Contrary to my headline, I should say cautious optimism from the New York Hilton as I did not actually attend the conference yesterday. This the first year there was no HRO World component to the event. But the HR Executive Forum agenda included some top HR leaders and senior HRO vendor executives, and the HR Expo for exhibitors was there so it was still a pretty good place to meet with others in the HRO community. My colleague Gary Bragar and I were all over the Hilton for planned meetings, and it was fun waving at others we knew on our way to meetings in the lobby bar, the side bar, the café, the Starbucks, and in conference rooms and suites.
Signs of the still-not-quite-here recovery were pretty abundant. One vendor did have a hotel room in which to meet, and another big name vendor did have an actual conference room and refreshments; coffee, tea and cookies. That was as lavish as it got.
On the more positive side, we had a number of meetings with RPO vendors, and they are experiencing something of an upturn. A few companies are establishing contractual relationships with RPOs to be ready for greater hiring volumes without rebuilding internal recruiting staffs. And it isn’t just the U.S. getting ready to return to hiring. One RPO vendor showed us a list of new first quarter 2010 clients in China, India, France and Mexico. Congratulations.
One of the running themes was choices for clients. There are more entry points into HRO than ever. Want support for your on premises ERP? You got it. Want to move to a hosted or SaaS ERP? It’s there. Plan to blend the two options? Go right ahead. Want full BPO for a set of core services and basic system functionality for your HR staff to use in other areas? No problem. Have a couple of long standing vendors you want to incorporate? It’s done. Onshore, nearshore, offshore or multishore, you can get it your way.
However, all this choice comes with a price for buyers, literally and figuratively. It is easier to navigate choice when you are working within a long-term plan for your HR service delivery needs. So be sure the choices you make today will not limit your options for tomorrow.
Are today’s HRO vendors really excited about signing limited deals that only cover a portion of your entire service delivery system? Well, pretty much yes. In this not-quite-yet-a-recovery period, business is business. But over time, your HRO vendor partners will each be hoping you will expand the relationship and win more of your business. Make sure your selected providers – especially the primary HRO vendor for your HRIS system, and data and foundational employee and manager services – have the current and future planned capabilities and capacities to be your partner in what will ultimately be HR transformation.
But, a word of caution. I did hear there are some buyers still shopping for rock bottom prices. A smaller competitively priced deal? Yes, those are out there. Buying for price only, and assuming a vendor will take a loss to win your business, is a lose-lose proposition. From what I heard yesterday, the major players have learned that lesson.
Overall, the general mood was one of cautious optimism. A couple of vendors said they have signed some nice sized deals, and announcements should be released soon. Good news is always welcome, and we look forward to covering the news in our NelsonHall Tracking Service!
Linda Merritt, Research Director, HRO, NelsonHall
HRO Insights 
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