Bridging Talent Management and Workforce Management with HRO

Linda Merritt, HRO Research Analyst, NelsonHall

One of the hottest topics in HR and HRO has been talent management (TM), including everything from recruiting and RPO to performance management and employee engagement. Major ERP vendors have snapped up TM software leaders to strengthen HR product lines, e.g., SAP and SuccessFactors; Oracle and Taleo. Very good moves and very on trend, but let’s not forget about the less flashy powerhouse: workforce management (WM).

TM and WM are both critical components of human capital management (HCM) and depending on definitions and models, there can be a lot of overlap. For my purpose here, TM is about the individual and the capabilities for a specific job position and WM is about groups of workers and managing multiple positions.

TM involves attracting, retaining, and developing people with the required capabilities according to requested volumes and performance management. WM involves workforce planning and forecasting the capabilities and volumes needed and day-to-day scheduling and time and attendance. It takes both processes to have the right number of people, with the right skills, in the right places, at the right time.

Let’s consider two more elements, HR analytics and ROI, that will also benefit from seamless HR systems and processes, which our dear HRO community can enable and deliver. Timely and accurate workforce data is a foundation block upon which HR is built. At least part of the drive for multi-country payroll has been to get better employee data, and there is an important feeder into payroll: time reporting. Today’s leading time and attendance systems offer great flexibility in capturing the detailed data needed for payroll plus analyses of productivity, labor costing, pricing, project billing, workforce planning, etc.

Everybody wants to tie HR and HRO to ROI. Lowering the cost of HR operations alone is not enough. We must show real impact in measurable business results. Simplifying a bit, TM supports improved business results through customer satisfaction and revenues generated; WM supports improved business results through optimizing SG&A via operations and reducing losses.

Many HRO offerings come in basic and advanced levels. HRO providers– ensure you offer both levels of time and attendance, scheduling, and attendance management services. Buyers – take the time to determine whether advanced workforce management services will not only provide better data, but will pay for itself through reductions in overtime and the impact of absences. Also, for many positions and industries, ensuring all customer-facing seats are filled at the right capacity, capability, and time has a direct link to productivity and revenues. Finally, don’t forget about compliance with wage, hour, and labor regulations where accurate records and proactive scheduling are a great defense against fines and losses.

HR and HRO in partnership can be the bridge to strengthen TM and WM across the entire human capital value chain.

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Global Growth Requires Global Mobility and Global HRO

No country is an island, even if some are surrounded by water. Each country, its employers and workforces are part of a globally intertwined macro economy and an employer in any one country can be competing for sales and talent with competitors from around the world.

Global growth requires developing global workforces to: increase a middle class of consumers; develop in-country sales, service, and/or production employees; and take advantage of right-shoring labor pools. Employers also need to access skilled talent in short supply in-country and yet importing talent can find an employer caught up in the turmoil of political as well as logistical issues.

The EU can be especially difficult to navigate. According to a new Accenture study issued at the European Business Summit 2011, “Europe in Tomorrow’s World,” one issue Europe needs to address to get back on track for future growth is the graying of the workforce and how to both develop and access more skilled labor.

As reported by Worldwide ERC, many EU countries are already wading in the waters of culture and immigration and are either considering or taking action to improve opportunities to augment local workforces:

• Sweden reduced its “Experts Tax” by 25% to attract more highly skilled expats, especially in the areas of science, research, and engineering;
• Austria opened its doors to workers from the eight Eastern European EU countries to bring in both highly-skilled and lower-skilled workers for industries such as construction and food service because of its aging population;
• Denmark’s major businesses called for relaxed immigration policies because six of the country’s ten largest businesses say they need to attract foreign employees within the next three years, and most businesses believe that current immigration policy is preventing them from hiring the foreign employees they need.

There are many ways for HRO service providers to assist in globalizing workforces including:

• RPO: Top-tier RPO providers continue to expand coverage into more and more countries.  RPO vendors can also help navigate the work visa process in-country.
• Mobility: Expat assignments are a key tool to developing global leaders, one that must be carefully managed due to cost and complexity. Who better to assist than a workforce mobility expert?
• HR systems and payroll: Managing a multi-country workforce requires timely and accurate data and that is hard to come by without access to a top-notch employee data and reporting system. Services and systems are available from HRO payroll and multi-process HRO providers.
• Consulting: Before acting, a global workforce strategy and polices are needed to guide expansion. A HRO provider with an industry leading reputation in HR consulting can provide you with a one stop resource for transformation planning, implementation, and change management as well as operations.

Whether your company is a major MNC entering into new markets or a mid-sized company expanding into just one additional country, a resource skilled in the dynamics, logistics, and legalities of global workforce growth can be invaluable — check out your friendly HRO global community.

Linda Merritt, Research Director, HRO, NelsonHall

Mobile Apps are Ringing up HRO

Smart phones, mobile devices and “apps” are more and more ubiquitous and indispensible in our personal and business lives. But while the HR phone is ringing in invitation, is HR, and are HRO providers, ready to answer?

Workforce.com’s article, “Avoid These Hurdles to Adopting HR Mobile Apps,” covers a number of the issues HR faces with mobile apps, perhaps the most critical of which is employee and corporate data security. What data is accessible, and how can you safeguard secure data if the device is lost or stolen? Will only organization-provided devices be allowed mobile access to corporate data? To address this piece of the apps pie, IBM Global Process Services is currently developing HR mobile apps  with authentication and encryption capabilities to address its HRO clients’ data security issues, needs and concerns. It will move to client use and testing pilots in 2011.

In-house HR departments and internal IT groups can wrestle with issues across a variety of technology systems, vendors and applications. Those with a multi-process HRO provider,  or at least an HR technology and administration vendor, will have a partner that can lead in the development of security, integration and even the design of applications that work with the major HR ERP systems and integrate standalone applications, like talent management, thereby reducing the burden on in-house IT.

For buyers using the new SaaS HRO platforms, providers will be developing mobile apps that meet the needs of multiple clients, as well as rolling out applications as they become available by the provider of the underlying HR system (usually Oracle or SAP.)

What HR mobile use offerings make sense? Thoughtful design is required to develop a cost effective strategy for the client and the HRO provider, one based on user needs and usability in a mobile setting. Anything that smacks of bells and whistles and looks pretty but is too complex, or does not add to user productivity, will not add value. User research and testing must be utilized to identify and prioritize which features and functions will make sense from a cost, integration and security perspective.

One of the early entrants is RUN Powered by ADP® mobile payroll, now available on the App Store for its small business RUN payroll clients, and is available for iPhone, iPad and iPod touch. In early 2011, ADP will extend the app to other smart phone platforms like Blackberry, Windows Mobile and Droid.

My colleague Gary Bragar commented on mobile HR apps in his blog, HRO Themes at the HR Tech Conference: Portals, Platforms and Self-Service. He noted that not the just concept, but examples of specific uses, such ability to access your insurance medical provider data while traveling, would be valuable.

This is all now emerging technology for HR and HRO, but users are way ahead, with many adopting the “mobile lifestyle” for work and play on the go, anytime, anywhere. Will HRO be there?

Linda Merritt, Research Director, HRO, NelsonHall

The HRO Phrase of the Day – Integrated Ecosystem

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

HR Software – The New HR Spaghetti?

Workforce.com recently reported that while there has been a slowing of sales, HR application spending is still expected to show some growth for 2009. The article said, “…despite the downturn, investments are being made in HR software vendors and technologies that could lead to new capabilities when the economy eventually recovers.” 

According to early results from CedarCrestone’s 2009-2010 HR Systems Survey to be published in full this October, “60% of respondents said they were cautiously continuing their HR technologies plans and budgets but more than ever must support requests for funds with a strong business case.”

And a report NelsonHall recently conducted on the commoditization of IT and BPO services found that seven percent of organizations think SaaS will assist in improving business costs, and nearly 100 percent believe that SaaS plus BPO services will reduce business costs.

There is HR software business being done, but it is not the rip-and-replace new ERP variety. The economic downturn has greatly reduced risk tolerance for big bet, upfront investments or long-term commitments, which is reflected in the slow pace of major HR deals of any sort. The current economic environment, where end-to-end anything seems too aggressive, favors the growth of point solution deals and even piece part and component deals. Not ready to fully integrate talent management or outsource recruiting and staffing? Why not just add a new applicant tracking system or a compensation management application?  Uncertain about outsourcing payroll services today? Consider opting for a hosted solution. The fact is, sales of both hosted and true SaaS software is growing, bolstered by the comfort of lower costs in the short term — let’s call it SaaS at the edge.

My July 24 HRO Insights blog discussed that today’s buyers want fast, flexible and free HRO, and investing in and leveraging a SaaS solution is about as close as you can get to that model. But doing so is not without longer term impacts and strategic HR considerations.

For example, when, how and where should you add on around your core HR system, how many varieties of separate work flow automation can your end users tolerate, and where will business intelligence live in HR? Techie decisions on data architecture, data warehousing and service-oriented architecture are important and have major cost and capability impacts.

Any purchase that is new and pretty, and just adopted and adapted to by users, impacts decisions that will replace it too soon. This effects both multi-process and point solution HRO. The economic benefits of integrated solutions are reduced for both the buyer and service provider when the pressure is to cobble together a service solution around existing software and vendors. Many buyers and providers will have to work around the decisions of today that will still be constraining the opportunities of tomorrow.

Without a strategic plan for HR-wide services technology, HR will end up with a new generation’s version of the old legacy system spaghetti – systems that silo HR functions and data, reducing the capability to manage and measure human capital across HR processes and across the enterprise. Yogi Berra once said, “If you don’t know where you’re going, you’ll end up somewhere else.” I say that if you do not know where you are going, it will be harder to get there from here.

Linda Merritt, Research Director, HRO, NelsonHall