How critical a provider’s HRM BPO business is to its core determines the quality and longevity of your partnership. Part 1 of 5.
Since the inception of this column at the beginning of 2003, I’ve been writing about the importance of various systems-related topics to the success of HRM BPO providers, the successful delivery of HRM BPO services, and the successful execution of HRM BPO deals—topics of increasing interest to both the providers and their prospects/customers. There’s much more to say about these system-related topics and about their importance to the success goals of the delivery system choices being made by buyers and sellers of HRM BPO, and I will return to these topics in a few months. However, I wanted to take the next few columns to make sure we don’t lose sight of the many other factors that must be handled well if an HRM BPO provider is going to be around long enough for its service delivery to matter. If you thought you saw consolidation and just plain provider failures in 2005, prepare for whiplash in 2006. And those left standing will need to have more going for them than excellent delivery systems.
A broader adoption of multi-tower deals means payroll is often rolled up in full-service outsourcing agreements.
Outsourcing payroll just isn’t what it used to be. Although industry estimates indicate that fewer than 50 percent of all companies outsource payroll (the universe includes millions of small businesses), the number of standalone payroll deals aren’t growing nearly as quickly as the number of multi-tower outsourcing deals. That’s because while many companies still outsource just the payroll portion of their HR services, record numbers of buyers are outsourcing end-to-end services including payroll.
Small organizations are more likely to outsource payroll, but larger firms are catching on.
Growth in spending for stand-alone payroll outsourcing—although less dramatic than growth in the overall HR BPO space—has remained steady in the 6-to-8 percent range in the U.S. It’s noteworthy, given the size and maturity of the market. IDC regularly surveys organizations that make HR outsourcing decisions, and the results of these studies show that payroll outsourcing inclination is changing. Read on to see how.
Ceridian Signs 100th Payroll International Client
Enterprise HRO provider Ceridian said it has signed its 100th multinational payroll client and now provides multinational payroll outsourcing in 38 countries, across the manufacturing, technology, financial, and other industries. Introduced more than three years ago and expanded in 2005, Ceridian Multinational Payroll Solutions enables global employers to contract with a single provider for all of their payroll needs, reducing the need to keep up-to-date with payroll regulations as well as the cost and responsibility of employing payroll experts in each country.
Sawyer Realty Holdings LLC has purchased Ultimate Software’s UltiPro Workforce Management delivered through its hosted service delivery model, Intersourcing.
Sawyer Realty Holdings is a privately held real estate acquisition and management firm that has been using a service bureau. With a plan to grow its nearly 1,000-person employee base, the holding company needed deeper functionality and richer reporting capabilities than it has available with its payroll outsourcer. The firm selected the on-demand delivery model of UltiPro because Ultimate Software assumes responsibility for all of the IT functions associated with UltiPro, such as purchasing hardware and system software and managing backups, versioning, and upgrades, while providing Sawyer’s users with browser access to features that:
* Facilitate company growth through acquisitions
Bringing the iPod “experience to HR could make things fun again. Our panel of expert techies reflect on the impact and pitfalls of technology on the department.
Naomi Lee Bloom (NB) is the managing partner of Bloom & Wallace and a recognized leader in the HRM delivery system (HRMDS) sector. She works as a change agent and HRMDS planning coach for large corporate clients, as an advisor to HRM software and services vendors on business strategy and product/service design, and as a provider of competitive insight and due diligence services to the investment community.
Measured results don’t always offer a complete picture of whether an outsourced activity completely meets the client’s needs.(Part V was run out of order in the December issue.)
After having read the previous columns in this series, you’ve got a metrics spreadsheet with the HRM domain model—mine or yours—arrayed as the columns and the metrics taxonomy—again using mine or yours—arrayed as the rows. Now we have to decide which actual metrics to use, along with their target values and the time periods, across which we’ll bud-get/forecast and then measure them. Before you conclude that I’m even zanier than you’ve heard, rest assured that you are not going to fill in all or even most of the cells. We could do that, but the effort would far outweigh the benefits, and we would have turned analysis paralysis into an art form.
Go beyond surface indicators to reveal root cause for HRO successes and failures.
We’re almost there. After examining the complexities of metrics in previous columns, in this issue we present definitions and examples for the rest of the HRM metrics taxonomy. With these definitions and your metrics spreadsheet, you’re ready to do a baseline assessment of the state of your current HRM policies, programs, and practices, as well as of your current HRM delivery system (HRMDS). These cover not only the traditional terms of costs and volumes but also the far more meaningful terms of business outcomes. If you’re planning to outsource one or more processes or move aggressively to comprehensive HRM BPO, beware the service level agreement that focuses only on costs and volumes, error rates, turnaround times, etc., and doesn’t commit your provider to helping you achieve your business outcomes.
Our suggestions to other mid-market organizations considering HR BPO.
To understand Travel Traders’ decision to outsource to an HR BPO, I first need to explain a little bit about the history of our company. In many ways, it all started with a date very familiar to everyone: September 11, 2001. Prior to this day, WHSmith, one of the U.K.’s leading retail groups, employed many individuals—who were later hired by Travel Traders, which hadn’t come into existence yet.
Partnership Marks Benefit Provider’s Expansion Into HR Contact Service
QUINCY, Mass., Nov. 2, 2005 – Aetna Inc., one of the nation’s leading providers of health care benefits, has selected CitiStreet to provide certain human resources services and health and welfare administration, it was announced today.
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