Posted tagged ‘workforce planning’

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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RPO Generation 2.0 is Ready to Go

March 28, 2013
Linda Merritt, HRO Research Analyst, NelsonHall

Linda Merritt, HRO Research Analyst, NelsonHall

Recruitment Process Outsourcing (RPO) is one of the younger HRO service lines and it is both growing and maturing quickly. The March issue of HRO Today recognizes the emergence of RPO 2.0.  NelsonHall’s RPO specialist, Gary Bragar, would certainly agree. Gary’s October 2012 Targeting Recruitment Process Outsourcing market analysis highlighted many of the same developments in this rapidly growing HRO segment.

What is New in RPO 2.0?

The rapid growth and incorporation of social media for recruiting is a big part RPO 2.0, one that keeps pushing RPO to the leading edge of innovation in the HRO space.

RPO services are rapidly moving up the value chain, and changing client expectations is the key. While reducing the cost of service provision is always on the table, it is no longer the number one issue. Flexibility and scalability will always remain important as well, given how quickly hiring needs can change.

Today’s RPO 2.0 clients are looking for more value:

  • Improved quality of hires
  • The latest tools and technologies for social and mobile
  • Expertise in accessing talent pools and passive hires
  • Greater focus on candidate experience
  • Analytics and insights, in addition to metrics and reports
  • Improved retention
  • Access to advanced services including employment branding, talent management, talent engagement, and integration with workforce planning.

Clients Simply No Longer Want To Do It

In the last few years, many buyers reduced internal recruiting staff in line with the reduced volume of hires, and they do not want to rebuild and reinvest in the rapidly evolving technologies and advanced skill sets it takes to succeed in today’s competitive, social, mobile, and global recruitment process market.

Buyer Choice is Broad

For every large staffing company that does RPO including Adecco, Kelly, Manpower, and Randstad, there are smaller vendors that specialize in RPO such as Ochre House and Pinstripe.   Most leading RPO vendors of all sizes can offer services in most of the regions of the world as they have partnered and made acquisitions to make their footprints global.

Not long ago, major multi-process HRO (MPHRO) providers either did not provide end-to-end RPO or saw it taken out of contracts. Now, more MPHRO providers have full RPO services strong enough to be offered as standalone services including ADP, Aon Hewitt, Infosys, and IBM.

With RPO 2.0 You Can Have It All

While having it all may still be a bit aspirational for most of us, we are finding evidence that successful client / provider RPO partnerships can improve process efficiencies (e.g., reduce time to hire 20% to 50%), reduce the total cost of hire (often 20% to 30% or more), along with increasing hiring manager and candidate satisfaction.

Imagine what we can achieve with RPO 2.0!

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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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Bridging Talent Management and Workforce Management with HRO

August 3, 2012

Linda Merritt, HRO Research Analyst, NelsonHall

One of the hottest topics in HR and HRO has been talent management (TM), including everything from recruiting and RPO to performance management and employee engagement. Major ERP vendors have snapped up TM software leaders to strengthen HR product lines, e.g., SAP and SuccessFactors; Oracle and Taleo. Very good moves and very on trend, but let’s not forget about the less flashy powerhouse: workforce management (WM).

TM and WM are both critical components of human capital management (HCM) and depending on definitions and models, there can be a lot of overlap. For my purpose here, TM is about the individual and the capabilities for a specific job position and WM is about groups of workers and managing multiple positions.

TM involves attracting, retaining, and developing people with the required capabilities according to requested volumes and performance management. WM involves workforce planning and forecasting the capabilities and volumes needed and day-to-day scheduling and time and attendance. It takes both processes to have the right number of people, with the right skills, in the right places, at the right time.

Let’s consider two more elements, HR analytics and ROI, that will also benefit from seamless HR systems and processes, which our dear HRO community can enable and deliver. Timely and accurate workforce data is a foundation block upon which HR is built. At least part of the drive for multi-country payroll has been to get better employee data, and there is an important feeder into payroll: time reporting. Today’s leading time and attendance systems offer great flexibility in capturing the detailed data needed for payroll plus analyses of productivity, labor costing, pricing, project billing, workforce planning, etc.

Everybody wants to tie HR and HRO to ROI. Lowering the cost of HR operations alone is not enough. We must show real impact in measurable business results. Simplifying a bit, TM supports improved business results through customer satisfaction and revenues generated; WM supports improved business results through optimizing SG&A via operations and reducing losses.

Many HRO offerings come in basic and advanced levels. HRO providers– ensure you offer both levels of time and attendance, scheduling, and attendance management services. Buyers – take the time to determine whether advanced workforce management services will not only provide better data, but will pay for itself through reductions in overtime and the impact of absences. Also, for many positions and industries, ensuring all customer-facing seats are filled at the right capacity, capability, and time has a direct link to productivity and revenues. Finally, don’t forget about compliance with wage, hour, and labor regulations where accurate records and proactive scheduling are a great defense against fines and losses.

HR and HRO in partnership can be the bridge to strengthen TM and WM across the entire human capital value chain.

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HRO 2012 Trends – The Evolution of Talent Management

January 12, 2012

The NelsonHall HRO team is pleased to once again contribute the annual HRO Today thought leaders forecast of trends that will influence the year ahead. ‘Artful Predictions’ covers a range of topics with talent management (TM) as one of the highlighted trends. We have covered the subject of talent management frequently as we see the opportunity for it to become an integral part of HR business process outsourcing.

For some time, I have called talent management a disputed ground and a potentially disruptive force that could shake up the HRO field. Why? This is because TM elements include so much of the human capital management value chain and cross over everything—from HR ERPs, software modules, HRO business process outsourcing, HR consulting and the roles of HR leaders, HR business partners, and internal shared service centers. TM includes performance management, succession and career planning, recruiting and staffing, compensation, and learning. I also include workforce planning and management under the TM umbrella.

In addition to the HR ERP vendors and the specialty TM software providers, there are HRO providers that are also building out their TM capability internally as well as through strategic partnerships and acquisitions.

  • Kenexa acquired BHI (Batrus Hollweg) a TM company. Although Kenexa has developed TM expertise internally, the company has also been enhancing its efforts over the past few years through prior acquisitions that have included:
    • Salary.com to strengthen its compensation management capability
    • The Centre for High Performance Development to further strengthen its leadership development and management training offering
    • Gantz Wiley Research to increase its employee survey research capabilities.
  • Mercer acquired Censeo Corporation to enhance its TM consulting capabilities and online platform of assessment services.
  • Both Kenexa and NGA are partnering with SkillSoft for learning content.
  • In July, Talent2 re-branded itself to simplify its talent management focus.
    • It also became a reseller of Cornerstone OnDemand, most widely used for its performance management, including succession planning and learning modules.
    • Talent2 also added advisory services as a service offering to help clients more effectively deploy the capabilities.

With recruiting as one of the core TM processes, RPO vendors are among the early leaders in developing internal as well as external TM service options. NorthgateArinso has been moving in this area as well, coming from the standpoint of bring it all together into one integrated system and services package. With the acquisition of The Right Thing, ADP signals both a stronger move into RPO and its interest in TM.

The HRO Today article also discusses whether HRO has reached the maturity stage of providing ‘true business value’. I believe that talent management evolving into a full-fledged HRO service with technology-enabled tools, data integration across the full suite of HR data, supported by analytics assistance and consulting is critical to HRO providing true business value results for clients and achieving its own full measure of success as an invaluable industry.

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.

From Public to Private – RPO Can Help – Part 1

May 20, 2011

According to data from the Office for National Statistics in the U.K., in 2010, public sector employment fell by 132,000 jobs with local government accounting for the largest proportion at 66,000.  In Q4 2010 alone, 45,000 public sector jobs were lost, including 24,000 in local government, 9,000 in central government, and 8,000 in Civil Service.

It is estimated that an additional 330,000 jobs will be lost in the public sector over the next four years.  While this is, of course, not good news, especially for those workers directly impacted, employment in the private sector increased by 77,000 jobs in Q4 2010.  Thus, the article last week by Hays is timely in that more needs to be done to support workers who are transitioning from the public sector to the private sector.

Hays and the London Chamber of Commerce and Industry (LCCI) partnered to publish a report called “The challenges of transition: from public to private.” Public and private sector employers were interviewed and in the report the LCCI and Hays identified six important steps to ensure successful transition including:

  1. Encourage better understanding – Coaching, mentoring, and peer-support schemes for public sector workers prior to, during, and after transition to the private sector should be encouraged. These would increase the retention of new employees and also enable the private sector to identify the skills available in the public sector.
  2. Incentivize the private sector – The government should subsidize recruitment and training costs for private sector employers who hire public sector employees. One option would be to adapt the Redundancy Action Scheme in Wales, which gives employers a contribution to salaries and training if they hire someone who has been made redundant.
  3. Identify regional skill gaps – Local enterprise partnerships and recruiters should work with trade associations and professional membership bodies to identify the skill shortages that will be created by future job vacancies and look at how former public employees can fill those gaps.
  4. Review on-boarding procedures – Private sector employers should review their onboarding (induction programs for new employees) in anticipation of recruiting people from the public sector to ensure successful transitions.
  5. Enhance existing support programs – Public sector employers should be more proactive in their support for workers facing the prospect of redundancy with practical job-seeking and career planning programs specifically designed to equip them for the private sector.
  6. Promote self-reliance and resourcefulness – Public sector workers should be encouraged to work with recruiting experts who understand both the private and public sector and can provide free advice on CVs, job applications, and interviews.

Public sector employees have many skills that are needed in the private sector.  However, to shift such a large proportion of workers will require specialist help.  That is where RPO providers come in. Although the loss of jobs in the public sector is more of a current U.K. phenomenon, RPO providers can help in several ways in all regions.  In NelsonHall’s recently published RPO market analysis report, the following trends are occurring:

  • Clients are seeking vendors that can help with their talent strategy and workforce planning. For example, vendors such as Hays provide workforce planning as part of their service offering and have seen an increase in the use of this service during the economic recovery.  Other vendors in the U.K. providing this are Ochre House in its contract with SAS and Carlisle Managed Solutions in its contract with Luton Borough Council.  In the U.S., Adecco’s recent RPO contract with SI includes employment branding, research, and talent market mapping.
  • Clients are looking for vendors that can provide consulting services around workforce planning, such as Fosters did in its contract with Futurestep, which includes hiring for positions in the U.K.  Part of the vendor selection criteria included the ability to provide value-added services beyond recruitment, including workforce planning.

But, there’s more to the story than just identifying skill gaps.  Take the weekend to think about it and we’ll pick this up again.

To be continued.

Gary Bragar, Lead HRO Analyst, NelsonHall

Employee Engagement, High Performance, and HRO

April 13, 2011

Employee engagement is down to the lowest levels seen in many years. Low engagement makes it hard to be high performing and can later raise turnover as employment opportunities improve.

  • In early 2010, The Conference Board found that only 45% of employees were satisfied with their job, the lowest rate seen in the 22 years of the survey.
  • This year, the 2011 Aon Hewitt Trends in Global Employee Engagement survey found that 56% of employees are engaged on average, down from 60% in the prior year, the largest year-over-year drop seen in 15 years. Declines were seen across Asia-Pacific, Europe, and North America, with only Latin America showing improvement.

My colleague, Gary Bragar, has consistently brought attention to the engagement topic because it is important and makes a difference for all: employers, employees, and HRO service providers. It can also make quite a difference! Aon Hewitt’s research indicates there is a strong correlation between employee engagement and financial performance. Organizations with high levels of engagement (65% or more) outperformed the total stock market index and had shareholder returns 22% higher than average in 2010. Companies with low engagement (45% or less) had shareholder returns 28% lower than the average.

Naturally, employee engagement that contributes to high performance business results is first and foremost a critical issue for C-level and management teams and there is a myriad of advice available, including consulting services from many of the HRO providers. Every organization, industry, and market has a life cycle and the management challenges will vary depending upon the stage. Accenture’s new book, “Jumping the S-Curve,” identifies three s-curves and outlines the critical issues for each cycle, including the importance of transitioning from one stage to another.

I see within the very insightful Accenture management advice opportunities for HRO contributions. For example, to climb the cycle of business success based on a winning idea, you need to reach a threshold of capabilities and competence and to attract and keep top talent in critical areas to maximize growth without collapse. As the cycle of achieving business success begins to end, new talent problems can arise as turnover increases due to fewer advancement opportunities and talent poaching. As a new cycle starts, a change may be needed in leadership and business competencies at the executive and other levels. Talent needs to be continually monitored, nurtured, and refreshed – all appropriate to the current and next cycle of the enterprise and what is happening in the broader market and economy.

Layering talent management services (e.g., recruiting, staffing, performance management, succession and career planning, and workforce planning) on top of a capable HR system for employee data management that’s supported by HR analytics can go a long way in helping clients see where they are now, identify gaps and emerging issues, and use HRO services and support to achieve a truly high performance-based business transformation.

Linda Merritt, Research Director, HRO, NelsonHall

HRO Staffing – A Balancing Act

March 30, 2011

Fast and flexible scaling is one of the major benefits of HRO. Scaling up is a lot more fun than scaling down, but both are important, take time, and consume resources. One of the toughest challenges in HRO is maintaining staffing and margins at the same time through the ups and downs of client demand and the overall economy.

Recent times required painful and expensive downscaling as HRO client demand and employment levels dropped, reducing volumes and overall spend. Significant expenses were allocated for staff severance and consolidation of real estate. Even in periods of growth, merger and acquisition “savings” targets are based largely on staff downsizing to reduce overlap, followed by real estate consolidation. Whether a service provider is growing organically or via acquisition, or responding to reduced demand, maintaining appropriate staffing capability, capacity, and expense is critical.

HRO is slowly recovering with RPO leading the way while some areas are still waiting for their upturn including learning and MPHRO. New deals are occurring, renewals are going well, and existing clients are once again increasing scale and scope, at least at a modest level. All good and welcome news!

HRO service providers are confident enough to prepare for a return to growth and make select expansions. At the same time, they know they need to add client load with a minimum of new hiring as pricing pressure is still intense. And this is not even mentioning the need for maintaining an experienced and qualified staff to satisfy client employees and other end-users in the ever changing world of HR.

On the upside, clients are growing in sophistication and understanding of HR outsourcing options. While onshore delivery still leads, especially for voice, acceptance of offshoring has reached the expectation that HRO vendors should offer multi-shore delivery options. Nearshore options and the use of non-voice channels like chat allow leveraging more work to selected centers, increasing the need for and the value of a truly global service delivery network.

Recent HRO service provider expansions include:

  • TriNet – Added three new U.S. offices
  • CPH – Opened a new office in Sydney
  • Futurestep – Added a global recruitment operations center in Houston
  • NorthgateArinso – Invested in a new global HR delivery center in Hyderabad, India; opened offices in Russia, the Czech Republic, and Istanbul; partnering with ICAP Group in Greece
  • Edvantage Group – New e-learning production center in Denmark.

Expanding the coverage of service locations helps avoid the war for talent and damaging attrition rates in the hottest spots as well as providing increased options for clients.

Buyers, do more than look for an SLA on turnover. Ask about the vendor’s current and future plans for managing staffing and service flexible coverage. Does your service provider show that they are at least as, or more, sophisticated as you are in workforce planning and management? They should be.

Linda Merritt, Research Director, HRO, NelsonHall

Top Topics at Last Week’s HRO Europe Summit

November 22, 2010

Although a working trip for me – as a learning session co-presenter with Raytheon, and on two panels, one on learning and one on RPO – I can easily say last week’s HRO Summit Europe got great marks in my book. About 40 percent of participants were buyers – a rare occurrence at conferences these days – with the balance being presenters, providers, analysts, press, researchers, staff and others. Discussions were lively and engaging, and…need I say anything about the beauty of Amsterdam, especially its architecture and canals?

My co-presentation with Raytheon, a learning outsourcing session called, “Bridging the Customer-Provider Divide,” was immediately followed by the learning panel, and witnessed buyer questions including: 1) What role does the retained HR learning organization play, including the role of the retained learning director, HR business partners and governance team?; 2) What lessons learned should a buyer that has just implemented a learning BPO contract incorporate?; 3) Why we are seeing more selective LBPO contracts and less full LBPO contracts?; and 4) What role does LBPO play in retaining knowledge as more employees will inevitably begin to retire? 

While tracks and presentations covered the HRO gamut, two of the major focuses were talent issues and RPO. Dr. Peter Cappelli, Director of the Center for Human Resources at the Wharton School of Business, opened the conference with a keynote entitled, “A Question of Talent.” He began by discussing that, in the 1950’s and 1960’s, 24 years of service with just one company was the average tenure per employee. At the time, companies invested heavily in continuous training, and believed in lateral and upward mobility. He then moved to the sobering stats of today’s workforce. Companies of course still want loyal employees, yet very few do little to give their employees in-turn loyalty, and only one in four of succession plans are utilized. The result is organizations spending thousands of dollars in employee development, only to lose them to competitors.

It almost feels as if organizations accept this as a looming cloud norm in today’s workforce environment. But I vehemently oppose that viewpoint. If you look at the pure financials alone, conservative estimates are that it costs one and a half times as much of an employee’s salary to replace that individual due to the cost of recruitment, development, learning curve, etc. How can that possibly be perceived as good business? I am feeling like an evangelist as I’ve written about it so many times in my blogs, but employee satisfaction and robust initiatives focused on talent retention are vital to competitive advantage and business growth.

One of the largest and most well attended tracks at the conference was on RPO. I was also a member of an RPO panel discussion entitled, “Deep Dive: Driving the Future State of RPO,” along with Alexander Mann Solutions, SourceRight Solutions and a professor from Lancaster University. One question posed by a buyer member in the audience was how RPO has evolved. Each panelist, of course, had its own answer. Mine, not surprisingly as an industry analyst, is that by providing what I call “value-added services” or what I consider to be the “richer RPO services,” you are a true end-to-end RPO provider. This means: 1) services on the front end in workforce planning, talent strategy and employment branding to ensure the right employees with staying power are hired; 2) services in the middle to manage internal recruiting/mobility; and 3) services on the back end, including robust onboarding and ongoing, bi-directional employee engagement.

There are other shifts occurring, including interest in global RPO, and I will cover more on that and learning outsourcing issues discussed at the conference in upcoming blogs!

Gary Bragar, Lead HRO Analyst, NelsonHall

HR Business Intelligence – How does it tie into HRO?

October 28, 2010

HR organizations are largely on the path to improve the use of technology in managing administration, and service delivery and even workforce and talent management are coming along, according to the CedarCrestone 2010-2011 HR Systems Survey. The highest penetration rate is for administration technologies like core HR recordkeeping, payroll and benefits administration, at 90 percent. These are also top areas for HRO. Service delivery (47 percent), workforce management (45 percent) and talent management (43 percent) are not yet quite at the half-way point.

Business intelligence tools like data warehouse and reporting and presentation applications have reached 37 percent. Workforce optimization is lagging at 17 percent for tools that enhance and enable the use of talent analytics, and dynamic workforce planning that helps prepare for and align a workforce with changing business needs and strategies.

Workforce management addresses the here and now, and how many people, where and at what expense has been a big focus throughout the economic downturn. Sadly, the information was largely used (and needed) to determine where to cut costs and ensure the reductions were achieved. But in  normal times, workforce data is needed to meet and maintain current and near-term staffing levels.

With workforce management tools and data improving, some organizations are not sure where to go next with the tools or how to fully leverage them. With a vague plan, even at 37 percent penetration rate, business intelligence packages can end up being a pretty, expensive, underutilized investment.

As I wrote about in last week’s blog on building an integrated HR ecosystem, it is the connectivity of a comprehensive set of tools and technologies that can unleash the true strategic power of HR in enabling business growth. The ability to use the system to understand, discover and advise is also needed.

As HR uses greater levels of technology for administration and self-service, HR’s workforce needs are generally reduced. In the case of workforce optimization, leading practice indicates that specialized staffing for workforce reporting and workforce planning increases slightly. Large organizations in the study averaged 5.8 people in workforce planning and 4.8 in reporting, while leading users for workforce optimization tools averaged 7.8 and 5.3, respectively.  Oh, and in the leading practice companies HR was viewed as strategic (66 percent), more than in other large organizations (41 percent)!

This is such an important area for HR to truly achieve transformation. It is also important for HRO service providers to be able to move up the value chain and not be relegated to only being useful in building and running the back office administrative systems at lower operating cost – although that will always be a cornerstone of HRO.

Buyers, be sure the vendor you select can not only meet today’s needs but can continue to be your partner as you build out an integrated HR ecosystem. Providers, be ready to demonstrate that you are the partner that can help clients bridge the gap in building and using workforce optimization tools to create business results, including by making them easier to use and understand, and simplifying reporting and providing basic analytical services.

Linda Merritt, Research Director, HRO, NelsonHall