Posted tagged ‘Infosys’

HRO – When Will the Horizontal Go Vertical to Grow?

January 20, 2011

Most HRO Insight blogs provide commentary on HRO market news. Occasionally, I like to speculate and dream about how HRO can fully become the linchpin in leveraging HR into the strategic business partner the HR profession has long desired – and business has long needed.  This week, I blend a bit of both market news and pondering on the vertical specialization of HRO.

According to the January 2011 NelsonHall BPO Index, 2010 was an uneven year for BPO recovery.  Total contract value (TCV) for HRO declined from $2.3Bn to $1.5Bn largely due to the drop off in Europe.  North America HRO almost held its own with $1.3Bn in 2010 compared to $1.6Bn in 2009.

Which BPO area grew its piece of the smaller BPO pie?  The options include back office, middle office, and front office.  Back office BPO functions are horizontal and include HRO and F&A; middle office BPO functions cover vertical industry-specific services such as mortgage processing or check processing in the banking sector, etc.; and front office BPO includes customer contact and sales centers.  Middle office, or industry-specific BPO, is the winner with the largest area at $13Bn and 69% of 2010 TCV, leaping up from a 40% share in 2009.  Growth in a down market is surely the sign of compelling client interest and savvy vendors meeting their needs.

Horizontal BPO processes cross the enterprise and are part of almost every business.  The problem is mistaking universality for being generic.  HRO is too often marketed on the strengths of cost and process functionality.  Customization is used for adapting to the quirks of client’s prior HR systems and processes.  To fight the costly morass of over-customization, HRO service providers have strengthened the use of preprogrammed selectable parameters – building in cost effective flexibility, but also reinforcing the generic aspect of HRO.

Rajiv Raghunandan, Infosys BPO Strategic Business Practice Head for Sales and Fulfillment, was recently interviewed by SSON and commented on how Infosys is taking an end-to-end process view of the F&A order-to-cash process and expanding its revenue, client relationships, and market opportunities.  Infosys leveraged its internal knowledge and experience from its client base to find areas of critical mass to take what was a horizontal process and verticalize it for a growing list of industry segments.

Vertical specialization can and should be done for HR as well.  As I have previously mentioned, TriNet, a PEO and HRO service provider in the small and mid market, is already offering integrated solutions for software and banking.  TriNet combined its core technology with customized services for hiring, compensation, performance management, and risk mitigation.

Sustainable growth in HRO is dependent on breaking the bounds of cost-driven volume administrative transaction processing and moving up the value chain to strategic business impacting partnerships.  There is a largely untapped HRO gold mine out there.  Just think of what the large HRO service providers could do with a gathering and packing of the knowledge and services already resident in their client bases!

Linda Merritt, Research Director, HRO, NelsonHall

The Next Shore for HRO – Finding Cultural Compatibility

September 1, 2010

HRO clients have become more open to multishoring to gain cost, scalability and flexibility advantages. And as the major HRO vendors have globalized their service delivery capabilities, some portion of the work is increasingly likely to be done offshore in order for their clients to benefit from optimized services. 

Voice services have been the most challenging area to find culturally compatible locations with a scalable English speaking talent base. According to the new NelsonHall market research report, “BPO Delivery from the Philippines,” the Philippines is a growing location for both voice-based and back-office BPO services, with more than 386,000 personnel across a growing number of service providers. The largest segment by far is customer management services for the U.S., with F&A, especially order to cash outsourcing, as the next largest.  Major BPO vendors, including Convergys, IBM, Infosys, Logica, NorthgateArinso and Wipro, are already there.

HRO services are there as well. HRO is a small, but growing, portion of the service base in the Philippines. The top HRO services supported are employee care and payroll.  With HRO service providers using sophisticated workflow technology and processes, portions of service lines can be handled from just about any location. In the Philippines, initial screenings for RPO, and enrollment and inquiries for learning BPO are supported, as are employee data management, benefits administration and mobility services.

Right now services from the Philippines are highly centered on the U.S., followed by Canada and the U.K. Future growth is expected from English-speaking Asia Pacific countries like Australia and New Zealand. In addition to organic growth for the services already located there, healthcare from both the payer and provider sides is seen as a good opportunity for expanded services.

Latin America is also growing as a BPO region. I recently spoke with country representatives from Chile and Jamaica, and both countries would like to add HRO to the other BPO service lines already migrating to Latin America as it grows as a near shore region and as its own market.

The HRO community can look forward to a wide range of shoring options and cost points. The HRO back-office location will increasingly be by vendor choice, and less and less visible to clients. HRO voice services will remain a client decision to balance cultural compatibility, scalability, flexibility and cost.

Linda Merritt, HRO Research Director, NelsonHall

Building a Sustainable Base of HRO Clients

August 24, 2010

Last week’s Infosys BPO analyst day, which I blogged about the day after I attended, got me thinking about what it takes to build a sustainable base of long-term client relationships. This is important for HRO vendors and clients where contracts are multi-year, and services can be complex, difficult and expensive to transition. Fifty percent or more of an HRO vendor’s organic growth can be from long-term customers.

During analyst day, ADP brought in several clients for us to meet with, and Infosys BPO brought in five customers for group and one-on-one meetings. Sure, clients are carefully selected for such opportunities, but it’s still a nice show of vendor confidence. So let’s use this to cover two elements in building a strong foundation for profitable client relationships.

Provide a consistently high level of services across all customer segments.
Many early HRO clients felt the quality of their service experience relied too much on a particular account manager, service team or location, whether they were a big dog client or not, as well as their own ability to actively “manage” the service provider.

The Infosys customers represented different service lines, including HRO, sizes from small/mid to large market, with both U.S. and global coverage, and ranged from a brand new client still in transition to a client that pre-dated the formation of Infosys BPO in 2002. Think about that for a minute. It is possible to build and sustain a consistently high level of HRO services, service centers and personnel across all services, segments and regions, even given the higher rates of turnover common in many offshore locations. Not easy, but possible.

Be a strategic partner and grow your business without “selling.”
Another common HRO complaint is the lack of innovation once the services are up and running. Regularly bringing the client relevant and knowledgeable suggestions and best practices on how to improve processes and practices keeps the conversation on scale and scope open and ongoing. Even if clients choose not to act on the suggestions, they appreciate the thought. But note I underlined relevant and knowledgeable for emphasis. Every client wants to know you understand and care about its unique business needs, and that you have the domain experience and expertise to be a strategic partner. In a strategic partnership, the client feels it can do more with you than on its own.

HRO buyers, when assessing vendors, consider talking not only to clients most like your company, but also to clients of different services, sizes and geographies. Ask service providers about price, performance, customer satisfaction and what percent of organic growth comes from current clients.

HRO vendors, how consistent is your service experience? How well do you continually build and reinforce your brand as you grow and globalize? Think you’re a strategic partner? Is the evidence present in growth of mature accounts, sole source opportunities and inclusion in business planning? Do your clients bring new projects and service opportunities to you? They will if you are a consistent and trusted strategic partner.

Linda Merritt, Research Director, HRO, NelsonHall

Top HR Issues by Geography: The Same, But Different

July 23, 2010

In blogs earlier this month I addressed: 1) increasing use of SaaS; and 2) cost reduction as a top HRO driver based on data from NelsonHall’s recently published HRO buyer report, “HR Issues and Outsourcing Intentions.” Now let’s talk about the top HR management issues by geography.

On a 1 – 5 scale, with 5 being most important:

Asia Importance
Low consistency of HR processes across the organization 4.8
Difficulties in obtaining consistent single view of the employee 4.4
Need accurate and consolidated workforce information and reports 4.3
   
Continental Europe Importance
Difficulties in obtaining consistent single view of the employee 4.4
Corporate requirement for reductions in costs of HR administration 4.3
Need accurate and consolidated workforce information and reports 4.1
   
U.K Importance
Corporate requirement for reductions in costs of HR administration 4.2
Need accurate and consolidated workforce information and reports 4.1
Need to improve identification of high performers and succession management 4.0
   
U.S. Importance
Corporate requirement for reductions in costs of HR administration 4.2
Need to improve identification of high performers and succession management 4.2
Need for improved talent management capability 4.1

While the relative rankings vary a bit from geo to geo, and although there are a couple of outlier line items, the cited HR management issues can pretty much all be addressed by outsourcing core HR technology. Not surprisingly, this was identified as the number one HR service to be outsourced in our HRO buyer study, and its validity is bearing itself out as evidenced by recently-signed HRO contacts that are either for technology or technology plus HRO services. Let’s look at a couple of examples:

•  In just the last two weeks, Netherlands-based Raet has been awarded five SaaS contracts for its HR portal, RaetOnline, to leverage one system for HR and payroll, standardize to achieve improved efficiency, data accuracy and cost savings from elimination of systems and/or what may have been manual processes, and gain self-service capabilities 

•  Infosys is implementing a platform-based HRIS and global payroll platform for a leading Australian insurer, using PeopleSoft 9.0 to enable the client to have one standard integrated platform, eliminate disparate technologies, drive up process consistency, increase data accuracy and reduce costs

Tangentially, I found it interesting that cost reduction didn’t even make it into the top three HR management issues in Asia, while the U.S. and U.K. cited it as the primary issue, and continental Europe ranked it second. This made me think about my prior background in quality, long before I started working in HRO, and the work of Dr. Deming and Dr. Juran who trained Asian workers and managers on the importance of quality for three decades following World War II. Their tenet was that if you first focus on process and quality (of data), reductions in cost will follow. Cost reduction is of course important in Asia, but there’s clearly a different mindset in how to achieve it. Rather than my views on the principles of management, let’s engage. Where do you think cost reduction should fall in the “fix HR issues” equation?

Gary Bragar, Senior HR Outsourcing Analyst, NelsonHall

Will Talent Management be the Next Hot Thing in HRO?

June 29, 2010

One of the challenges for any business, including HRO, is balancing meeting today’s needs while getting ready for the future. I am seeing a positive tone change emerging in HR articles, blogs, service provider and consulting firm research and marketing. Broader workforce issues are starting to get attention again, and will hopefully lead to more business for HRO.

Talent management is one of the topics getting a lot more coverage. After the deep cuts, cost controls and contraction of the labor market of the recent past, employers are now interested in how they are going to shape their talent programs going forward.

HRE Online has a very good article by Tom Starner, Refocusing on Talent Management, that references recent talent management research by Ernst & Young and Mercer. According to Mercer, 51 percent of surveyed employers rated talent management as a top priority, and 76 percent expect it will be a top priority in the next three to five years.

Ernst & Young’s study highlighted three key initiatives: rebuilding the internal talent pipeline; understanding and coordination global talent for key positions; and offering flexible work strategies.

With the expected slow return to growth, employers want to know how well targeted talent management investments are working. Mercer reports that only five percent of respondents were confident in their ability to effectively measure the impact of talent decisions and investments, and 41 percent said they were not at all effective.

Institute for Corporate Productivity (i4cp) research indicates that high-performance organizations were more than twice as likely to emphasize the measurement of talent management (37 percent) than low-performing organizations (16 percent).

A talent management application suite can help organizations manage, track and report on talent management activities, and there many in the marketplace. But some clients have learned that no matter how capable the application, if it isn’t well understood and used, it is no bargain.

Mercer has just launched its new offering, Human Capital Direct, a rewards and talent management consulting and technology service based on software from Peopleclick Authoria. Mercer is embedding its own intellectual capital, and will be implementing and hosting the software and surrounding the whole package with pre- and post-implementation consulting.

Companies can get talent management applications as stand-alone services. The same is true for the broader systems that cover HR, payroll and more; buyers can contract directly from Oracle and SAP for HR SaaS applications. They can also obtain them as fully supported BPO services where vendors such as ADP, Logica, NorthgateArinso, Infosys and others add portals, tools, services and reporting, along with implementation support and hosting.

I always like seeing a full range of available HRO offerings, from client-managed to vendor-managed, from basic cost saving functionality to fully featured transformative vendor relationships. Each type and level of HRO has its time and place.

Can talent management be turned into a full platform BPO service? Is now the time? Mercer is hoping the answer is “yes.” What do you think?

Linda Merritt

NelsonHall

Research Director, HRO 

Linda Merritt, Research Director, HRO, NelsonHall

The Places We Will Go to Grow HRO

November 12, 2009

The players in the multi-process HRO field have been changing. As we ready for economic recovery, will there be new entrants? Who is leaving? Who is for sale? And who is on the hunt for an acquisition?

As we have at least a few minutes before the recovery takes off, let’s have a little fun speculating.

Tidbits

I recently interviewed several of the new India-based HRO provider entrants. Each said that while they were not explicitly looking for acquisitions they would consider the “right opportunities.”

The United States remains the largest market for HRO, and there is more than one non-U.S. based player looking to grow business in the U.S.

The Economic Times reported this week that Infosys BPO CEO Amitabh Chaudhry talked to reporters on the sidelines of the World Economic Forum in New Delhi, India. While Infosys already has eight delivery centers around the globe, including in Mexico, it does not have one in the U.S. According to the press coverage, Infosys BPO is reportedly planning to set up a new delivery center in the U. S. before the end of this financial year. In addition, “Infosys also said it is eyeing acquisitions worth USD 50-200 million in areas where the company has a small presence. ‘The acquisitions will be funded through cash in areas we have a small presence,’ Chaudhry said.”

While the above reported comments are about Infosys’ broader BPO, it is a safe leap to assume the interest is there to further expand its HR business as well.

Is NorthgateArinso also looking to expand its share of business in the U.S.?  If the two most recent new experienced executive hires are any indication, the answer is yes.  In September, Trey Campbell was brought aboard as President of the Americas. And in October, Troy Workman joined as VP of Service Delivery in the Americas.  

Trends

We have been seeing acquisitions and partnerships to fill out service and coverage footprints to provide expanded services to multi-national companies, and that activity will continue.

Growth into emerging markets is regularly predicted and will happen in due time.

Given the anticipation of a slower recovery in Europe, combined with its less mature HRO market, it is not likely to lead the way in growth.

So the U.S. will remain a growth target magnet for HRO, in everything from applications to discrete processes to multi-process HRO.

Are you a small-to medium-size niche HRO provider with state-of-the-art technology, specialty services with deep subject matter expertise or coverage in a desirable geography? Be ready to answer the knock of opportunity.

And buyers, good news. There are providers who want to be where you are and where you are going, whether it is in North America or around the world.

Linda Merritt, Research Director, HRO, NelsonHall

HRO Providers – Are You Sweating Yet?

August 25, 2009

You may be sweating because it is deep in the dog days of summer, hot humid and hazy. Or perhaps you are sweating and fretting wondering when the recession will end. Instead, as an HRO service provider, you should be sweating to ensure you are ready to hit the ground running as the recession truly begins to end.

At the Federal Reserve’s annual retreat last week, Chairman Ben Bernanke, said, “The prospects for a return to growth in the near term appear good.” And according to the August 21 New York Times, Bernanke and European and Asian central bankers were all expressing increased optimism. At the same time, Bernanke repeated his warning that economic recovery was likely to be slow and arduous, and that unemployment would remain high for another year.

Okay, so no one expects a no-sweat recovery, but we are seeing signs that the recession is ending and the recovery is soon to begin. The question is, are you ready? Really, really ready?

Did you invest wisely?

ACS is doubling down in a big way, having already invested more than $28 million in strengthening its Total Benefits Outsourcing offerings.  Infosys and Genpact are among the Indian entrants into the multi-process HRO space that are building their own platforms for technology and service delivery.

Have you managed your footprint?

Some have partnered to strengthen their geographic footprint, or fill a gap in their services portfolio.

•  Xchanging, a major U.K.-based HRO provider, is partnering with U.K’s RPO vendor Alexander Mann Solutions (AMS), to enter new markets with complementary services.

•  AMS is also the partner of choice for The RightThing, an American RPO provider looking to expand international coverage for its multi-national clients.

How confident are you in your plans for new growth?

I have spoken to one vendor who is specifically targeting the small and mid-market, and another who is looking for the single service entry point, with plans to expand to multi-process over time.

Is your vision and value proposition crystal clear?

Being all things to all people turned into a Mid-Summer’s nightmare for many early entrants in the large market enterprise play space. We have all seen the changes in direction for Hewitt, Fidelity and most recently ExcellerateHRO, to focus on areas in which they have the greatest strengths.  

Those providers which have positioned themselves for changed buyer expectations in the new competitive post-downturn environment, and those that can show a cost-effective plan for HR buyers to get back on the path of strategic HR transformation will benefit from the their sweat equity as the frozen corporate decision-making begins to thaw. Are you sweating yet?

Linda Merritt, Research Director, HRO, NelsonHall

BPO Platforms – a Springboard or a Swan Dive?

August 18, 2009

Last week I attended Infosys BPO’s analyst day and BPO conference in Baltimore, Maryland, overlooking the beautiful Inner Harbor. Platform BPO was one of the big topics, and one of Infosys BPO’s big bets for new avenues of growth. 

Platform BPO is the service delivery model whereby end-to-end processes are offered as managed services on a standardized business platform based on an ERP solution that is hosted, managed and maintained by the BPO provider. Platform as a Service (PaaS) providers bundle operations, integrating management of an end-to-end process with their technology suite and staff. Designed to be configured instead of customized, platform BPO will accelerate mid-market BPO adoption with its lower cost of entry, scalable services, variable pricing and ease and speed of transitions.

Platform BPO service providers will continue to build out their global service delivery footprint with service centers and partnerships, taking advantage of locations with low cost labor and access to skilled talent. These true multi-tenant service platforms will renew the promise of economies of scale the earlier generations of customized client-specialized services did not deliver. It’s an enticing value proposition designed for today’s capital constrained and challenge and change fatigued buyers. If the adoption rate is good, it will be a more economical infrastructure for vendors which can provide a springboard for profitability.

The timing is right. Clients are asking about and for solutions they would have rejected pre-downturn. The advent of new technologies like Service Oriented Architecture (SOA) and the openness of ERP providers like SAP and Oracle to work with service providers are enablers supporting the degree of needed integration.

There will be challenges, especially for the provider community. In return for moving to a configurable platform, the buyer gets to pass some risk and increased expectations over to the service provider. The provider becomes responsible for managing and integrating specified processes, applications and technology, including the investment in development and upgrades, and the selection, management and fit of any third-party applications and delivery partners. Also, accepting accountability for the increased complexity of integrated IT and operations requires a greater level of skilled staff capabilities and coordination across the expanded value chain. 

Hmm…not hearing any HRO platform BPO cannonball splashes yet? It’s a big leap for HR to make and platform BPO is not expected to fit everyone. Yet it is a viable option for many in the mid-market and even some in the large market. PaaS for HR will be especially appealing to those with openness to new solutions, positive experiences with hosted services and point solution SaaS providers, and those pushed by economic realities.

Single service platforms are not new; think payroll or benefits administration as managed services platforms. What is new is the possibility of multi-client and multi-process HRO on a platform that delivers globally for buyers and providers.

There are already some buyer toes in the water. Infosys reports it has several clients up and running on its new Hire-to-Retire HRO business platform which includes talent acquisition, development, retention and management services. At the conference I spoke with an attendee from a borderline mid-market to large-sized company who was thinking about replacing several current separate HRO provider services and wanted to learn more about the new Infosys HRO offering.

Overall, PaaS sounds great and the water is warm, so jump on in! Not ready? Then watch the pool of platform-based services and providers expand, learn about the challenges and successes, and get ready to test the waters.

Linda Merritt, Research Director, HRO, NelsonHall

Will Multi-Process HRO Survive, or Will the Baby Be Thrown Out With the Bath Water?

July 20, 2009

The large multi-process HRO (MPHRO) deals born in the last 10 years or so brought HRO to a new level of awareness and created something of a cottage industry to support it before anyone in the equation really knew what it was and what it could really do. The first few service providers and buyers begat advisors to guide buyers, lawyers to write deals, analysts to research and comment on the emerging market, and HR-specific and more mainstream media to cover the phenomenon. Dedicated magazines and professional associations like HRO Today, HRO Europe and the HR Outsourcing Association quickly formed, and conference promoters and general HR consultancies swarmed.

It all looked so much like fun at first. One-stop HR shopping with almost every HR services you could name from one end-to-end provider, wow! (One hand to shake, or one throat to choke, take your pick. And yes, newbies, that language was actually used.) Anchor client HR operations lifted and shifted with rebadged employees, and systems and processes moved to the new providers with plans to become the foundation for multi-client services. Marketing promos promising 20, 30 and even 40 percent or more in savings were pitched by sales teams to HR and C-suite executives. HR RFPs were big and vendor responses were bold. Vendor and buyer due diligence assessments? Not so much. Either parties tests for customer readiness? Non-existent. 

What Went Wrong – The Short Story

Then we all found out it was much harder than it looked. Take just two elements out of a very complex market dynamic. Transitions were longer, more complex and costly than embedded in the deal structures – something that would come back and haunt both service providers and buyers in the coming years. Transforming anchor clients or pre-existing technology platforms and processes into global multi-client capabilities with room for buyer discounts and customer satisfaction, while still leaving a reasonable profit margin, also turned out to be more problematic than anticipated.

In the meantime, the single process HRO field did not intend to be displaced or subsumed behind MPHRO vendors. Some joined the fray as new MPHRO vendors. Others dug in to defend, expand and promote their HR specialty point solution services in areas including benefits, payroll and learning. Today there are more standalone HRO options than ever. The struggles in MPHRO with some high-value, but complex, services even likely fueled the growth and expansion of services like RPO.

Will Multi-Process HRO Survive?

Yes, MPHRO is changing, but it is not about to go away any time soon. Granted a few deals did not survive, and some others have been less than 100 percent successful for either buyers or providers. Still, this a multi-billion dollar market segment with millions of employees served worldwide. MPHRO works for most buyers across many service lines, and many major contracts have already been updated, extended or renewed, although with little of the early fanfare.

Shakeouts are to be expected in any new market, perhaps even more so in a down economy.  Some are playing in the field of mergers and acquisitions, like ExcellerateHRO going to HP. Others, such as Hewitt and Fidelity, are choosing to refocus on core services. However, most of the major HRO providers like Accenture, Convergys and IBM are staying the course, and there are even still new entrants, including offshore providers such as Infosys and Wipro, ensuring the MPHRO marketplace will exist, continue to evolve and provide buyers with a wide range of competitive options.

A topical article in the June 2009 of HRO Today entitled, “In today’s changing market, who has the advantage: End-to end or point solution? Industry experts weigh in,” also sees room for both MPHRO and point solution options.

But exactly how is MPHRO changing and adapting today, and how does it plan to compete tomorrow? It is time to find out. My first major NelsonHall Market Analysis study, planned to be published in October, will be on MPHRO. The results will be very telling!

Linda Merritt, Research Director, HRO, NelsonHall

Infosys, Wipro, TCS and other Offshore Providers: How Strong an HRO Play Can They Make?

July 13, 2009

Against the backdrop of Infosys’ most recent quarter-end financials announcement – of which 6.1 percent of revenue was attributed to BPO, and five to 10 percent of that BPO revenue is estimated to have come from HRO – how viable can it and its Indian brethren be in the HRO space? Despite inherent challenges and both real and perceived buyer concerns about offshoring HR processes, offshore providers are making strong investments in and “upping the ante” of their HRO capabilities.

For example, Infosys within the last several months launched a new SaaS plus BPO platform offering which supports HR processes. And other Indian providers such as Wipro, Caliber Point, Secova, Modis and TCS are partnering, primarily with Oracle and SAP, for a technological BPO backbone which supports HRO processes, and then building more standardized BPO services around that technology.

Further, to address language and cultural barrier concerns of many buyers, India-based offshore providers are understandably touting their centers in locations such as Romania and Poland as HRO delivery sites.

Finally, price points are clearly lower in India and other low-cost locations such as the Philippines in which offshore providers have centers. In today’s economy, given that providers such as Hewitt and Convergys have been challenged to meet the cost-cutting requirements of their existing clients without themselves utilizing offshore resources, there are clearly some natural opportunities for offshore providers.

But the operative word above is “some” natural opportunities. Remember, there are many concrete and ostensible inhibitors to offshore HRO. So where are offshore providers making, and can they make, their play?

At least for the relative near-term, it’s in the low-cost transactional services and low- and mid-level analytics processes. For example:

•  In recruitment process outsourcing (RPO), CV/resume screening and, in some cases, candidate short-listing. But beyond these initial activities, most will require onshore hand-off

•  In learning business process outsourcing (LBPO), managing course scheduling and learner assistance around which courses are suitable, etc. But with language, cultural and proximity issues, the possibility of venue management, course development and learning delivery is null to void

•  In back-office processes, those which are non-voice-related, such as payroll reconciliations, accounting within pensions arrangements, fulfillment, etc., in benefits administration

•  In HRO analytics, low-end processes such as monthly and quarterly reporting on employees per business unit, geography or employee population diversity; cost per hire; hiring manager satisfaction; learner satisfaction and utilization rates for decision support tools. Mid-level analytics provided by offshore providers could include loyalty and attrition modeling

•  And of course the IT support around all of these HR processes

The bottom line is that offshore providers are viable contenders in the HRO space, but we believe buyers are still cautious about fully embracing offshore outsourcing, so are likely to engage only in the non-high-touch areas. If a buyer is seeking lower cost, transactional services, offshore HRO is certainly worth examining.

Helen Neale, Research Director, Human Resources Outsourcing, NelsonHall