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An Outsourcing Insiders View of HRO World

We are all learning as we grow.

by Matt DeLuca

Jay Whitehead did it again at this years HRO World Conference. Always ready to push the edge, he boldly reminded all within earshot of the late Pope John Paul IIs message do not be afraid and fondly attached it to a major need for those of us in the HRO spacelearning. Learning is especially important at a time when we are constantly seeking new ways to be effective, while constantly delving further into outsourcing.

Ironically, Jays bold reminder was just before Susan Olivers presentation. She is Senior Vice President of Human Resources at Wal-Mart. Intrigued by her prepared keynote presentation that not even once included the O word, I first wondered about her abilities and those of the leadership at Wal-Mart. From Olivers speech, it is clear that she represents a model that Wal-Mart wants for HR that recalls the traditional line/staff support approach. While this seems the antithesis of the direction that most companies are moving, it is their company and they do employ 1 percent of the total U.S. workforce, so they must be doing something right. However, the success must be coming from other areas, as I am hard pressed to see where it is coming from their proposed HR model.

Taking a completely opposite approach, another attendee at HRO World and head of HR for another big retailer was Randy Ross, SVP Human Resources from Best Buy. Entering the Best Buy suite was an otherworldly event. People were buzzing and Randy greeted everyone who caught his eye. It seemed he was going to explode with ideas and excitement if the session did not immediately commence. And what a session it was!

Here is the future of HR. Ross is a bright strategic thinker with a strong action orientation. He quickly took charge of the session while sharing the podium with COO Diane Shelgren from Accenture HR Services. She had been the senior person responsible for the completion of the outsourcing agreement. It was clear that Best Buy and Accenture are still learning after a full year of implementation already behind them. Both Randy and Diane were articulate and extremely informative. They challenged the audience to ask demanding questions and they were quick with brief and insightful responses. This is the model that offers a glimpse of the future of HR outsourcing one that includes the challenges that need to be addressed and the rewards to follow.

If these two events werent memorable enough, on Wednesday, along came Andy Stern, head of the largest U.S. union, SEIU, with a rousing keynote that was thought provoking for a variety of reasons. In case you are wondering, he did mention the O wordin fact, he mentioned it many, many times. He is the one who has challenged the second generation leadership of the AFL-CIO to think as they have never thought before, and he is the one who continues to encourage them to expand and threatened them with the possibility of a walkout by the SEIU. To think he agreed to attend the conference and to do so after appearing on the cover of HRO Today magazine led to heightened expectations from those who rose early to hear his address in person. His suggestion that employers consider outsourcing to unions is certainly a radical way of thinking and even worth considering, until one realizes that a major systemic problem facing the unions continues to be redundancies within their own ranks. The problem starts with the traditional and current union model that has always considered the basic organization to be the union local with its benefits and training functions. Union locals are basically small businesses that refuse to consolidate themselves in the interest of eliminating redundancies and gaining expertise that, in fact, HR outsourcers provide. As bright as Andy Stern is, he has yet to recognize what HRO could provide to his organization.

How to sum up this barrage of messages gleaned from HRO World 2005? Do not be afraid to learnespecially when the experts themselves are still seeking the appropriate, relevant, and effective answers.

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ADP TotalSource Introduces Health Savings Accounts Through JPMorgan Chase

HSAs Help Business Owners and Their Employees Control Health Care CostsMIAMI–(BUSINESS WIRE)–May 31, 2005–ADP TotalSource, Inc., oneof the nation’s largest Professional Employer Organizations (PEOs),and part of the Employer Services division of ADP, Inc., todayannounced it is expanding its benefits program to offer health plansthat are compatible with health savings accounts (HSAs). EffectiveJune 1, 2005, clients may select HSA-compatible high deductible healthplans (HDHPs) as part of the comprehensive suite of health benefitsoffered by ADP TotalSource, Inc. Clients who elect an HDHP through ADPTotalSource, Inc. will make their worksite employees eligible toestablish Health Savings Accounts (HSAs) through JPMorgan Chase BankN.A., a leading provider of HSAs.

HSAs, which were authorized by the Medicare Prescription Drug,Improvement and Modernization Act of 2003, are portable health savingsaccounts that individuals can use to pay for qualified medicalexpenses.

“With health care costs far outpacing wage growth during the pastseveral years, employers large and small are challenged to provideaffordable coverage,” said Carlos Rodriguez, ADP TotalSource’sdivision president. “We’re regularly evaluating benefits that we canoffer to our clients to help them attract and retain the bestemployees. The availability of HSA-compatible HDHPs means thatemployees will be eligible to establish HSAs, and this will provideour clients and worksite employees with a means for reducing theoverall cost of health insurance while encouraging employees to besmarter health care consumers. To help our clients decide whether theHDHP/HSA option is right for their business, we offer access toexpertise from our human resources representatives and a variety ofself-service decision support tools, including cost calculators,educational Web casts and plan comparison tools.”

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Human Capital Institute and MENTTIUM Corporation Announce Agreement

Washington D.C. – May 26, 2005 – The Human Capital Institute (HCI), a non-profit think tank, association, and educator in talent management strategies, and MENTTIUM Corporation, the global leader in corporate mentoring, announced today that MENTTIUM will sponsor HCI’s Mentorship Strategies learning and research track.

“This alliance is the first step to building a panel of thought leaders for this key track within HCI’s Talent Development community,” said Allan Schweyer, HCI’s Executive Director, “Mentorship, while not a new concept, is becoming a talent management strategy for which organizations are seeking new approaches and technologies

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Weichert Relocation Strengthens Market Position With New Client Signings & HRO Partnerships

MORRIS PLAINS, N.J. – Building upon a record sales year in 2004,Weichert Relocation Resources Inc. continues to expand its clientroster, adding some of the world’s most recognized and respectedcompanies.

Recent client signings include such leading corporations as Ahold USA;U.S. Foodservice; Temple-Inland Inc.; Foot Locker, Inc.; RR Donnelley;Computer Associates; and The Wrigley Company.
The company has also bolstered its foothold in the Human ResourcesOutsourcing market by virtue of being selected as the primaryrelocation partner for the HR Services division of Accenture, one ofthe world’s leading management consulting and outsourcing companies.Through this partnership, Weichert Relocation Resources will serve asthe preferred relocation and assignment management supplier forAccenture HR Services’ clients.  

“Our recent successes can be attributed to strengths that distinguishWeichert Relocation Resources in the marketplace,” said Aram Minnetian,President. “These include our flexibility, financial management acumen,custom reporting capabilities, in-house policy and tax consultingexpertise, assignment management solutions and, perhaps mostimportantly, our personalized approach to customer service.”

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SCI COMPANIES EXPANDS IN INDIA AND U.S. TO PROVIDE TREMENDOUS GROWTH CAPACITY

TAMPA, Fla., May 19, 2005 – SCI, a national leading Professional Employer Organization (PEO), announces the opening of a new office in New Delhi, India, and the expansion of its Atlanta operation center. The expansion comes as the company scales to meet increasing demand for outsourced human resources (HR) services

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Market Pulse: Duke Energy inks HR outsourcing contract w/ Hewitt

CHARLOTTE, N.C., May 16 /PRNewswire-FirstCall/ — Duke Energy todayannounced that Hewitt Associates, a global human resources services firm, hasbeen selected to provide comprehensive HR back-office administrative servicesto the company’s U.S. and Canadian employees and retirees.

Under the seven-and-a-half-year contract, effective July 1, Duke Energywill outsource to Hewitt its back-office administration and relatedinformation technology systems in the United States and Canada, includingpayroll, active employee and retiree health and insurance enrollment andstatus, retirement plan administration, staffing and training enrollment andstatus, work force event and salary administration, and performance managementadministration. Other terms of the deal were not disclosed.

The contract will directly affect roughly 100 of Duke Energy’s 21,500employees, with most of the affected employees located at the Charlotteheadquarters site. Hewitt will offer employment to most of the Duke Energyemployees performing the work covered in the contract. Ultimately, all DukeEnergy’s U.S. and Canadian employees and benefit plan participants will seechanges in the manner in which they access some HR information and/or how theyperform certain HR-related functions.

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CSC Wins Contract Worth Approximately $230 Million to Support NASAs Shared Services Center at Stennis Space Center

EL SEGUNDO, Calif., May 11 /PRNewswire-FirstCall/ — Computer Sciences Corporation announced today that it has won a contract to provide support servicesto the new National Aeronautics and Space Administration (NASA) SharedServices Center (NSSC) at Stennis Space Center, Miss. CSC estimates thevalue of the award, which has a five-year base period and five one-yearoptions, to be approximately $230 million if all options are exercised.

Underthe terms of the agreement, CSC will provide administrative, financial,human resources and procurement support services to approximately20,000 NASA employees, applicants, contractors and university partners.

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Duke Energy Inks HRO Contract with Hewitt

CHARLOTTE, N.C. — Duke Energy today announced that Hewitt Associates, a global human resources services firm, has been selected to provide comprehensive HR back-office administrative services to the companys U

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