Posted tagged ‘recruitment process outsourcing’

Kenexa and Aon Hewitt New Product Offerings Help Clients Hire, Engage, and Retain Talent

June 18, 2012

By Gary Bragar, HRO Research Director, NelsonHall

Kenexa’s RPO business has been growing, including globally as evidenced by its five year RPO contract with Eli Lilly to provide services in Asia Pacific, Europe, and the Americas.

Kenexa has been expanding its business with new service offerings including those focused on talent management. Two new product offerings that help clients hire, engage, and retain talent include:

  • Fit Compass
  • Career Bull’s Eye.

Kenexa calls these offerings Performance Accelerators.

Fit Compass: helps clients determine the quality of the hire by providing managers with an interview guide to help probe for candidate strengths, work styles, and challenges of how they would fit into the culture of the organization. Fit Compass can also be used for employee development and career planning, team building, and team effectiveness.

Career Bull’s Eye: determines an employee’s level of engagement by assessing their purpose, passion and pay. It then helps business leaders identify where in the organization they need to focus by finding out causes of disengagement so it can make improvements and reduce turnover. It can also be used when onboarding new hires to ensure that they are engaged to avoid turnover. Results are shared during quarterly business reviews with the client. Both products are available as standalone services or can be bundled with other RPO service offerings.

Aon Hewitt provides RPO as both a part of its HR BPO offering and as a standalone service. Aon Hewitt’s RPO business has been growing globally as well. Examples include its HR BPO contract with BP where it provides RPO in North America and EMEA, and its recent contract award with a professional services company to provide RPO as a standalone service in EMEA and North America. Aon Hewitt has two new products that help organizations transform their hiring process:

  • SourceSprint
  • Digital interviewing capabilities.

SourceSprint: keeps applicants in a talent community for possible placement with other opportunities. Often when an organization fills a job requisition, other applicants are lost after the new hire comes on board. While the applicants may not have gotten the job they applied for, they may be good candidates for other opportunities. But, finding them again is problematic. SourceSprint changes that by using social media, optimization of search engines, and mobile communications to keep these prospects in a talent community. It remembers how applicants were originally found and their preferred communication.

Digital interviewing capabilities: improves the efficiency and experience of the hiring process for both candidates and hiring managers. Through its partnership with HireVue, Aon Hewitt clients can use the HireVue Digital Interview Platform to ask candidates scientifically validated questions that will ensure consistency and objectivity across interviews. Candidates then use a webcam to record their answers. Since it is not a live interview, candidates can respond from anywhere at their convenience, and hiring managers can watch and share the recorded interviews with colleagues anywhere.

Given these types of continuous innovative offerings, it’s no surprise to me that RPO has been rapidly growing as clients seek to attract, engage, and retain talent, while improving the efficiency of the recruitment process at the same time!

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Employment Branding: Business, Culture, and HRO

May 25, 2012

Yesterday, I participated in a very lively online Twitter discussion about employment branding. Branding is a common topic for businesses, particularly for corporate, product, and service identities. Employment branding is important to ensure the attraction and retention of employees that can deliver the business brand experience. Meghan M. Biro’s brand humanization concept is that it is all connected: the business brand, its culture, and its ability to attract and retain talent. That connectivity is a business opportunity for HRO, think RPO and employment branding services, and it is also an issue for HRO service providers as employers.

In an earlier blog this year, I concluded that HRO will not hinder and may even help clients achieve human capital leadership, using leadership and best place to work awards as evidence. Diversity award lists from DiversityInc.com and Diversity MBA magazine have just come out for 2012 and again we see recognition of HRO service providers including Accenture, ADP, and IBM, as well as many companies that use HRO. Here are examples from the world of RPO:

  • Alexander Mann Solutions: Citi and Deloitte
  • Futurestep: General Mills and Kaiser Permanente
  • KellyOCG: GE
  • Kenexa: Verizon and U.S. Navy
  • ManpowerGroup Solutions: Wells Fargo
  • Randstad SourceRight: AT&T and Capital One
  • The RightThing, an ADP Company: Kellogg and WellPoint.

As part of my long running theme on talent management, I believe strongly that HRO vendors can and should be leaders in creating the agile workforces of the future. Part of being a leader is practicing what you preach, which is largely what corporate and employment branding is about.

In HRO service providers often need to scale up and scale down quickly, while still ensuring a full slate of experienced subject matter experts. On top of that, many HRO service providers base client care centers and processing centers in talent competitive markets, which often stimulates high turnover and brings together workforces from very different cultures. This is the second challenge of employment branding for HRO, as employers, each service provide needs to build a differentiated employment brand and corporate culture to attract and retain the talent needed to fulfill its business brand.

Part of developing an employment brand is determining what attributes make a particular employer a good place to work and developing programs to ensure those elements are in the workplace and recognized by current and prospective employees and are aligned with business outcomes. Sounds simple, but it surely isn’t.

Buyers, ask your HRO service providers about their workforce practices to see if they practice what they sell. Service providers, in addition to client testimonials, engage and leverage your own employees as brand ambassadors.

Linda Merritt, HRO Research Analyst, NelsonHall

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Social Media in HRO Needs to be NICE

March 23, 2012

To work my way into the topic of social media, I am going to start outside of HRO. IBM recently launched a Social Media Boot Camp for its small- and mid-market business partners and clients.

The social media boot camp is globally available for qualified candidates, including those from emerging markets such as China, Australia, and Saudi Arabia. It is designed to develop the skills and ideas that will enable participants to sharpen their social networking capabilities and build stronger and more interactive ties with their clients. The online course includes an eight-week session with live coaching. It is produced in conjunction with Profitecture and is available for up to 75 participants each quarter. The Q2 2012 classes are already full, and enrollment has started for Q3 2012.

The IBM-led conversation on social media provides a broader view in using new media channels. According to Ed Abrams, IBM vice president of mid-market marketing and strategy, “…remember that social media is all about conversation. You don’t want to use this forum for press releases, or collateral- type materials. You need to remember that social media is very much like a face-to-face conversation. People want to engage, they want the chance to participate.”

Starfire Technologies is one of the early business partners to complete the boot camp. Mary Spurlock, Starfire’s Vice President of Marketing, says that social media is a 2-way street and that while it is important to publish, share, and deliver value when using social media, it is also important to listen, read, and follow what your customers are doing with social media.

There are very practical aspects as well. In RPO it is already critical for a service provider to be on the leading edge of leveraging the latest social media trends, functionalities, and tools. For now, let’s stay with the broader view.

The use of social media in HRO needs to be NICE.

  • New: Use social channels to offer something of unique value. Don’t simply repeat the same content offered elsewhere, and keep it fresh—update, update, update! Offer something unique (or at least a unique take) in the content.
  • Interactive: Offer multiple ways and levels of interaction. Providing a “comments” section is not even table stakes today. People know how to find your corporate website. If they are on Facebook, they are looking for new ways to connect with you. Be creative.
  • Connective: Take advantage of the opportunity to interact with the intended audience to continue, extend, and expand the conversations and weave connections across multiple channels into a whole. Each media channel should have a specialized point, purpose, and voice.
  • Engaging: Social media provides a unique opportunity to bring your brand attributes to life in ways that create enriched longer-lasting relationships. Here, “engagement” does not mean “interactive”; it means being invested in a mutually beneficial relationship.

How NICE is your use of social media?

Linda Merritt, Research Analyst, HRO, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

Oracle Buying Taleo: Is It a Good Deal?

February 20, 2012

As Howie Mandel always says to his guests after they’ve pressed the button and say “Deal!” on the TV show Deal or No Deal—”but was it a good deal?” Time will of course tell, but I do believe Oracle has made a very good deal. As the acquisition was announced just last February 9, I’ll briefly recap what had happened.

Oracle announced an agreement to buy Taleo for $46 per share, an 18% premium over Taleo’s stock price the day before the announcement, equating to $1.9 billion. As Taleo’s board has approved the acquisition, it is now subject to normal regulatory approval and is expected to close by summer. This follows SAP’s announcement on December 3, 2011 to acquire SuccessFactors for $3.4 billion. I had blogged about my take on the acquisition last December 13, 2011, stating that SuccessFactors is a provider of talent management software, but software alone does not get at the core of what makes for effective talent management. First, let me state that I also feel that SAP buying SuccessFactors was a good deal, albeit a steep price, as cloud-based software, including talent management is clearly on the rise and expected to continue to grow. NelsonHall has seen a large increase in the number of cloud SaaS HR services contracts and nearly 15% of HRO contracts in 2011 also included talent management software, often performance management, mostly in the mid-market.

Getting back to Oracle, Taleo provides cloud-based talent management software as well, so this is also a good deal, but how does that make this different? Because Taleo adds recruitment capability that Oracle did not have before. And although SuccessFactors provides recruitment software as does Taleo, Taleo also has an applicant tracking system that according to NelsonHall’s 2011 RPO report is the most widely used recruitment technology and applicant tracking system, utilized by approximately 80% of all RPO vendors for their clients, Oracle’s PeopleSoft had been in sixth place. The RPO report also noted that approximately 45% of all recruitment technology was platform-based. Taleo also has a business edition, popular in the mid-market for clients seeking a more standardized solution, used by vendors including Alexander Mann Solutions and Pinstripe. According to NelsonHall’s HRO forecast, RPO will have the highest growth of all HR services through the forecast period of 2015.

In summary, I think both acquisitions by SAP and Oracle are good; especially as clients continue to focus on talent management and recognize the need to have integrated technology and processes, most importantly supported by leadership that understand this. I’m in the final stages of my learning BPO research interviews and I‘m seeing a clear trend that learning vendors are now also providing talent management software and associated consulting services to their clients along with their learning services. I look forward to aggregating this data that I’ll present at the HRO Today Forum in Washington, DC on May 1st, titled State of the Learning BPO Marketplace, including the Emergence of Social Learning.

Gary Bragar, HRO Research Director, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

The Fertile Ground of HRO Innovation

February 9, 2012

Kelly Services’ recent announcement of its new Office of Innovation was fascinating as the company has long been a leader and innovator in the staffing services field. Go global, check. Provide MSP, check. Add RPO, check. Add consulting, check. Launch mobile access applications, check. Supply chain management, check. Its success shows in the results, with 2011 revenues totaling $5.6 billion, a 12% increase over 2010.

To find out more, I had a lively discussion with Kelly Services’ Senior Vice President and Chief Innovation Officer Rolf Kleiner. Basically, Kelly Services has already done so much that it is focusing on new solutions and capabilities to remain ahead of the competition and keep up with its many Fortune 500 clients.

According to Kleiner, the company has always done well with the “little I” incremental innovations that improve and enhance its current services and capabilities. Kelly Services is also looking for new “big I” innovations, those that can move the needle on results and set precedents within the company and in the marketplace. It was felt that by adding more visibility and vetting larger scale opportunities, the Office of Innovation will be able to identify, develop, and bring new innovations to market faster.

Kleiner plans to set up a “pull” process for ideas that includes many stakeholder groups including employees, clients, suppliers, and other industry experts. He likened the process to farming. It will take working with the communities of interest on an on-going collaborative basis to develop a harvest of ideas.

There were several items I found especially interesting. One is using this effort as an opportunity for talent management. Some proof of concept and development projects will be managed by the Office of Innovation and will provide highly visible opportunities for those assigned. When projects are managed outside of the normal lines of business, integration and communications will be maintained which brings reality to planning and brings market needs and innovation participation deep into the infrastructure and culture of Kelly Services.

Also, there is a very crisp vision for the strategic initiative and clear criteria for the kind of innovation opportunities that are being sought. There is solid alignment with the goals of the company, scale for sizing market opportunities, and an openness to solutions that could include internal developments, partnerships, supplier networks, etc.

Finally, the selection of Kleiner as head of the Office of Innovation is a strong indication of Kelly Services’ seriousness with this endeavor. He reports directly to the CEO and his previous assignment was as Senior Vice President and General Manager for the KellyOCG group, which provides consulting and outsourcing services. The pulse of the market, the voice of the customer, and the operational beat of the business are all fresh and fertile ground for Kleiner’s new challenge.

Our NelsonHall HRO team always advises clients to look for service providers that can meet today’s needs as well as offer partnership for meeting the needs of tomorrow. How is your HRO vendor focusing on the future?

Linda Merritt, Research Analyst, HRO, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

U.S. Jobs Grow – How Will It Impact HRO

February 7, 2012

By now, most have heard last Friday’s favorable jobs news.

In the U.S., 243,000 jobs were added in January, bringing the unemployment rate down to 8.3%, and as noted on one of the staffing provider’s earnings calls last week, down to 4.2% for college graduates. Government jobs have contracted as expected, while the private sector had the gains in the services industry, specifically in leisure, hospitality, education, healthcare, and retail, and in manufacturing, including construction.

Also last February 3, Randstad reported a five-point rise in its U.S. Employee Confidence Index.  The index measures the workers’ confidence in their personal employment situation and optimism in the economic environment. This is the biggest increase since the survey started seven years ago.

With good reason to be optimistic, many RPO providers are realizing the gains with increased hiring volumes by existing clients. Even before this welcome employment news, 2011 had been a good year for HRO. In RPO, many vendors achieved significant growth, including Kelly OCG, whose RPO revenue was up 40% year-over-year from 2010; Pinstripe was up 58% y-o-y with 21 new contracts and extensions; and for Q4, Kenexa reported an RPO growth of 54% y-o-y.

But the benefits go far beyond RPO. Increased hiring bodes well for providers of payroll, benefits, and learning as the number of employees they serve increases. For example, ADP, who already pays 1 of 6 U.S. employees, announced the number of employees on its U.S. client payroll increased by 2.8% in fiscal Q2 2012, for the period ending December 31, 2011. Benefits administration providers including Aon Hewitt, Fidelity, and Mercer reported numerous contract awards in 2011. In MPHRO, in North America, ADP won several new contracts, while IBM was awarded a large MPHRO contract with Air Canada and NorthgateArinso awarded a seven-year MPHRO renewal by Fifth Third Bank. In learning, vendors including Raytheon, Xerox, and Accenture won several contracts. There are more updates to follow on learning as NelsonHall is currently conducting a global learning BPO market analysis.

However, a few words of caution by ManpowerGroup were given last February 3 that demand is expected to continue to fluctuate and it would be prudent for employers to adopt flexible workforce models that include: full-time, contingent, and virtual-skilled workers to ensure productivity.

There are a few key implications here:

  • Providers who haven’t yet provided recruitment services that include RPO, MSP, and Contingent Workforce services would be prudent to evaluate doing so and/or consider partnering with a vendor that does
  • Given the ManpowerGroup statistic that 52% of U.S. companies are struggling to fill key jobs, focus on the development and retention of talent is more paramount than ever. Buy-side organizations should be continuously monitoring employee satisfaction, reviewing attrition rates, conducting exit interviews to find out why people leave, and developing action plans to improve organizational effectiveness. If buyers do not have this capability, they may want to consider a talent management vendor who can help them, which has become a key HRO vendor focus and for good reason!

Gary Bragar, HRO Research Director, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

HRO Gets Real in 2012

January 3, 2012

HRO is very much at the beneficence and the mercy of the economy. With slow expectations for recovery continuing into 2012, HRO vendors are moderating their expectations. As the threat of a double-dip recession slowly lessens in the U.S., concerns about the next presidential election increases and worries over the European economy remain high. With a mixed bag of economic indicators, the NelsonHall Confidence Index has lowered to 147 from a peak of 170 in Q1 2010, with unchanged expectations representing 100. Although the Confidence Index is slightly down, 147 is still positive for growth. It is the expectations for high growth over the next 12 months that have changed the most, dropping to 33% from 54% of surveyed vendors. Moderate growth expectations increased to 43%, up from 32% in the prior year quarter.

The anticipation of continued growth is based on the experience of 2011 contract growth and expansion in renewals and existing contracts, where service providers have seen the addition of geographies and new processes. At the same time, there has been no change in the perennial barriers of frozen decision making and unrealistic buyer expectations for pricing and savings.

A sign of the times is that payroll services (4.1 out of 5.0) replaced RPO as the strongest individual HR outsourcing service line in Q3 2011. Multi-process HR outsourcing (MPHRO) activity strengthened to 3.9.  This is great to see given that some organizations have been scared of adopting large-scale MPHRO services due to fears of the associated timescales and investments. Vendor MPHRO capability is once again maturing beyond employee administration and payroll services. Organizations are being asked to add in greater support for a wider range of HR functions; prompted by the strengthening need to achieve maximum cost savings in G&A functions as the economic situation threatens to worsen.

Expectations for RPO 2012 service line growth dropped to second place with a still very strong 4.0, with payroll remaining in the lead at 4.2. MPHRO comes at 4.0, showing continued strength for the latest generation of standardized processes starting out with initially smaller scale and scope. Look for buyer interest in multi-country and regional standardized and platform services to continue for payroll, RPO and MPHRO. North America and the U.K. will remain the target for modest growth in benefits administration at 3.5. Good news, despite a small drop in pipeline activity for learning (3.4), all service lines are healthy and are showing a reasonable amount of activity.

Will there be continued economic and political uncertainty? Sure. The good news is that HRO deals can and are being done when the basics of demonstrating both proven business value and cost justified efficiency are clear. So let’s get real and get on with the business of life and business – and have a Happy New Year!

Linda Merritt, Research Analyst, HRO, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.