Posted tagged ‘World Economic Forum’

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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How Mercer’s HCM Views Impact HRO

June 11, 2012

Would you build a $4.5bn facility in Africa if you were not sure you could find the skilled workers to run it? That was the comment of a real CFO at this year’s World Economic Forum in Davos. Human capital management (HCM) was one of the hottest topics at the forum drawing C-suite leaders into a full day of discussions. Concern about talent shortages has reached #2 on the risk management list, and top business leaders are recognizing talent as both a key competitive factor in growth and its lack as a risk factor limiting growth, especially in emerging markets.

This was the opening conversation at Mercer’s analyst forum focusing on its Talent, Rewards, and Communications (TRC) consulting practice and its approach to global talent growth. The TRC group is led by Pat Milligan, Senior Partner and President, and it accounts for $600m of Mercer’s $3.8bn 2011 revenues.

The forum was also about Mercer’s approach to its own growth. Mercer has increased its feet on the ground in emerging markets and is adding to its portfolio of services. Having completed seven acquisitions in the last sixteen months, including ORC Worldwide and CENSEO, expect to see more strategic acquisitions in the near future as Mercer leverages its cash on hand to build scale. Mercer’s TRC practice already has a great start with 55% of revenues from outside of the U.S. and 18% growth in 2011, 11% organic.

Mercer is focusing on more than consulting as a standalone service.  It is combining consulting with enabling technology and data to continue to win in its very competitive market space. Along with discussions on talent management, there were demonstrations of technologies and tool kits to gather, monitor, and manage information that helps clients make better people decisions, such as Mercer iknow and Human Capital Connect. 

Most clients cannot afford to immediately “rip and replace” their current tools and technologies, so Mercer will also help clients who say, “make what I have work.”  Its new Belong portal will be the front door to bringing together the information, tools, and applications – whether it’s Mercer’s own or a client’s blend of programs. Offering HR portals is not new, but Mercer is building in data extractors to offer the most needed information, dashboards, and limited functionality within the portal without having to go out to the full application.

There are other critical components to consider. This is where HRO comes in as part of the build and operations team to ensure cost-effective and viable end-to-end HR services for the participants, HR generalists and COEs, managers, senior leadership, and the enterprise itself.

Whether as a single source of consulting, solutions, and services or by using an ecosystem of preferred partners, is your HRO service provider(s) capable of helping you go from strategy to design, build, operate, and improve your HR capabilities and services to deliver full business value?

Linda Merritt, HRO Research Analyst, NelsonHall

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ManpowerGroup Latin America Analyst Event

May 22, 2012

ManpowerGroup Solutions held its first analyst event outside of the U.S. in Mexico City to focus on the fast-growing Latin America market which includes Mexico and Central America (MeCA), and South America. I must first say the hospitality extended to us by both the Latin America and U.S. ManpowerGroup teams present was the warmest I could have imagined.

The agenda included:

  • Introduction to ManpowerGroup MeCA
  • Talentism is the new capitalism: ManpowerGroup insights from the World Economic Forum
  • The economic landscape in Mexico and Latin America
  • ManpowerGroup priorities, progress, and perspectives
  • The RPO and MSP market in MeCA
  • Visit to ManpowerGroup client and ManpowerGroup office (particularly helpful to understand how jobs are advertised in Mexico)
  • Labor and workforce demographics in South America
  • ManpowerGroup brand, messaging, and target markets
  • The global RPO COE
  • Analyst perspectives on topics including: client readiness for global talent planning, client satisfaction, and ManpowerGroup strategies

With such an informative agenda, I’d be writing a small book if I tried to cover all the content, so I’ll focus on the client visit to KidZania. KidZania is a global organization with franchises in Mexico. It is opening its third office there by June, which we were able to visit. KidZania is focused on creating a live learning experience for kids that allows them to role-play adult activities including working different jobs, spending money, and even learning how to drive a miniature car after acquiring a permit. The facility is Disney-like, but better because adults are not allowed inside. ManpowerGroup also has its first job agency within KidZania, so kids can assess their skills and search for jobs available on computers.

ManpowerGroup Solutions began providing RPO services to KidZania in 2010 after the client was searching for an agile vendor that could provide a flexible workforce solution with a focus on talent. The client stated the following three primary objectives of which ManpowerGroup has exceeded its expectations:

  • Find the right candidates fast
  • Reduce time / cost of recruitment, including quickly scaling up and down to meet hiring needs
  • Create the right culture among kids, parents, and collaborators.

I’ll revisit the Latin America market in a future blog, but for now I will say that although Mexico had one of its biggest recessions in 2008 – 2009, it has made a quick recovery, and is expected to create ~1.2m jobs this year. Mexico is about more than just outsourcing for labor arbitrage; it is about outsourcing for job skills where more than 100,000 engineers and technicians graduate every year from science and technology programs. Just last month, for example, Volkswagen’s Audi luxury-car unit announced that it will open its first North American factory in Mexico.

ManpowerGroup has more than 2,000 clients in MeCA and is present in 10 countries in South America. RPO is provided to both Mexican headquartered clients and U.S. MNCs with hiring needs in Mexico.

Gary Bragar, HRO Research Director, NelsonHall

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HRO Get Ready for the Human Age

October 27, 2011

ManpowerGroup reported its 3Q 2011 earnings last week, a bit more on that later. First, I want to highlight a “big idea” approach to talent management that the company has launched. Speaking at the 2011 World Economic Forum in Davos, Switzerland, Jeffery Joerres, ManpowerGroup Chairman and CEO, announced that we are on the cusp of “Entering the Human Age.” According to Joerres, in the Human Age, talent is the key differentiator for business success and technology becomes the great leveler, allowing skilled individuals to vault the restrictions of national borders, and increasingly, of when and where they work.

Many of the elements ManpowerGroup addresses are already known in the world of HR and HRO. The impact of the technology-enabled globalization of talent, the need to simultaneously deal with an aging workforce while engaging a mobile new generation, and the growing mismatch in available labor versus skilled talent. All of these lead to the need for a new strategy and approach to attracting, developing, and retaining talent.

The future of talent envisioned in the Human Age is both hopeful and daunting as we are only entering the transition period with a long road ahead. It is a future in which employers would benefit from a consulting/outsourcing partner with the scale and scope of ManpowerGroup, with $22bn in revenues and a presence in 80 countries.

I love big ideas that come from HRO service providers showing that HRO can be more than transaction, technology, and contact center cost and efficiency management. Big ideas can also lift and differentiate a company’s brand.

One of the keys to brand management is consistency and constancy of messaging. IBM is doing a very good job of taking a big idea phrase, i.e., smarter planet, connecting it to its brand, and naturally to its consulting and services. Going one step further, IBM makes the concept a central theme running throughout its strategic initiatives. For example, the HRO team had to show how its investment initiatives supported one or more of the six imperatives for a smarter planet.

ManpowerGroup is making a good start. The speech in Davos was backed by a special ManpowerGroup website for more information on the Human Age, including a 58 page booklet outlining the concept and providing research and experienced insight on changes that will be integral to the new age. Other 2011 white papers from ManpowerGroup are picking up the phrase and it was also used in its 3Q 2011 earnings report. Further use across the external website, news releases and other collateral, as well as internal use will strengthen the connection to ManpowerGroup.

For 3Q 2011 ManpowerGroup reported revenues of $5.8bn, up 16% overall and 9% in constant currency. EPS were $.97, up 43.5% from $.62 in the prior year quarter.

Linda Merritt, Research Analyst, HRO, NelsonHall

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Healthcare on the Global Stage – What is HRO’s Role?

May 26, 2011

Health and welfare have been linked not just to healthcare and productivity costs, but to global economic development. In the HRO community, we tend to think of healthcare in terms of the impact on employer costs. Current U.S. healthcare reform reminds us it is an issue of national importance. We need to think even bigger.

According to a joint collaboration that began in 2009 by the World Heart Foundation, World Health Organization, and the World Economic Forum, employers are the best placed to encourage the healthy lifestyles that can positively impact chronic diseases, which are viewed as a global threat to human lives and continued economic growth and development.

Wellness is more than a “nice to do” program; it is an economic imperative, a competitive advantage, or a liability for employees, employers, and countries.

Whether the majority of healthcare expenses are borne by employers or the government, it is part of the total cost of doing business. In a study reported by HR Magazine, illnesses impacted by lifestyle cost the U.K. £17.7bn annually and could escalate to £33bn by 2025. And that is just the costs of three problems: obesity, alcohol abuse, and smoking!

Leading multinational companies are addressing health and welfare benefits from several perspectives: value-based care about employees, healthcare and benefits costs, productivity and the cost of absence, and talent attraction and retention.  Many aspects of benefit plans will continue to be shaped by local influences, but with an eye to overall equity across a global workforce.

The long view is sometimes needed to show wellness ROI. Lifestyle behaviors are not easy for many of us to change. For example, in the U.S. it has taken many years but there has been a significant reduction in smoking and smoking-related deaths.

Determining the optimum balance of centralization and decentralization and establishing a corresponding governance system is equally important as selecting the right delivery systems. HRO providers tracking client outcomes are in a great position to help build business cases for wellness and share best practices on what works and how to determine results. Clients, look for HRO vendors with a broad range of experience in change management that can help your organization move forward.

As a linchpin in the healthcare value chain, top tier benefits service providers can bring a powerful cross section of approaches including: research, consulting and design, investment financial advice and services, benefits administration, employee communications and decision support tools, emerging total absence management and employee advocacy services, third party vendor management, and analytics. HRO benefits leaders can also become influential advocates on the national and international stage impacting policy and regulations for millions.

Are you and your benefits vendor partner ready for the global healthcare stage?

Linda Merritt, Research Director, HRO, NelsonHall