The CedarCrestone HR Systems Survey and HRO: Part 1

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 15^th 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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HR Tech Another Success: Part 2

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 1^st in supplying IT and essential business skills; the U.S. ranks 23^rd.
• 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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HRO and Talent Management by Client Market Position

Talent management, in all of its various forms, rises and falls depending on how clients perceive its importance at a given time. For high performing companies, it is never too far from the top of the mind.

The talent management services that are wanted and needed by a client can vary by the market position of the enterprise. According to the i4cp survey on The Critical Human Capital Issues of 2011, the top issues change in order of importance between higher and lower performing companies:

      Higher Performers                                         Lower Performers

1. Succession planning                       1. Strategy execution/alignment

2. Leadership development             2. Managing/coping with change

3. Talent management                        3. Leadership development

4. Performance management          4. Talent management

5. Knowledge retention                      5. Innovation and creativity

While many companies are returning to plans for growth, others are still struggling with getting performance improvement.

As the economy recovers, it will once again be harder to attract and retain needed talent. Aon Hewitt’s 2011 Talent Survey shows that engagement levels remain low, that there is a lack of confidence that leaders will retain their critical talent, and that middle management will be essential to business strategy execution and engaging the workforce.

Combine these items with an assessment of a client’s outsourcing maturity and a service provider can shape an offer to show how its services can meet the current and future needs of the client. For example, managing the succession pool for the very top deck is easy enough to do without commercial tools, but it is harder to gain visibility into middle and direct management, or hard to source jobs, without supporting tools and access to standardized organizational data sources.

A company low in outsourcing maturity and lower in performance within its markets may just need a few basic tools to increase process efficiency at the lowest possible cost. Anything too complex may go largely unused and bring complaints of being oversold or not worth the price. The highest warning signals must go to a lower performing organization that does not understand the roles that only its own managers can play – the best HRO services in the world cannot substitute for leadership and this is especially quickly apparent in the talent management arena.

A higher performing company with a trusted HRO service provider partner may be ready to add a fully integrated talent management suite (perhaps with consulting services) to connect with and add value to existing services, and use advanced workforce analytics to attract, retain, and develop talent for the future and for today’s business results. Here, the client/HRO partnership can be nicely synergistic, enhancing both parties.

Companies ready to improve performance and grow are great candidates for HRO. Just be sure to understand each clients starting position and show how HRO services and partnerships can help each one reach its various goals with a service plan and path that is just right for them.

Linda Merritt, Research Director, HRO, NelsonHall