Posted tagged ‘Kenexa’

SaaS versus BPO

March 14, 2013
Linda Merritt, HRO Research Analyst, NelsonHall

Linda Merritt, HRO Research Analyst, NelsonHall

The HR Outsourcing Association (HROA) just completed a series of webinars on SaaS and HR BPO. There was a wide range of HROA industry experts bringing their real world experience on each panel including Accenture, ADP, Aon Hewitt, Futurestep, IBM, ISG, NorthgateArinso, Oracle/Taleo, and more.

SaaS or BPO is Not the Question

The conversation was largely about the difference between SaaS and the ERP systems included in most current BPO deals. It was not about using only SaaS or only BPO. SaaS can and does fit into BPO. I expect to see lots of growth in SaaS and BPO combinations in the next few years as SaaS platforms scale and grow in handling complexity.

SaaS is a Success Story of Innovation

The rise of SaaS was also fueled by the recessionary pressure to lower HR costs. Pre-downturn, HR leaders strongly preferred the customization power of ERPs to conform to a client’s policies and processes. Now the acceptance of the speed and economic advantage of configuration and standardized processes makes SaaS a viable option for an increasing array of HR services and even HR management system infrastructure (HRMS).

BPO service providers are also prime sources of many SaaS applications:

  • SAP and Oracle offer cloud HRMS used as the core for most HRO platforms such as: Genpact Hosted HRMS Platform, Infosys TalentEdge, CGI Oracle HCM, Caliber Point Republic, TCS HR platform
  • Proprietary systems include: ADP Vantage HCM and Workforce Now, NorthgateArinso ResourceLink Aurora, Preceda, and MoorepayHR, Ceridian DayForce and HRevolution
  • Talent management applications including RPO services have been so popular that Oracle snapped up Taleo, IBM acquired Kenexa, and SAP bought SuccessFactors.

Selection and Implementation Commonalities

The buyer experience has common elements whether selecting SaaS or BPO.

  • The upfront client planning process is the same: identify goals and objectives aligned with business and HR strategies; gather cost, process, and performance data to build a business case; consider enterprise risk; etc.
  • Vendor selection: do not just select the service; ensure there is a proven record of vendor performance and solid evidence of collaborative client relationships.

SaaS is not Self-Installing

While the total time and effort may be less, all the traditional elements remain. Webinar panelists warned that even if the decision has been made to use SaaS, do not underestimate the time and effort to make a vendor selection, manage change, gain buy-in, and project management implementation.

Even though one of the advantages of SaaS solutions is faster and “easier” implementations, it will still take buyers time and effort to standardize processes and data and to determine the configurations. Make sure that as a buyer, you know and plan for the skill and effort needed. Like BPO, experience says to consider a phased in rollout starting with one service / process and bring the learning forward to the rest of the implementation.

Next time, we will explore to SaaS or not to SaaS.

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Can HRO be Social, Smart, Quick, and Effective?

February 1, 2013
Linda Merritt, HRO Research Analyst, NelsonHall

Linda Merritt, HRO Research Analyst, NelsonHall

Smarter Workforce and Smarter Commerce are the two major themes of this year’s conference for customers and business partners at IBM Connect 2013.

IBM is Messaging, Managing, and Delivering

First, I want to complement IBM on the clarity and alignment of its strategy with action. I have not seen this level of aligned organization and action across such a large and complex corporation before.

Building out under the Smarter Planet umbrella, IBM is bundling its many products and services, coordinating internal research and development, making targeted acquisitions, working across product and organization lines, and communicating clearly in its go-to-market campaigns. Given the great number of successful Smarter Workforce client case studies being presented, the proof points are already building to show business value can be delivered.

Smarter Workforce Supports Smarter Commerce

Smarter Workforce and Smarter Commerce are each separate service lines that can be coordinated to achieve greater business impact. Each is a combination of the IBM Platform for Social Business (social networking, social analytics, and social content) bundled with other new and existing products and services. Under the hood is a myriad of product lines making it work operationally, all tied together by messaging:

  • Smarter Workforce: Activate the workforce to improve productivity and unleash innovation
  • Smarter Commerce: Delight customers to increase loyalty, advocacy, and revenue.

Balance Individual Focus with Collective Value

Jonathon Ferrar, IBM vice president of Smarter Workforce, talked about the need to be social, smart, quick, and effective. Other words that were used a lot included community and relationships. Connecting communities of practice and building relationships, not for social intimacy, but for learning, leveraging, and leading to delighted customers and achieve business success.

Embedded throughout the social aspects of the services is a focus on the individual user that takes into account ease of use, mobile device access, points of need, and other behavioral aspects that are built in to increase collective business value creation.

Kenexa is Key to Smarter Workforce

The Kenexa acquisition closed in December 2012 and it is already being integrated into current offerings and it will be a key to plans for enhanced Smarter Workforce services as early as the second half of 2013:

  • Kenexa’s software platforms for recruiting and learning will be used for RPO and learning BPO services as well as integrated with the social business platform
  • Kenexa’s behavioral science expertise will be used to inform leadership, organizational, and talent management services and add to the analytics component.

IBM’s HRO services will be impacted by the changes. New options will be available to existing and new clients as talent management, learning, and RPO are brought together.

A lot of complexity remains to be managed, but it would be great to see IBM set a new high bar for making its services, client workforces, and HRO social, smart, quick, and effective!

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Kenexa’s Analyst Day and 7th World Conference – A Winner: Part 2

October 24, 2012

Gary Bragar, HRO Research Director, NelsonHall

For the last couple of years, Kenexa has been rapidly growing its RPO client base globally and 2012 has been no exception.

Recent RPO wins include BOSCH, FMC, and BT, all of which have been multi-country awards. It also has two additional RPO contracts pending. Reasons cited by the clients for selecting Kenexa for the new contracts include:

  • Quality of hire
  • RPO experience including engineering and technical recruiting
  • Cultural fit with Kenexa
  • Global capability
  • Flexibility of solution design.

Further information on the pending contracts will be released soon on NelsonHall’s website.

The customer panel at the analyst event included United Healthcare (UHC), AMD, and Fluor.

AMD:

  • Issue: AMD’s global salesforce and internal formal training were not meeting its needs.
  • Solution: Kenexa implemented its social LMS, which helped employees gain access to experts quickly.
  • Result: AMD went from 39 separate websites of products and training to one LMS with Kenexa that is hosted to eliminate IT and technical issues.

UHC:

  • Issue: UHC had a decentralized team, poor technology, low hiring manager satisfaction, and other metrics did not exist. It was hiring ~11,000 employees per year and wanted to standardize services and deploy a consistent system, starting with non-exempt hiring for a call center and extending into some exempt level recruitment.
  • Solution: Kenexa is using a hybrid delivery model of service center and onsite employees. Monthly and quarterly business reviews are conducted that include reviewing metrics such as on-time delivery within 26 days, acceptance rates, class fill rates, and candidate and hiring manager satisfaction.
  • Result: UHC is expanding the contract from the U.S. to include Europe (U.K., Ireland) and APAC (Philippines).

Other developments at Kenexa include:

  • A new RPO COE in Raleigh, NC (others are in Shanghai, Dubai, Buenos Aires, Krakow, Vizag (India), and Frisco (TX))
  • Fit Compass, which includes an interview guide that the hiring manager receives with custom questions tailored to each candidate based on the outcomes of the Fit Compass Assessment and an onboarding tool, Personal Fit Planner, to ease the transition from candidate to employee. It can also be used for development, career planning, and team building.

With each RPO engagement, Kenexa begins with an analysis of the client’s culture; it then trains its recruiters on educating the candidates and what it’s like to work for the employer. Some clients also include additional services. For example, Whirlpool’s contract also included a career site, social media, employment branding, and marketing.

At the Kenexa World Conference on October 17th, I attended two sessions:

  • Improving Quality of Hire at the Entry Level: A Strategic Application of Assessment, by Home Depot: Home Depot screens hundreds of thousands of candidates each year for hourly in-store positions and needed a more strategic method. It implemented Kenexa’s large library of assessments and Kenexa’s 2x BrassRing to improve the quality of hire and efficiency.
  • RPO 2.0: Creating the Hybrid Model, by PAREXEL: PAREXEL’s original five year contract with Kenexa was to end in 2011, but it renewed and implemented a hybrid model. Kenexa’s services include sourcing, screening, and candidate interview management; PAREXEL retained strategy, candidate relationship, job offers, and reference checks. The two companies work effectively side-by-side meeting with hiring managers to understand their needs; outsourcing is transparent to the client and SLAs have mutual accountability.

In sum, it was a fulfilling analyst day and World Conference. I look forward to the next IBM Kenexa Analyst Day, which will include a smarter workforce track.

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HR Tech Another Success: Part 2

October 17, 2012

Gary Bragar, HRO Research Director, NelsonHall

In my blog earlier this week, I wrote about highlights from the new Outsourcing Track at HR Tech as well as the RPO meetings I attended. In related news, my fourth global RPO market analysis report was published on Monday.

In addition to walking through the exhibit hall and attending technology demonstrations, my additional meetings at HR Tech included:

  • Patersons: Its 2012 revenue growth is 70% YTD, driven by multi-country payroll. Safeguard World International has also reported similar success due to high growth for multi-country payroll services according to a business update two weeks ago.
  • IBM: The company is experiencing increased demand for its RPO and learning services and many of its key learning clients have renewed in 2012. New learning contracts include one in South Africa and pipeline activity includes a large global bank. The Kenexa acquisition will bring in new RPO and talent management opportunities that IBM will enhance with its social and analytics capabilities.
  • Hogan Assessments and SHL Assessments: Both companies provide personality assessments to predict work performance. SHL has also issued a talent management report with key findings showing that Eastern Europe ranks 1st in supplying IT and essential business skills; the U.S. ranks 23rd.
  • Secova: The benefits administration provider offers online enrollment, a 24/7 call center, eligibility verification, billing management, and leave management services that are delivered from their ISO/IEC 27001:2005 certified platforms. Services are provided from California, New Jersey, and Chennai.
  • Equifax Workforce Solutions: This was formerly operating as TALX, which rebranded as a result of its increased emphasis on the provision of workforce analytics and business intelligence to help clients improve their company’s performance.
  • HireVue: Offers a Digital Interview Platform that saves time, travel, and costs by allowing clients to create online interview guides with scientifically proven questions. Candidates then record answers via a webcam, which recruiting and hiring managers then view on demand, including from smart phones, to build digital talent pools.
  • JobVite: Provides a modular SaaS-based recruiting platform for applicant tracking, recruiter CRM, and sourcing talent.

Highlights from ADP include having ~30,000 clients for its cloud-based HCM platforms including:

  • ADP Workforce Now: Launched in October 2009, it supports clients with 50 – 1,000 employees. The majority of its 20k+ clients purchase the broader HCM suite.
  • ADP Vantage HCM:Piloted in October 2011 with general availability launched in June 2012, this platform, which targets employers with >1,000 employees, already has >30 clients. ADP has been adding ~5 – 6 new clients a month with a high percentage buying talent management, benefits (H&W), and time & attendance in addition to payroll. New wins include:
    • A national restaurant chain with ~24,000 employees
    • An employee healthcare staffing company with 15,000 employees
    • A retail chain with 4,500 employees.
  • ADP GlobalView: It now includes ADP Talent Management globally and has won several major clients including an electronics manufacturer with 85,000 employees in 29 countries including the Americas, EMEA, and APAC, which recently added the compensation module.
  • ADP Talent Management: It provides recruiting, performance, learning, compensation, and succession in 14 languages and 80 currencies for ~4,000 clients.
  • ADP Mobile Solutions: Deployed globally and offered in 12 languages, the app has ~30,000 clients and ~450,000 users.

See you all next year at HR Tech in Las Vegas October 7 – 9, 2013.

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HR Tech Another Success: Part I

October 16, 2012

Gary Bragar, HRO Research Director, NelsonHall

HR Tech was again a very worthwhile investment of my time. Here are some highlights of the new Outsourcing Track presentations I attended:

  • Cisco Uses RPO to Help Hire Up to 15,000 a Year:Using a hybrid co-ownership model, the Randstad Sourceright recruitment team works alongside the Cisco recruitment team to provide services including sourcing, recruiting, and onboarding. Services provided are primarily in the Americas, but may expand into EMEA and possibly Asia where Randstad Sourceright has a presence. Using the hybrid model, Cisco has been able to cut its $120m talent acquisition spend in half.
    • Mark Hamberlin, VP HR Global Staffing, Cisco
    • Rebecca Callahan, President RPO, Randstad Sourceright
  • Ericsson Outsources Global Payroll in Manila:Ericsson issued a RFI to 25 vendors, then created a short-list of 5, and ultimately selected Talent2. Managed payroll services provided by Talent2 for Ericsson in Southeast Asia and Oceania include 4,500 employees in 12 countries, which prior to outsourcing had 12 different payroll processes. Manila is the shared service center. Major benefits obtained by Ericsson thus far include: reduced risk management, minimized complexity of dealing with local tax laws, and ease of expanding into new countries.
    • Mark Howes, HR Director Asia Pacific, Ericsson
    • Mary Sue Rogers, Global Managing Director, HR Managed Services, Talent2
  • Whirlpool Leverages RPO to Transform Talent Acquisition:Pre-RPO recruitment was decentralized and lacked consistency and methodology in its sourcing approach. Business partners were also spending a lot of time doing transactional work including screening and reviewing resumes. Kenexa’s RPO services include: sourcing, screening, administration, candidate management, creation of employment value proposition, and management of the candidate experience primarily in North America with some testing in Europe. KPI’s include: time to fill, quality of the candidate slate, diversity slate, and end-user satisfaction.
    • Lynanne Kunkel, VP of HR, Whirlpool North America
    • Rudy Karsan, CEO, Kenexa

Here are highlights from my RPO meetings:

  • Pinstripe and Ochre House: Pinstripe has won 12 new RPO contracts YTD and its partner Ochre House continues to win new contracts in EMEA including North Africa and the Middle East as a result of its acquisitions of TAAHEED and Carmichael Fisher in early 2012.
  • ManpowerGroup Solutions: New contract wins YTD include 40+ RPO deals globally in 20 countries. It has also expanded existing clients into new geographies including a U.S.-headquartered firm that expanded into China and Southeast Asia and a Spanish-headquartered firm that expanded throughout Europe and Latin America.
  • Randstad Sourceright: Currently with ~100 RPO clients, it won 18 new contracts YTD. Four of its new wins are global deals as a result of the merger of Randstad and SFN Group, which was completed in September 2011. Its fastest growth has been in the mid-market.
  • The RightThing, an ADP Company: Total RPO client count is at 80+. YTD wins include several enterprise and mid-market clients with ~50% as new clients and ~50% as existing ADP clients that added RPO services.
  • WilsonHCG: Primarily serving large and mid-size clients, WilsonHCG also has small clients with <500 employees. The company has a 94% satisfaction rating with candidates and hiring managers across clients.

Stay tuned for my next blog where I will discuss additional meetings I had with Patersons, IBM, Hogan Assessments, SHL Assessments, Secova, ADP, Equifax Workforce Solutions, HireVue, and JobVite.

In the meantime, NelsonHall just published its fourth global RPO market analysis.

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The Trajectory of Change for HR and HRO

September 28, 2012

Linda Merritt, HRO Research Analyst, NelsonHall

The 15th Annual PwC Global CEO Survey of 1,258 CEOs in 60 countries shows what CEOs want now from HR that transcends country and industry. PwC summed it up as:

  1. Protect the home market from uncertainty
  2. Attack new and emerging markets for growth.

Hockey legend Wayne Gretsky said that he skated to where the puck would be, not to where it was, anticipating the trajectory of change. This is hard for HR, which often takes years to complete a major change and looks to HRO with a focus on price and improving operational efficiency. Skating to where we needed to be yesterday is hard enough; how do we skate to where we need to be tomorrow?

CEOs Top Concern: Talent

For the last two years, the number one concern of CEOs in the PwC survey is talent. CEOs are personally concerned with developing leaders and the talent pipeline. Why? Because CEOs see that talent constraints and mismatches are already limiting opportunities. CEO talent concerns include:

  1. Talent-related expenses rising more than expected
  2. Not being able to innovate effectively
  3. Not being able to pursue a market opportunity
  4. Cancelling or delaying key strategic initiatives
  5. Not achieving growth forecasts in overseas markets.

Talent Gaps

Availability of key skills is a concern in every market outside of North America, especially for the Middle East, Africa, and Latin America. This matches well with the drive to increase the global coverage of RPO.

Talent gaps are greater in some areas. In addition to global talent concerns, it is harder for some industries such as technology and pharmaceuticals / life sciences to find needed skilled talent. Of heightened concern is middle management talent. Will RPO best fit at the level of volume and skilled talent hires? Or will RPO further encroach into middle management recruiting?

The future is also about talent management and proof of HR’s business impact. This supports the movement we are seeing to strengthen talent management (TM) capabilities through M&A. Examples include:

  • SAP and SuccessFactors
  • Oracle and Taleo
  • IBM and Kenexa.

CEOs Want Proof

Proof of business impact is part of HR metrics and advanced analytics. Even what should be the basics in workforce information is not considered comprehensive enough by most CEOs; they would like more data including the return on human capital investments, the cost of turnover, and staff productivity. HRO is ready with HR analytics as one of the newest components of HRO offerings.

Today, most HRO remains pressured on price rather than on value delivered. In hockey, someone must put the puck into play. In HR and HRO, someone must pay to develop the capabilities CEOs say they want. In the meantime, HRO is doing a good job of getting ready to skate to where business needs are going.

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