HRO – Helping HR Move up the Ladder of Business Value

Yesterday I listened to the “Prepare and Predict” webinar hosted annually by Workday and moderated by Bill Kutik, the founder of the HR Technology conferences. R “Ray” Wang from Constellation Research, Jim Holincheck from Gartner and Jason Averbook from Knowledge Infusion each offered three predictions for 2011. All three panelists are heavily savvy in the field of HR technology and while their comments were not necessarily about HRO, the overlap and relevance were significant.

So many things in HR and HRO are considered emerging trends and receiving significant coverage in the media. Sometimes the hype exceeds the reality, and that again seems to be the case with the use of social media in HR and even talent management. Yes, they are growing in both interest and use, but there are few breakthrough examples offered in case studies.

Jim Holincheck sees the use of social media making the most useful and practical progress in recruiting, and to some extent in learning. Many RPO service providers are leading in using social media like LinkedIn to broaden the net for recruiting. Making the applicant process more engaging and “warm” can also help build a pipeline of “warm” candidates.

The panelists agreed that first there needs to be a policy that guides who can do what, and then define the business expectations for any application initiatives. And don’t think you have a lot of time to figure this out. According to Ray Wang, the personal use of smart phones is already driving demand for action-oriented mobile and unified communications in many areas.

The key is not just that various new tools and technologies are present, whether in-house or via HRO, but how they are being used. A growing group will say they are using a talent management application. But the consensus on the panel was that what is really happening is basic automation, putting process elements like appraisals online. Currently, the greatest client-reported benefit of a talent management application is automation, not business results.

It is true that you have to walk before you can run and that the basic “wiring” needs to be in place. That brings me to one of my foundation principles; have an HR strategy that is aligned with business needs, designed to deliver business outcomes and including a design approach for HR technology and service delivery.

HRO buyers – it is only if you have a longer term plan and know where you want to get, and why, that you can select an ERP; otherwise, consider SaaS (as many are), determine how to balance best of breed with the need for integration, and which areas to support internally or outsource as you build a new or change out an old platform of HR systems and services.

HRO providers – show cautious clients looking to meet a few basic needs how your systems and services can enable automation and self and manager services at competitive costs, and is also ready to meet the HR needs of the business as it matures and is ready to move up the ladder of business value through HR as a strategy business partner.

Linda Merritt, Research Director, HRO, NelsonHall

RPO Edging Toward Global

As a follow-on to my November 22 blog on the happenings at the recent HRO Europe Summit, a question posed by an audience member to me and my fellow RPO panelists Alexander Mann Solutions, SourceRight Solutions and a professor from Lancaster University deserves a deeper look. The question was, “We hear about RPO going global. How should global RPO be defined, as compared to how people are using this term, and is a shift occurring?”

NelsonHall defines global RPO as hiring in two or more continents. And in that context, on the panel I said very few global RPO contracts have been awarded to date. There have been some multi-country contracts awarded within a given region, and a few North American contracts that include some hires in Central, Latin and South America, but not much beyond that. But, in a “we’re getting there” moment, I was able to cite that just two days earlier: 1) FutureStep was awarded a truly global RPO contract by Cummins Inc. to provide RPO services in North America, Europe, Africa, Asia Pacific and South America; and 2) Allegis Group Services and Talent2, in partnership, were awarded a multi-continent RPO contract by an unnamed global financial services company to provide RPO in several locations in North America and Asia Pacific.

And just last week, Manpower was awarded a large global RPO contract by Rio Tinto to provide approximately 11,000 hires per year in North America (US, Canada), Asia Pacific (Australia, India), Europe (France, U.K.), Middle East, South Africa and South America. Granted, three is not a crowd when it comes to critical mass of contract type indicators, but I do think we’re finally beginning to see RPO edging toward global.

As I identified in my 2009 RPO report, one of RPO buyers’ top vendor selection criteria is the ability to provide global delivery, including in-region recruiters. Subsequently, my critical success factors recommendation was that if providers did not already have a global presence, it would be prudent to begin pursuing a global recruiting partnership with vendors that could provide recruiters in countries and regions where new hires are needed. Since then, we’ve seen a number of such partnerships emerge, including the December 3, 2010 announcement of Adecco and the Beijing Foreign Enterprise Human Resources Company (FESCO) establishing a joint venture to take advantage of the emerging markets growth potential in China, and provide global RPO to multi-national corporations based in China per Adecco’s presence in 60 countries.

I believe we will see continued demand by global clients to have one provider manage all of their recruitment needs, and that, in turn, we will see many more global RPO contracts signed in 2011. However, getting buy-in and cooperation from business leaders in local countries is a massive change management issue requiring significant attention, care and effort. Providers can help prospective clients during due diligence to quantify current costs, time to hire, hiring manager satisfaction, attrition and other metrics to help make the case. 

Buyers and providers will be watching the success of these new global deals; and if they are indeed successful, they will create the impetus for increased global RPO demand in 2011 and beyond.

Gary Bragar, Lead HRO Analyst, NelsonHall