Categories: Hackett Group, HR benchmarking analysis, hro
Tags: compensation plans, Hackett HR benchmarking, Harry Osle, health and welfare plans, HR analytics, HR benchmarking analysis, HR best practices, HR modeling, HR operational excellence, hr outsourcing, HR process, HR-managed projects, HRO service providers, payroll, Staffing services, standardize HR policies, standardize HR processes, talent management, total rewards administration, training, workforce planning
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September 7, 2012

Linda Merritt, HRO Research Analyst, NelsonHall
The future of RPO is bright with growth opportunities in every area of the world. According to NelsonHall’s “HRO Market Forecast 2012 – 2013,” RPO will remain the fastest growing area within HRO.
RPO is still evolving as a service line, moving from back-office paperwork administration to the front lines of recruiting, predictive assessment, and employer brand management. Contract renewals and extensions are now a regular part of the RPO news stream. Among those with announcements of renewals and extensions are:
- Alexander Mann Services
- Capita
- Manpower Group
- Novotus
- Pinstripe.
RPO is not for the faint of heart
With great opportunity comes increased risk. Growth is seldom in a straight path upwards and RPO is also on the leading edge of any business downturn that impacts hiring. It is not uncommon to see up and down swings in revenues of 20% or more between good and bad years. RPO providers need to be ready to rock and roll incredibly fast and be flexible in responding to changes in demand while balancing its own core of subject matter expertise.
RPO is the trail blazer
It is hard for any business including HRO service lines to keep up with new technologies, global service delivery networks, social media, and open device access. To recruit highly skilled multi-generational talent anywhere on the planet, RPO needs the latest tools and technologies to bring capabilities to employers they could not easily and affordably duplicate.
RPO has a direct path to business impact
Dr. John Sullivan, a respected HR thought leader, recently said that RPO has the greatest business impact of any HR function. Dr. Sullivan is referring to The Boston Consulting Group’s (BCG) “Realizing the Value of People Management from Capability to Profitability” research that rates the relative business impact of different HR functions on growth and profitability.
This was a major study of over 4,000 respondents across 102 countries, comparing the difference in revenue growth and profit margins at firms with “very high capability” individual HR functions to the business impacts of “low capability” HR functions. The firms studied had been named to Fortune’s “100 Best Places to Work For” list at least three times in the last ten years; their stock price growth was then compared to the stock price growth of the S&P 500. The “best companies” with great HR saw their stock price increase an average of 109% when the S&P 500 rose only 10% over the last 10 years, up to 10 times higher. Wow!
BCG found that the top ten performing HR functions in rank order were:
- Recruiting
- Onboarding and retention
- Managing talent
- Employer branding
- Performance management and rewards
- Leadership development
- Mastering HR process
- Global people management and global expansion
- Enhancing employee engagement
- Providing HR shared services and outsourcing.
In addition to the good news for RPO, the broader picture is the need for integrated talent management and the boost for HR outsourcing. Great HR can and does directly support great business results, and great RPO and HRO can be a part of that success story.
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Categories: hr outsourcing, hro, recruitment process outsourcing, rpo, rpo research
Tags: 100 Best Places to Work For, Alexander Mann Services, Capita, Dr. John Sullivan, employee engagement, employer brand management, Employer branding, global expansion, Global people management, global service delivery networks, HR functions, hr outsourcing, HR shared services, hro, HRO Market Forecast, integrated talent management, Leadership development, Managing talent, Manpower Group, Mastering HR process, multi-generational talent, nelsonhall, Novotus, Onboarding and retention, open device access, performance management, Pinstripe, predictive assessment, Realizing the Value of People Management from Capability to Profitability, recruiting, rewards, rpo, social media, The Boston Consulting Group
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May 31, 2012
As we near the halfway point, 2012 is going well for HRO. As support, here are choice tidbits from our HRO news coverage and analysis.
First quarter revenues were solid for most vendors. RPO and PEO led the way with continued strong growth in the mid-to-high teens even as new job growth has stalled. Clients are increasingly using HRO services to help manage and balance workforce talent needs. Lower but steady mid-single digit growth is rolling along for benefits and payroll in the traditional HRO service areas.
There was plenty of new business to go around by service line, vendor, geography, and in both the private and public sectors. There was even a very nice smattering of large deals with TCVs in the hundreds of millions!
Logica was awarded a 6-year multi-process HRO contract by BAE Systems to support its 33,000 U.K. employees. Included is implementation and management of a single-tenant, hosted Oracle HR platform, along with payroll, and adminsitrative services in support of talent management functions including recruiting and learning. This is Logica’s second significant sized multi-process HRO win in six months. This is a good indicator of its success as a major preferred partner of Oracle for HRO in Europe.
Speaking of Europe, HP has been awarded a major 15-year multi-process HRO contract by Italian financial services firm UniCredit Business Integrated Solutions SCpA. A major driver for this deal was the need for a platform to support globally standardized HR and payroll processes across the countries in scope (Italy, Austria, plus a third country), serving ~98,000 employees. The HRO services in scope include payroll, time and attendance, workforce administration, learning and development administration, mobility, and ex-pat services.
The U.K. was the hottest area for the public sector. These deals are long wave sales with lots of competition, and there were even incumbent upsets. The services are naturally very important, but the promised cost advantages must be delivered. Lots of hard work and strong partnerships will be needed by the client organizations and the vendors to ensure success.
- Capita was awarded a £250m contract by the Cabinet Office to exclusively manage the Civil Service’s training services. It will both directly deliver training and manage a competitive network of other training suppliers.
- Capita was awarded a £440m contract by the British Army for recruiting services. The Recruitment Partnering Project contract is for 10 years and Capita will also deliver supporting technology for the Royal Navy and the Royal Air Force. It will partner with Kenexa for assessment and recruiting technology.
- Almost at the finish line is CSC as it has been selected as preferred bidder for a £400m, 7-year contract by the MoD to provide pay and pensions administration services to the Service Personnel and Veterans Agency (SPVA) for the U.K. Armed Forces.
Let’s all hope the rest of the year keeps HRO growing and rolling along!
Linda Merritt, HRO Research Analyst, NelsonHall
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Categories: benefits administration, financial results, hr outsourcing, hr outsourcing research, hro, HRO providers, HRO Services, learning outsourcing, Mobility, multi-process hro, nelsonhall, payroll outsourcing, PEO, recruitment process outsourcing, Total Contract Value, Workforce administration, Workforce Talent
Tags: benefits administration, British Army, CabinetOffice, Capita, CSC, HP, HR, hr outsourcing, hr outsourcing research, hro, HRO News, HRO providers, hro research, HRO services, Kenexa, learning outsourcing, mobility, MoD, MPHRO, nelsonhall, payroll outsourcing, pension administration, PEO, Q1 2012 Results, Royal Air Force, Royal Navy, rpo, TCV, UniCredit Business Integrated Solutions, workforce administration
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May 25, 2012
Yesterday, I participated in a very lively online Twitter discussion about employment branding. Branding is a common topic for businesses, particularly for corporate, product, and service identities. Employment branding is important to ensure the attraction and retention of employees that can deliver the business brand experience. Meghan M. Biro’s brand humanization concept is that it is all connected: the business brand, its culture, and its ability to attract and retain talent. That connectivity is a business opportunity for HRO, think RPO and employment branding services, and it is also an issue for HRO service providers as employers.
In an earlier blog this year, I concluded that HRO will not hinder and may even help clients achieve human capital leadership, using leadership and best place to work awards as evidence. Diversity award lists from DiversityInc.com and Diversity MBA magazine have just come out for 2012 and again we see recognition of HRO service providers including Accenture, ADP, and IBM, as well as many companies that use HRO. Here are examples from the world of RPO:
- Alexander Mann Solutions: Citi and Deloitte
- Futurestep: General Mills and Kaiser Permanente
- KellyOCG: GE
- Kenexa: Verizon and U.S. Navy
- ManpowerGroup Solutions: Wells Fargo
- Randstad SourceRight: AT&T and Capital One
- The RightThing, an ADP Company: Kellogg and WellPoint.
As part of my long running theme on talent management, I believe strongly that HRO vendors can and should be leaders in creating the agile workforces of the future. Part of being a leader is practicing what you preach, which is largely what corporate and employment branding is about.
In HRO service providers often need to scale up and scale down quickly, while still ensuring a full slate of experienced subject matter experts. On top of that, many HRO service providers base client care centers and processing centers in talent competitive markets, which often stimulates high turnover and brings together workforces from very different cultures. This is the second challenge of employment branding for HRO, as employers, each service provide needs to build a differentiated employment brand and corporate culture to attract and retain the talent needed to fulfill its business brand.
Part of developing an employment brand is determining what attributes make a particular employer a good place to work and developing programs to ensure those elements are in the workplace and recognized by current and prospective employees and are aligned with business outcomes. Sounds simple, but it surely isn’t.
Buyers, ask your HRO service providers about their workforce practices to see if they practice what they sell. Service providers, in addition to client testimonials, engage and leverage your own employees as brand ambassadors.
Linda Merritt, HRO Research Analyst, NelsonHall
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Categories: Employment Branding, hr outsourcing, hr outsourcing research, hro, HRO providers, hro research, HRO Service Provider, nelsonhall, recruitment process outsourcing, rpo, Talent Management
Tags: Accenture, ADP, Alexander Mann Solutions, AT&T, Brand Humanization, Capital One, Citi, Deloitte, DiversityInc, employment brand, employment branding, Futurestep, GE, General Mills, HR, hr outsourcing, hro, HRO providers, hro research, Human capital leadership, IBM, Kaiser Permanente, Kellogg, KellyOCG, Kenexa, Meghan M. Biro, nelsonhall, Randstad, recruitment process outsourcing, rpo, SourceRight, talent management, The RightThing, twitter, U.S. Navy, Verizon, WellPoint
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May 22, 2012
ManpowerGroup Solutions held its first analyst event outside of the U.S. in Mexico City to focus on the fast-growing Latin America market which includes Mexico and Central America (MeCA), and South America. I must first say the hospitality extended to us by both the Latin America and U.S. ManpowerGroup teams present was the warmest I could have imagined.
The agenda included:
- Introduction to ManpowerGroup MeCA
- Talentism is the new capitalism: ManpowerGroup insights from the World Economic Forum
- The economic landscape in Mexico and Latin America
- ManpowerGroup priorities, progress, and perspectives
- The RPO and MSP market in MeCA
- Visit to ManpowerGroup client and ManpowerGroup office (particularly helpful to understand how jobs are advertised in Mexico)
- Labor and workforce demographics in South America
- ManpowerGroup brand, messaging, and target markets
- The global RPO COE
- Analyst perspectives on topics including: client readiness for global talent planning, client satisfaction, and ManpowerGroup strategies
With such an informative agenda, I’d be writing a small book if I tried to cover all the content, so I’ll focus on the client visit to KidZania. KidZania is a global organization with franchises in Mexico. It is opening its third office there by June, which we were able to visit. KidZania is focused on creating a live learning experience for kids that allows them to role-play adult activities including working different jobs, spending money, and even learning how to drive a miniature car after acquiring a permit. The facility is Disney-like, but better because adults are not allowed inside. ManpowerGroup also has its first job agency within KidZania, so kids can assess their skills and search for jobs available on computers.
ManpowerGroup Solutions began providing RPO services to KidZania in 2010 after the client was searching for an agile vendor that could provide a flexible workforce solution with a focus on talent. The client stated the following three primary objectives of which ManpowerGroup has exceeded its expectations:
- Find the right candidates fast
- Reduce time / cost of recruitment, including quickly scaling up and down to meet hiring needs
- Create the right culture among kids, parents, and collaborators.
I’ll revisit the Latin America market in a future blog, but for now I will say that although Mexico had one of its biggest recessions in 2008 – 2009, it has made a quick recovery, and is expected to create ~1.2m jobs this year. Mexico is about more than just outsourcing for labor arbitrage; it is about outsourcing for job skills where more than 100,000 engineers and technicians graduate every year from science and technology programs. Just last month, for example, Volkswagen’s Audi luxury-car unit announced that it will open its first North American factory in Mexico.
ManpowerGroup has more than 2,000 clients in MeCA and is present in 10 countries in South America. RPO is provided to both Mexican headquartered clients and U.S. MNCs with hiring needs in Mexico.
Gary Bragar, HRO Research Director, NelsonHall
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Categories: Center of Excellence, Flexible Workforce, hr outsourcing, hr outsourcing research, hro, HRO providers, hro research, Labor Arbitrage, MSP, nelsonhall, recruitment process outsourcing
Tags: Audi, CoE, flexible workforce, HR, hr outsourcing, hr outsourcing research, hro, HRO providers, hro research, KidZania, labour arbitrage, Latin America, ManpowerGroup Solutions, Mexico and Central America (MeCA), Mexico City, MNC, MSP, nelsonhall, rpo, South America, Talentism, U.S., Volkswagen, World Economic Forum
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May 10, 2012
Every quarter, my colleague Amy Gurchensky surveys HRO vendors for the NelsonHall HR Outsourcing Confidence Index (HROCI), which is then available for our clients and the participating service providers. In normal times, the HROCI does not change drastically from quarter to quarter; it more shows changes in trends over time. In uncertain times, however, it is a timely way to see changes in market perceptions even before disruptions occur in contract values, volumes, and revenues.
It is of some comfort that the HROCI is in a steady state of small changes from quarter to quarter. That is not a sign of upcoming exuberant growth, but it is a predictor that we will continue to see solid continuous HRO growth throughout 2012.
The most recent HROCI shows a vendor confidence level of 153, where 100 represents unchanged confidence and higher scores indicate increased confidence. While 153 is down a bit from 164 in 1Q 2011, it is in line with 3Q and 4Q 2011 at 151 and 147 respectively. Vendor confidence is often based on how current business is going, along with the pipeline. In HRO, growth from existing clients is just as important as new business. Ever since deals got smaller in scale and scope, there has been increased focus on retaining and growing existing accounts, and we see positive vendor confidence here as well.
Looking at some of the HR lines of service, payroll is once again in the leading position for growth, followed by RPO, multi-process HRO (MPHRO), benefit administration, and learning. MPHRO is expected to perform well in 2012, primarily driven by the need of organizations to standardize HR services across regions and geographies. Vendors such as ADP and NorthgateArinso that previously offered primarily payroll and employee administration services have been very active in acquiring or partnering to extend capabilities to a wider range of platform-based MPHRO functions. In addition, Logica is becoming increasingly successful in this space in Europe.
There is a slight tempering of growth expectations that can be seen in the data, although pipelines still seem solid. I think this is the same kind of hedge-your-bets thinking that is in the larger economy and what we are seeing from HRO buyers. Everyone still has a healthy sense of caution in case things suddenly go sideways.
Luckily, more and more HRO buyers and clients are willing to move ahead and get on with doing business, even if a bit cautiously. Other buyers still suffer from frozen decision-making and unwillingness to make long-term investments. Buyers with clear direction for what they want to achieve through HRO are the most likely to be deal ready – as along as prices are right and there is not too much upfront investment. The earlier service providers can assess readiness, the faster they will be able to fill pipelines with well-qualified prospects.
Linda Merritt, HRO Research Analyst, NelsonHall
Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.
Categories: benefits administration, Employee Administration, hr outsourcing, hr outsourcing research, hro, HRO Buyers, HRO Confidence Index, HRO Growth, learning outsourcing, multi-process hro, nelsonhall, payroll outsourcing, recruitment process outsourcing, Vendor Confidence
Tags: ADP, Amy Gurchensky, benefits administration, Employee administration, Europe, HR, hr outsourcing, hr outsourcing research, hro, HRO Confidence Index, HRO Growth, HRO providers, hro research, learning BPO, Logica, MPHRO, nelsonhall, NorthgateArinso, rpo, Vendor Confidence
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May 3, 2012
HRO is an ever changing set of services, processes, technologies, and client needs. My HRO colleague Amy Gurchensky recently covered one of the emerging service areas in benefits: health care exchanges. I wanted to know more about active employee exchanges and arranged for educational briefings with Aon Hewitt and Mercer since both are already in this market.
Both of the HRO service providers have found similar reactions from insurers to the exchanges. As with any new concept, some carriers are more progressive and recognize changing market needs. Other carriers are more cautious and methodical and want to know more about how the new models work, how to underwrite the risk, client implications, etc.
Even though health care exchanges offer preconfigured selections with price advantages for employers, exchanges are still group programs and the employer is still the plan sponsor for active pre-65 participants. Aon Hewitt’s corporate exchange offering includes services to help clients meet their obligations as plan sponsors.
Exchanges are a bundled service. Along with structured plans from participating carriers, traditional benefits administration services are also included. Both Mercer and Aon Hewitt have great depth in providing end-to-end participant services, handling escalations, and advocacy. For example, Mercer’s exchange offering includes clinical case management support as well as program oversight and audits. Aon Hewitt includes both tier one and tier two call center support and advocacy services for participants with issues or claims that are more complex and require a greater level of case management and carrier interaction.
Both companies are major league benefits administrators, and I wondered how the exchanges may impact revenues as clients move to an exchange-style service. Mercer sees the revenue impact as neutral initially and additive overall; Aon Hewitt views the exchange markets as an important natural extension of its traditional benefit administration services.
Today, health care exchanges are a very small part of benefits HRO, but there is significant growth potential. Mercer will be testing service models in rolling its Mercer Benefits Choice Exchange (MBCE) for employers with less than 1,000 employees, so expect to see the changes and evolutions that are common with emerging services. It will not be surprising if more HRO vendors launch exchanges, and even a couple large carriers may decide to offer exchange services directly as the market develops.
The future of health care private exchanges is not dependent on whether or not the current U.S. health care reform is amended or survives. Research indicates that up to 90% of employers offering health care coverage intend to continue to offer coverage in 2014. Employers will continue to need options that help them offer competitive benefits at controllable costs, and innovative HRO service providers will continue to develop new services and options to meet those changing market needs.
Linda Merritt, Research Analyst, HRO, NelsonHall
Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.
Categories: benefits administration, Call Center, Health Care Exchange, hr outsourcing, hr outsourcing research, hro, HRO providers, hro research, nelsonhall
Tags: @amyg_nh, Amy Gurchensky, Aon Hewitt, benefits administration, call center support, Health Care Exchange, health care reform, HR, hr outsourcing, hr outsourcing research, hro, HRO providers, hro research, HRO service providers, Mercer, Mercer Benefits Choice Exchange, nelsonhall
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May 2, 2012
Mercer’s What’s Working Survey found that one-third of European participants are seriously considering leaving their organization. This had me immediately questioning why. Does it have something to do with the employee’s benefits package? Probably not in the U.K. since 36% of respondents stated that their benefits package was the primary reason for staying at their organization.
In fact, 30% of survey participants in the U.K. said that their employer’s benefit package was the key reason for joining the company in the first place, up 5% since 2005. Across Europe including France, Germany, Netherlands, Spain, and Italy, the average percent of employees that are content with their benefits package is 50%, representing a general decline over the last five years.
The survey shows what employees value varies by country, culture, and age. While surveyed European employees have many common interests, there is variation by country. Employees in France and Italy were the most dissatisfied over many of the employee value proposition elements studied including base pay, benefits, and development opportunities. In most cases, score varied. For example, employees in the Netherlands were less likely to intend to leave and were satisfied with their benefits, but were dissatisfied with employer assistance in retirement plans and base pay.
With pressure on all aspects of workforce costs, including benefits, what is an employer to do? One option is to add a flexible benefits program to increase employee desired choice while still controlling costs. Program designs include one or both of the following:
- Employer paid benefit “credits” that employees can use to select the choices most important to them
- Employee paid benefits available through the employer, payable with payroll deductions and usually at better prices than available in the general market.
While flexible benefits schemes have been slow to take off, the continued adoption rate will have a positive effect on flexible benefits service providers since internal HR departments tend to lack the skills necessary to administer these benefit choices successfully. According to Mercer’s European Survey on Employee Choice in Benefits, flexible benefits programs generally meet employer objectives (63%) and are well-received by employees (71%).
Using HRO to administer the programs reduces administrative cost and complexity for employers. The number of European organizations outsourcing their flexible benefit plan has increased. Specifically, Mercer’s survey found the following:
- 36% of employers outsourced their entire flexible benefits program, up from 28% in 2009
- 33% use a combination of in-sourcing and outsourcing for their flex program, up from 23%
- 16% manage the flex offering in-house, down from 35%.
NelsonHall’s upcoming Targeting Benefits Administration market analysis report will indicate that growth opportunities for flexible benefits are very good as organizations look for an alternative to salary increases and bonuses while meeting the needs of increasingly diverse workforces.
Amy L. Gurchensky, Research Analyst, HRO, NelsonHall
Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.
Categories: benefits administration, Benefits Package, Development Opportunities, Diverse Workforces, Employer Benefits, Flex Benefits, flexible benefits program, hr outsourcing, hr outsourcing research, hro, HRO providers, hro research, nelsonhall, Retirement planning
Tags: base pay, benefits, benefits administration, benefits package, development opportunities, Diverse workforces, employee benefits, Europe, Flex benefits, flexible benefits program, HR, hr outsourcing, hro, HRO providers, hro research, Mercer, nelsonhall, NelsonHall Targeting Benefits Administration Market Analysis, retirement plans, Targeting Benefits Administration, U.K., workforce costs
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April 26, 2012
Even when the U.S. unemployment rate was over 10%, we’ve heard that the unemployment of skilled workers with college degrees remained low at ~4-5%, and we’ve read data on just how bad the skill shortage is, including ManpowerGroup’s findings that 52% of U.S. companies are struggling to fill key jobs. We’ve also heard from me as an analyst (and former HRO buy-side client), pointing to the fact that development and retention of talent are more paramount than ever. But not as much has been written about what are the top global skill shortages. Well not until last week when U.K.-based global recruitment and RPO provider Hays issued a good concise summary of the top ten global skill shortages.
The list divides the skills by soft skills and hard skills that are in shortage globally.
Soft Skills
- Languages
- People and communication
- Team management and leadership
- Organization.
Hard Skills
- Financial and budgetary
- IT
- Green skills
- Procurement and negotiation
- Research and development
- Healthcare.
Beyond being good for job candidates and employees to know the skills they need to focus on; employers need to do a better job of investing in their workforce to develop and retain the talent that they already have. In fact, employees are looking for that. Mercer’s newly released eBook, “What’s Working Around the World”, points to the fact that career advancement and training opportunities are among the top priorities of the employee value proposition in many countries and are needed to address low levels of employee engagement.
As I get ready to publish my next global learning BPO report, I am optimistic to hear that talent management focus is no longer just a desired priority but is now a business imperative. Clients are increasingly focused on learning linked to talent management, including the linkage of learning to performance management and developmental plans. To meet client needs to attract, develop, and retain talent, vendors have been developing their talent management capability. This includes MPHRO vendors such as Xerox, Aon Hewitt, Talent2, IBM, and Accenture, whose talent management offering includes workforce forecasting and analytics, recruitment, performance management, succession planning, and learning.
In the report, I also wrote about the advent of social learning. For now, I’ll just say that speed to competence, followed by how the new generation of employees that are entering the workforce wants to learn, as well as the need for improved talent management, are what’s driving the acceleration of social learning.
If you are not already following me on Twitter, please do so at @GaryB_NH as I will tweet when the LBPO report is published. I’m targeting the 30th of April, in time for my presentation at the HRO Today Forum on May 1st titled State of the Learning BPO Marketplace and the Emergence of Social Learning.
Gary Bragar, HRO Research Director, NelsonHall.
Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.
Categories: hr outsourcing, hr outsourcing research, hro, HRO providers, hro research, lbpo, learning outsourcing, multi-process hro, nelsonhall, skilled labor, Skills Gap, Social Learning, Talent Management, Unemployment rate, Workforce Investment, workforce retention
Tags: Accenture, Aon Hewitt, Hard Skills, Hays, HR, hr outsourcing, hr outsourcing research, hro, HRO providers, hro research, HRO Today, IBM, learning BPO, Manpower, Mercer, MPHRO, nelsonhall, skilled labor, Skills Gap, Social Learning, Soft Skills, talent management, Talent2, top global skills shortage, Unemployment levels, Workforce Investment, workforce retention, Xerox
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April 25, 2012
NorthgateArinso (NGA) recently held its annual analyst day in Boston. Chief Executive Mike Ettling reported that NGA’s revenues have increased 6-7% every quarter for the last six quarters and it had brought in over £500m in revenues for 2011. With very good growth under its belt and its built-out set of services, updated core technologies, and global delivery network, NGA is setting new goals to reach its target of $1bn in revenues by 2014.
The company is defining itself as “an HR BPaaS business enabled by technology, process, and domain expertise.” Business-platform-as-a-service is what many are calling business platforms, and since we are talking about HRO, I call it HRO platforms. From that perspective, NGA is already in the BPaaS business of providing bundled business process services and technology solutions.
NGA has ~8,500 personnel in 35 countries with HR technology, outsourcing, and consulting services in over 100 countries. That will not change. It will continue to offer unbundled technology and software services for payroll and HR. It will also continue to offer consulting services for HR systems and implementation of sand integrations, as both are good revenue streams. What is new is that the company is staking out its direction for future growth as an HRO services company, not a technology company.
How does an already good, solid HRO performer accelerate to outpace its competitors? For NGA, the answer is in structure and cadence.
Structure
Management structure is seen in the cascading goals, upcoming changes in organizational structure and alignment of compensation, the use of metrics, and the top-down involvement in selecting and managing key initiatives, investments, and projects. NGA is continuing to standardize its services into a catalog of selections, standardize implementation, and even standardize the offer to delivery process. It is developing an internal system called ScopeHR, which will standardize and automate the production of all key BPO/BPaaS information and documents to make solution selection, selling, pricing, and contracting easier, faster, and more efficient for both the client and NGA.
Cadence
Timing and pacing are also NGA keys in achieving profitable long-term growth. This includes an understanding of how to migrate and grow client scale and scope over time, to step-by-step refine its robust system for services delivery that includes moving to “mega centers of scale” and plans for workforce development to avoid capability gaps. Components of the service delivery value chain are addressed, cross-checked, and backed up. Continuous improvement is also seen in the use of Lean Six Sigma teams, CCMI standards, and an operational excellence framework to increase capability maturity while growing the business and retaining satisfied customers.
There is still a lot of uncertainty in the economy, which may impact NGA’s plans and timing. Given NorthgateArinso’s track record so far, clear goals, and achievement plans, if it adds in a bit of flexibility, the odds are good that it will hit its target.
Linda Merritt, Research Analyst, HRO, NelsonHall
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Categories: Business Process Outsourcing, HR BPaaS, hr outsourcing, hr outsourcing research, hro, HRO Platform, hro research, nelsonhall
Tags: bpo, Cadence, HR, HR BPaaS, hr outsourcing, hro, HRO contracts, HRO Platform, HRO providers, hro research, nelsonhall, NGA, NorthgateArinso, ScopeHR, Structure
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