“The American” is Not an American HRO Story

This weekend I saw the George Clooney movie, “The American.” I was not too sure what it was about, but then, it starred George Clooney. Title aside, I knew within the first few minutes it was not an American movie, or an American story. It takes more than speaking in English to tell an American story, and to provide culturally compatible HRO employee care call center support.

It is not that the movie was poorly made or the story poorly told, it just was not American. Nor was it an action movie. It was moody and slow, seemed to start in the middle and then little happened, little was said, and even less was explained. And the end, well, the less said the better. 

The experience reminded me of another movie, “The Devil’s Own,” with Brad Pitt and Harrison Ford (1997.) Brad Pitt is in the U.S. and brings his Irish “troubles” with him. He tells Ford, “Don’t look for a happy ending. It’s not an American story. It’s an Irish one.” Once again, same language, but with different cultural expectations.

For a movie that is quintessentially American, see the original “The Karate Kid,” (1984) starring Ralph Macchio and Pat Morita. For many years it has been a shared cultural referent; “wax on, wax off.” Movies, television and music are great sources of cultural touch points for any modern culture, and especially so for Americans. By the way, The Karate Kid also reflects the American cultural imprint for quality, which is a bit different from the Japanese or Australian imprints. (Seriously, there were studies.)

All of this is not to say that HRO employee care cannot be provided from outside of any one country to another. HRO care can, and is, being provided from a growing list of locations around the globe. Still, most voice-based employee support remains onshore, followed by nearshore delivery. Cultural understanding is one of many elements that impacts successful call center support. It is less important for basic transactional questions and answers. But as the service moves more into consultative areas that require interpretation, tone and manner become just about as important as important as technically correct answers.

I look forward to seeing how live chat will impact multi-shored employee care support. With chat, the use of pre-scripted stock phrases will not be judged on tone and manner, and chat is expected to be more focused on direct and brief exchanges.

HRO buyers and providers, help build the cultural bridge for farshore employee care center staff.  One simple example; share information on major current events, holidays and client-specific business news. And remember, during times of great stress and uncertainty voice calls will increase, even when other modes would be more efficient. No matter the country, company or culture, we all need and want helpful and understanding human contact.

Linda Merritt, Research Director, HRO, NelsonHall

The Places We Will Go to Grow HRO

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

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

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