Posted tagged ‘talent management’

The CedarCrestone HR Systems Survey and HRO: Part 2

December 13, 2012
Linda Merritt, HRO Research Analyst, NelsonHall

Linda Merritt, HRO Research Analyst, NelsonHall

To complete my review of CedarCrestone’s 2012-2013 HR Systems Survey, I will highlight some of the newer HT technology trends.

SaaS HRMS: The Breakthrough Trend of 2012

According to analysis of the survey results, the benefits of SaaS HRMS include:

  • Faster time to value from deployments that take about half the time
  • Improved user experience, which leads to higher usage rates
  • Higher customer satisfaction.

The 50 top performers, based on financial measures, are leading the move towards SaaS HRMS solutions. Approximately one-third have a SaaS solution in place and more are planning to add SaaS in 2013.

Large market HR ERPs are still in the leadership position and face little near-term erosion from cloud-based HRMS. Near-term erosion, however, is the key phrase. Cloud-based SaaS HR platforms are disruptive technologies and as such, they are likely to quickly move up the value chain and eventually be able to serve larger and more complex organizations. In the meantime, SaaS HRMS adoption will move fastest among mid-market organizations.

Total cost analysis, not just system costs, will be important in the adoption of SaaS HRMS in larger organizations where ERPs are still less expensive on a per-user basis. Over time that pricing advantage will disappear, especially if evidence mounts for better performance and lower overall costs.

What’s Coming Next

  • Social and mobile-enabled processes are increasing in user-adoption
    • RPO and recruiters are in the lead using social media as ~50% of all recruiters use social-enabled recruiting processes
    • Early adopters of social-enabled processes show a link to 8% higher revenue per employee
    • Almost 60% of respondents have some mobile enablement in their HRMS
  • Integrated talent management is linked to the highest financial performance
  • Organizations with business intelligence solutions that integrate workforce and other organizational data outperform by 12% over those without such integration.

Keep in mind however that the newer applications are starting from small adoption bases and have not yet reached breakthroughs.

Key Words: Integration and Standardization

Throughout the survey, the results are links to the need for integration of HR applications with the core HRMS to gain the greatest benefits, and the precursor to integration is standardization of policies, practices, and processes. For example:

Integrated talent management on the underlying HRMS platform attains the highest financial performance at the lowest cost and can lead to 50% lower BI costs.

HRO service providers can help clients with the initial standardization needed for creating an integrated HR technology platform, whether it will be ERP, SaaS, or a hybrid system. Buyers: have a clear plan and consider getting help in investing, deploying, and using the new tools strategically to create business results. It is harder than it looks!

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The CedarCrestone HR Systems Survey and HRO: Part 1

December 7, 2012
Linda Merritt, HRO Research Analyst, NelsonHall

Linda Merritt, HRO Research Analyst, NelsonHall

Lexy Martin, CedarCrestone’s research and analytics vice president, debuted the 2012-2013 HR Systems Survey at the HR Technology Conference. I always enjoy pouring over this research, particularly now as it is in its 15th year and is full of trends and insights into what is happening with HR technology. The findings are especially interesting this year as we see the emergence of newer technologies come into usage and high expectations for the future growth of HR SaaS HRMS, analytics, social, and mobile technologies.There is a lot of good news for HRO service providers and HR technology vendors. As we know, technology investments have seen some lean years recently. This year, the survey of 1,246 respondents from HR, IT, finance, operations, and executives indicates that 50% of large and medium-sized organizations will be increasing HR technology spend for 2013. Interestingly, the largest increase will be from organizations outside of the U.S. and Europe (59% to 44%).

The top HR technology initiatives for 2012-2013 include:

  • Business process improvements and innovations
  • Talent management processes and automation
  • Service delivery improvements
  • Business intelligence/workforce metrics.

While the greatest growth over the next three years is expected for workforce analytics/planning (142%), social media tools (81%), and service delivery (57%), it is important to remember that adoption of the more common technologies is not at 100%. HR administration is highest at 95%, but service delivery applications, which include employee and manager self-service is only at 49%. Check the full report for results by size and industry. For example, large enterprises have higher adoption rates, and industry varies with early adopters seen in high tech, financial services, and retail and late adopters seen in higher education and public administration.

Key Observations

  • A shared services delivery model that includes an HR help desk application and self-service delivers the highest level of efficiency to enterprises and saves at least 15% in administration costs
  • Basic workforce management technologies including time management self-service, absence management, labor scheduling, and labor budgeting can grow operating income faster
  • An integrated HRMS and talent management solution can yield up to 33% higher revenue per employee.

The survey is not about HR outsourcing, but it sure applies. Between the HR technology initiatives, state of adoption of HR technologies, and evidence of results who better to help a client out than your friendly HR service provider!

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Update on Shared Services and HRO

November 29, 2012

I am on the Human Resources Outsourcing Association (HROA) Publications and Practices Committee and for the November meeting our hot topic was an update on shared services and HRO.

Linda Merritt, HRO Research Analyst, NelsonHall

Value Delivered

All three guest speakers agreed that HR shared services organizations (SSO) remain one of the core transformation trends in HR. Colin Brennan, Aon Hewitt product management and strategy VP, sees that the movement to SSOs and HRO is focusing more on value delivered and less on pure cost.  Clients want to improve both the cost and quality of services like talent management, recruiting, and learning. Clients also want to measure and manage HR issues across the enterprise, whether it is various operating divisions or regions of the world.

Tech Talks

Maribeth Sivak, a principal consultant with ISG, also sees an uptick in interest in SSOs and HRO, but as a follow on to HR technology decisions.  Many companies are facing major and costly upgrades in core HR technology systems, which create the opportunity to consider consolidation into shared services including HRO. Cost is a key driver, of course, but so is a desire to improve the employee experience with mobile and social capabilities as well as improve HR with access to more HR analytics.

Major technology costs also open the door for considering new vendor-provided systems and even SaaS. As SaaS offerings move “up stack” there is and will be a call for BPO service support.

The Chicken or the Egg

What comes first, shared services or HRO? Some start with HRO and others create SSOs first. Either way, clients usually want to get their arms around what they can do first and then look to optimize and increase velocity, often ending up with a blend of both.

At KellyOCG, Kathleen Bienkowski, global shared services VP, sees some organizations that start with shared services continue to evolve into multi-functional general business services as they mature. KellyOCG has its own showcase that demonstrates many of the aspects of a mature SSO: delivery centers, transaction processing, recruitment sourcing, and a knowledge center for global mobility. The contact center is outsourced to another division, Kelly Connect.

What Doesn’t Change

Each of our speakers commented on the continued need to manage major change including:

  • A strong internal sponsor / champion to drive the change
  • A clear vision that articulates the benefits and defines the future state delivery model
  • Change management  in transition and implementation plans
  • A governance structure for performance and issues management.

As both shared services and HRO reach a level of maturity, they are reaching a level of acceptance with less perceived risk in the decision, value is balancing the focus on cost, and pent up technology needs will be opening the door to opportunity. All in all, a great update with plenty of good news!

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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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Moorepay’s Roadmap to Success is in the Cloud

October 4, 2012

Linda Merritt, HRO Research Analyst, NelsonHall

Moorepay is a payroll and employment service provider in the U.K. with over 10,000 clients and it is a part of NorthgateArinso (NGA). Earlier this year I blogged about the launch of its new HR and payroll platform service for the small employer market in the U.K. This week, I spoke with Ann Fitzpatrick, Moorepay managing director, for an update.

In a brief recap, MoorepayHR is a cloud-based SaaS and BPO service built on NGA’s Preceda SaaS platform that is customized for the U.K. market and combined with Moorepay’s payroll and HR services such as employment law and health and safety advisory.

Cloud Opens the Small Employer Market

Most major HRO vendors do not attempt to reach the small employer market, which is just what Moorepay serves. Certainly small employers want professional and modern services, but until the rise of streamlined HRO platforms in the cloud, the costs were unaffordable for both clients and vendors. In the U.S., ADP has had such great success with Workforce Now, it launched a larger version called Vantage HCM. Now, employers in the U.K. can have the same level of service as larger companies at very affordable price points.

The Roadmap to Success

There are three levels of service, each with its own pricing openly displayed right on the company’s website. Payroll is available as an option with each of the service levels.  Approximately 40% of clients are currently adding payroll. In a bit of a nice surprise, ~80% of customers are choosing the highest level that comes with client services, making it a real BPO offering.

A 1Q 2013 launch is planned for the highest level of service, HR Advanced, which will add modules for talent management, recruiting, and remuneration. That will make the service more valuable for employers in the 100-400 range with more complex HR needs.

With its large base of payroll clients, Moorepay will later market the new system and services to its existing clients to allow conversion to the new system and added services.

Finally, Moorepay is receiving good support from the NGA Preceda team and they will work together to ensure the technology development roadmap is completed in the near future, including mobile and tablet access.

The Proof is in the Pudding

The new system has just reached its three-hundredth customer and all of these customers are new to Moorepay. The company now has a solid base of wins and users to move forward with its multi-stage approach to growth.

The small employer market is clearly hungry for such a service. Even before launch, there were hundreds of inquiries, and the number of inbound leads has rapidly increased. You know something is going well when customers are lining up at your door!

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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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