Posted tagged ‘training’

Mercer on the Move

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

Linda Merritt, HRO Research Analyst, NelsonHall

This week I attended Mercer’s always well managed and informative analyst forum in Boston, MA. The meeting was focused on the talent consulting line of business.

Talent Management on the Rise

Mercer research indicates that human capital issues are a top CEO concern and managing talent is becoming a board of directors’ issue, moving beyond the traditional CEO succession planning and compensation to overall talent and workforce planning. The new Mercer Talent Barometer Survey, which was introduced at the 2013 World Economic Forum, reports that 60% of the 1,200 global companies surveyed are investing more in talent, but only 30% feel that their workforce plans are highly effective.

The business of talent has become both exciting and disruptive, with possible new entrants, globalization, media, innovations, and opportunities. (Talk about new entrants, eHarmony is considering getting into the talent matching game!)

With a possibility of double-digit growth, the talent group looked at how to grow across the talent value chain by expanding its services, tools and technology offerings for talent, rewards, and communications to increase growth and leverage Mercer’s depth of experience and capabilities.

The answer will become apparent over the next few months as more packaged solutions are launched that combine consulting, information, and technology to meet the needs of clients that want a less-customized consulting approach with “off-the-shelf” packaged and reusable services and tools.

Workforce Planning Versus HR Analytics

Some elements that will be leveraged are already mature and solid revenue producers. Surveys, benchmarks, and analytics for compensation/total rewards and job structures are a more than $200m line of business. Globalization of the revenues is already well on its way, with about equal distribution from North America, Europe, and emerging markets across 57 countries.

Instead of focusing on HR analytics, Mercer is emphasizing data acquisition and integration, data modeling, as well as data visualization as it applies to a wide range of workforce and data that drives business results. This may mean a consulting and outsourcing services engagement, it may mean workshops and training, or self-service use of integrated SaaS technology platforms with one or more Mercer products.

Think Big, Start Small, Move Fast

There are a lot of moving parts in Mercer’s strategy to create an integrated talent solutions portfolio.

It is brought together under the go-to-market Talent Impact label that includes new and existing products and services to forecast, engage, mobilize, reward and assess talent. Behind the scenes Mercer will be streamlining its own architecture into fewer and more integrated technology platforms to support the new offerings.

There is a lot to be done in a short time, but that is in alignment with the “think big, start small, and move fast” philosophy of Orlando Ashford, senior partner and president of Mercer’s talent business. Mercer is on the move!

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The Evidence is Mounting: HR Outsourcing is a Key Part of World Class HR Organizations

February 26, 2013
Linda Merritt, HRO Research Analyst, NelsonHall

Linda Merritt, HRO Research Analyst, NelsonHall

For years the Hackett Group’s HR benchmarking analysis has shown the increasing use of HR outsourcing. Now its research of Global 1,000 companies over the past two years shows that effective use of outsourcing plays a key role in achieving world class HR organizations. According to advisory practice leader Harry Osle, “our research shows not only that it is possible, but also explains precisely how world-class HR organizations manage to do more with less and play a key role in helping their companies succeed.”Hackett HR benchmarking provides staffing and cost comparisons by HR process and then identifies best practices. Those companies in the top quartile in both efficiency and effectiveness metrics are considered world class.

World class HR costs less

The research finds that world class HR organizations:

  • Spend 27% less on HR services per employee than typical companies
  • Reduce HR labor costs by 29%
  • Operate with 24% fewer HR staff per 1,000 employees
  • Spend 50% less on outsourcing
  • Dedicate 25% greater spend to technology.

World class HR focuses on operational excellence, talent management, and strong relationships

World class organizations use HR outsourcing more effectively; they outsource at similar levels to typical companies, but they retain fewer in-house staff associated with these processes, gaining greater cost benefits while avoiding work duplication and shadow staff.

HRO service providers have been encouraging clients for years to simplify and standardize processes and policies to gain the most from outsourcing, which matches what world class HR is doing:

  • Using more self-service for payroll, training, total rewards administration, and staffing services
  • Focusing on automation, standardization, and complexity reduction
  • Reducing the number of job grades, health and welfare plans, and compensation plans.

Integrated talent management is another component of success. The HR leaders closely align talent management strategies with business objectives and increase strategic workforce planning capabilities including high-level consulting and analytics and modeling. They also develop internal talent, recruit externally faster, and measure rigorously.

HR executives at world-class organizations have a seat at the table, and are universally involved in business planning compared to less than half of typical companies. Leading HR staffs are much more engaged in managing and facilitating organizational change.

World class HR brings data

According to Hackett, an increased focus on measurement and analytics is another way that world-class HR organizations partner with the business more effectively. Only 20% of typical HR groups report metrics for HR-managed projects, while the leaders do this over three times more often and close to 80% report organizational metrics for change initiatives.

Leading full service HRO vendors have been building out their own talent management offerings and have added options for HR analytics, providing support for two more aspects of world class HR.

Certainly we expect HRO to support operational effectiveness and cost reduction.  Now, we know it can do more in the transformation of HR into world class business partners!

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Transformational MPHRO is Thriving at IBM

March 1, 2012

I love covering MPHRO news! I still believe that broad-scope MPHRO has the greatest potential for long-term partnerships that create significant HR business impact and financial results for clients.

A summary of IBM HRO wins in the second half of 2011 shows that it is doing well in a still tough market for large-scale MPHRO while winning major MPHRO awards, including transformational deals.

Let’s start with the 13-year multitower award from Algar Group in Brazil that covers HR, F&A, and procurement supply chain management. The contract is valued at $100m and covers seven of Algar’s business segments and ~13,000 employees. While Algar Group covers a wide range of services: telecom, IT, agribusiness, and even tourism, it wants a standardized platform for back-office services with efficient processes, high quality, and lower costs. The HR portion includes call center, personnel management, benefits administration, payroll, training, and performance management.

There was also a unique long-term multitower award from Tanfeeth that covers HR, F&A, banking and other vertical back office, and client-facing BPO services. Tanfeeth is a fully owned subsidiary of Emirates NBD, the largest bank in UAE. IBM will provide managed services for the Tanfeeth shared services center, including BPO management and workflow services, predictive analytics, tools and training, and managing part of Tanfeeth’s delivery portfolio. The shared services center will also use IBM’s software applications to provide and manage the services and will support Emirates NBD’s 8,000 employees.

Tanfeeth will also provide services to other UAE organizations as the Gulf Cooperation Council’s first authorized multi-employer service center. This is a major strategic step for IBM in bringing larger-scale BPO to the Middle East. Tanfeeth has the needed local knowledge and long-term relationships, and IBM will bring its expertise in process, training, service delivery, and systems management.

As part of a planned transformational journey, there is a built-in attention for the employees of Tanfeeth and its clients covering change management, training and development, and even the opportunity for high-performance employees to participate in IBM’s worldwide leadership training program.

Then there is the competitive-bid MPHRO contract award from Air Canada for almost eight years and worth an estimated $76m. The deal is for full-scope MPHRO serving Air Canada’s 26,000 employees in North America and includes HR contact center, employee data management, employee travel support, payroll, benefits administration, leave management, recruiting services (with select support from manpower), and software application support for the HR systems used to provide the services.

Why is IBM continuing its MPHRO winning streak? According to Kevin Howlett, Air Canada’s senior vice president of employee relations, “IBM’s core strengths as a market leader in innovation played an important role in our decision-making process.” It also helped that the client felt IBM also had the strongest service offerings, a commitment to transformation, and the proven ability to ensure delivery performance and lower cost.

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.

The Market Segments of MPHRO

August 2, 2011

NelsonHall’s 2011 Targeting Multi-Process HR Outsourcing (MPHRO) report identified four unique market segments that MPHRO buyers fall within and their characteristics.  Let’s take a closer look at each.

The first segment, “multi-country standardization,” makes up 15% of the MPHRO market and contains buyers looking to centralize processes within certain geographies.  Buyers in this category typically have a presence in more than 20 countries and more than 10k employees. MPHRO services are either deployed regionally for these clients or globally and include HR administration and payroll. Another service often incorporated in this segment is technology to support other HR functions.  The main driver for MPHRO within this sector is to centralize processes within geographies and gain consistency.  Of the four market segments, this one has the highest growth rate for the next five years.

“Client-specific shared service transformation” is the second market segment and the largest at 48%.  Again, buyers in this group have operations in 20+ countries, with an average of 50 countries.  Employee headcount is more than 30k and typically averages more than 100k. Services include the entire HR service line (i.e., HR administration, payroll, benefits, training administration, and learning administration) with buyers in this category purchasing MPHRO to make their HR departments more effective by implementing best practices.  In the next five years, growth will be modest, but its overall market share will shrink due to decreased total contract values.

The third segment contains buyers looking to focus on their core business.  This is the second largest category at 24%.  These buyers have operations in one or a small handful of countries and tend to be start-ups or buy-outs.  Average employee headcount is 8k, but can be as little as 1k.  MPHRO services utilized by this group are HR administration, payroll, and sometimes recruitment or training administration.  The main reason MPHRO services are procured by this group is to obtain HR capability quickly so internal focus can be applied somewhere else, as often experienced by organizations experiencing high growth, especially in emerging markets.  Growth for this segment will continue to be strong.

Buyers looking for “technology-led HR service enhancement” make up the final segment at 13%.  These organizations are usually in just one country with employee headcount ranging from 1k to 50k+.  The service scope includes a technology upgrade, HR administration, and payroll.  The driver for MPHRO services for this group is to update an antiquated system and improve processes.  Like the “core business focus” segment, growth for this segment will steadily continue.

Stay tuned to find out success factors for service providers within each segment.

Amy Gurchensky, Research Analyst, HRO, NelsonHall

Training HR Business Partners – Breaking New Ground for HRO Relationships

November 20, 2009

My August 27 blog focused on the importance of training recruiters – both in-house and outsourced – on how to leverage new school recruiting techniques, platforms and mediums in order to prepare for the hiring uptick that’s expected in 2010. This training is vital, as it not only aids the recruiting effort but also enables HR to help support the company’s strategic and competitive business objectives.

Broadening our view here to training which helps enable attainment of business objectives and better relationships between HRO buyers and HRO providers, a variety of HRO service providers hold user conferences which include educational components. For example, Ceridian has an academic program that offers resources and some training for client HR teams, and its user conferences always offer a few very well attended sessions that qualify for continuing education credits.

So I was very interested in Kenexa’s announcement earlier this week of a training initiative it launched for E. ON U.K., an integrated power and gas company. Kenexa’s new one-day developmental training program is helping E. ON U.K.: 1) embed HR guru David Ulrich’s business partner model – the intent of which is to “help HR professionals to integrate more thoroughly into business processes and to align their day-to-day work with business outcomes… focusing more on deliverables than doables…Instead of measuring process, business partners are encouraged to measure results’’ – and 2) assess the development needs of its staff.

The training simulates an HR business partner’s workday, in which participants are observed and given immediate feedback including career advice, developmental recommendations and a full assessment report.

To underscore the significance of this type of training, let’s define HR business partner. Internally, HR business partners support the business leaders and teams of each division/ business unit of their company to manage implementation and execution of HR processes such as workforce planning and performance management. When involved in an HRO engagement, the HR business partners in the retained organization – at least at the top ranks – have added responsibility for managing the relationship with the HRO provider in conjunction with the governance team, and ensuring results are achieved and qualitatively and quantitatively measurable.

HR business partner training, if engineered to specifically address best practices in HRO provider relationship management and objectives achievement, represents a monumental boon to HRO buyers and providers alike.

While I think it will take a while for this type of training to catch on and for success stories to arise in the marketplace, I thoroughly expect buyers beyond E. ON U.K. will take notice and look for their providers to provide similar training. Further, I believe other forward-thinking HRO providers will begin evaluating how they can offer this type of training. 

I hope both parts of the equation do, as it will help strengthen the relationship and extend the strategic partnership between HRO buyers and providers, and more easily enable the realization of business objectives expected from the engagement.

Gary Bragar, Lead HRO Analyst, NelsonHall

Employee Dissatisfaction = Boon to the HRO Industry?

September 3, 2009

While this headline sounds counter-intuitive, let’s look at several news pieces published in just the last week.

An August 26 article by Hudson (a recruitment and talent management services provider) stated, “The global financial crisis has had a severe and divisive impact on the sentiment of the workforce in Australia and New Zealand.” “Employees’ feelings of disaffection are already playing out in the market, more employees are now seeking new roles (jobs) compared to before the downturn, almost half of the workforce is seeking a new role (47 percent) and 56 percent said they would consider roles they previously would not have looked at. If employees are disgruntled or unhappy with their current roles, the moment a better opportunity presents itself they will leave.”

Also on August 26, Jobfox, an Internet-based job site reported, “A recent study concluded that 54 percent of employed Americans plan to look for new opportunities once the economy begins to turn around”.

According to an August 31 USA Today article, “More than eight in 10 employers feel that their workers are just happy to have a job, but just 53 percent of employees feel this way, according to Monster.com.”

17 percent of workers are thinking of changing jobs in the next 12 months, per a survey employment website SnagAJob.com released on August 27.

And in a nationwide telephone survey of 500 hiring managers and 500 workers from various sized businesses – conducted by Robert Half International and CareerBuilder between April 30 and May 31, 2009 – more than half of employees plan to make a career change or go back to school.

Now, think of the impact this employee churn will have. Many are using the term “the jobless recovery” and talk of how the return to job creation will likely lag other evidence of recovery. This could lull in-house HR departments and HRO service providers into thinking the need to gear up for greater volumes will not be needed until later in 2010. While I agree, some churn may well pick up earlier. And churn triggers so many HR transactions – in virtually all aspects of HR including administration, payroll, learning, benefits hiring and staffing – that even if jobs aren’t growing, just replacing current positions will cause HRO activity to pick-up, as in-house HR departments have been cut to the bone.

I believe the economic downturn will be an economic upturn for the HRO industry. What do you think?

Gary Bragar, Lead HRO Analyst, NelsonHall

Back to School Time for Recruiters

August 27, 2009

As you begin packing up your kid’s bag lunches for another school year, you may want to stock up your pantry to pack others (perhaps skipping the peanut butter and jelly) for your in-house or outsourced recruiting staff. Why? Talent acquisition remains the top issue faced by today’s HR organizations, despite the recession. And the advent of advanced recruiting technologies and explosion of social media sites such as LinkedIn and Facebook demands recruiters be trained on how to best leverage these new opportunities for both active and passive recruiting or get lost in the old school dust.

Some recruiting process outsourcing (RPO) providers have already stepped up to the plate in this new recruiter training arena. For example:

•  AIRS, a The RightThing company, recently launched an online Social Sourcing Certification Class. Designed for both in-house and third-party recruiters, the class focuses on techniques to assist recruiters in sourcing passive candidates, helps participants better understand how they strategically benefit recruitment strategy and covers how social media can be leveraged to build a strong employment brand. After the class, attendees have the opportunity to earn their Certified Social Sourcing Certification through a certification exam.

•  And KellyOCG partners with industry leaders to coach and certify its recruiters in leading edge sourcing techniques, and its recruiters utilize its proprietary sourcing technology to enhance their ability to quickly connect with both active and passive candidates.

The importance of training extends beyond how to recruit using social media and advanced technologies into using metrics to prove the value and ROI of the staffing function, whether in-house or outsourced, to the business. And despite acknowledging the importance of doing so, few organizations know how to measure and consistently use the data to demonstrate improved business performance. An example of an RPO provider offering such training is The Workplace Group, which, during the past month delivered two webinars and two in-person training classes at its corporate headquarters on how to implement and use metrics to demonstrate ROI. The company also offers on-site classes at client locations.

And in an example of moving beyond a common, though important, recruitment metric of time-to-hire, Aon Consulting was able to improve the timeliness and selection process of sales professionals for a computer systems company, leading to higher close rates, equating to $120 million additional sales per quarter for the client’s company.

As the HR community, and the business community in general, views talent acquisition as a primary corporate critical success factor, the importance of upping recruiter’s skills to utilize new techniques and platforms, and how to measure their output, should not be underestimated. And while cost and lack of time are frequently cited as inhibitors to training programs, the expense involved is comparatively low and with hiring volumes down, now is a perfect time to invest in recruiting staff members.

Forward-thinking organizations are investing today in their recruiters in preparation for the hiring uptick that’s expected in 2010. Our advice? Start arming your recruiting staff now to leverage new school recruiting techniques, platforms and mediums. It’s a highly worthwhile competitive investment.

Gary Bragar, Lead HRO Analyst, NelsonHall