The association for the HR industry marks its 10th birthday with a reflection on how the market has evolved.
By Debbie Bolla
When birthdays creep up on the calendar, don’t we all take a step back and reassess? It’s often a time to reflect where we have come from, what we’ve achieved, and what it will take to get to the next level in our lives.
As the Human Resources Outsourcing Association (HROA) neared its 10-year anniversary, the leadership team knew the HR industry had been evolving, and the association had been growing right along with it. Enter the launch of the HRO Today Services and Technology Association.
“The HRO Today Services and Technology Association combines the best team of industry expert board members, the best research, and the largest network of practitioners in the HR outsourcing industry,” says Elliot Clark, CEO of SharedXpertise, the owners of the association and this magazine. “The broader focus will allow us to both serve this constituency and add new networks in other HR services and the important HR technology industry.“
Launched in 2003 when HR outsourcing was in its infancy, the group’s mission was to bring together members of the industry to network and share best practices. And while that
is still at the heart of the HRO Today Services and Technology Association, outsourcing is now a service delivery vehicle that is reaching second- and third-generation iterations, with growth triggered by experience, knowledge, and ever- changing technology. It’s time for the association to reflect the progress HR has made and act on it. Once a strictly administrative function, the path is moving more and more toward strategic service delivery.
The focus of the HRO Today Services and Technology Association is dedicated to:
• Professional development;
• Peer-to-peer networking opportunities; and
• Topical service and technology promotions.
The community is made up of HR executives and practitioners, providers, advisors, investors, and technology firms. There is a global advisory board providing insight and direction, and then there are three regional advisory boards to target specific geographies, including North America, Europe, Middle East and Africa (EMEA), and AsiaPacific (APAC). Bringing each component of the HR equation together allows members to earn an all-encompassing perspective on process.
“I think the unique thing about the HRO Today Services and Technology Association is that the association has brought together practitioners, advisors/consultants, and providers (services and technology) into one space,” says Kevin McDonald, vice president of BPO governance at The E. W. Scripps Company, and association member since 2007, holding the leadership role of vice chair. “The ability to gain perspective of folks representing all facets has been and continues to be valuable to me as a member.”
The association offers a platform for practitioners and providers to connect and learn from one another. “The [association] in Asia Pacific has provided a forum for Cartus and our valued clients in the region to hear firsthand from other HR outsourcing thought leaders and also to showcase and gain increased market visibility for our expertise and value proposition,” notes Rob Line, vice president of client services APAC for Cartus.
Jill Goldstein, Accenture’s global practice lead, talent and HR outsourcing, informs that the tone of the association is highly collaborative without any undercurrents of sales pressure or hidden agendas. She says that buyers and providers have real discussions about relevant issues and produce thought-provoking conclusions.
The content is designed to enable HR to elevate its workforce productivity. Best practices are shared through open forums, industry events, networking, and webinars.
“The ability to discuss issues with folks in similar industry, organizations of similar size, similar HR service delivery landscape has benefited me greatly over the years,” says McDonald. “You can always find someone you can relate to in some way and share successful practices, or non-successful experiences you can avoid.”
And the knowledge is transferable. “We have certainly taken some of the ideas from networking and discussions with other members forward into our own governance and operating procedures,” says Darren Bartholomew, head of HR planning and information systems for UK Selex ES.
Goldstein says that the association offers a channel for sharing and learning, as well as testing and developing ideas, which in turn plays an essential role in annual talent and HR strategy planning.
Networking events, including the annual HRO Today Forum North America, APAC, and Europe, are a path to exchange ideas and foster mutually beneficial relationships.
“Allegis Group Services finds the in-person networking opportunities to be the most valuable,” says Bruce Morton, head of innovation for the company. “At the annual Forum, we have the opportunity to step outside of our daily routine and connect with our peers on long-term goals, current pain points, and innovative ideas. The benefit of collaborating in-person ultimately generates long-term relationships and partnerships within every industry vertical.”
Valerie Egan, head of resourcing North America for Linde, has attended the HRO Today Forum North America for the past few years, and says the networking opportunities prove most advantageous. “Last year at the HRO Today Forum North America, a speed dating session was held for buyers to get to know each other and share issues,” she recalls. “I found this valuable because I made connections with peers who are experiencing the same things and I was able to pick their brain to see how they dealt with the same issues.”
“For 2014, our HRO Today Forums will bring the same content and discussions that are covered in the association’s Thought Leadership Councils, bringing better continuity of the right topics to the right audience,” says Faye Holland, global executive director for the HRO Today Services and Technology Association. “Our provider members will be able to host their own user group meetings while at the same time educating the market on the most salient content.”
While a broad HR education and knowledge sharing is offered through the HRO Today Services and Technology Association, the Thought Leadership Councils allow for members to zero in on issues directly applicable to their specific expertise.
“The Thought Leadership Councils allow participants to key in on particular areas of interest,” says McDonald. “The HR space is very broad and the ability to pick a specific area
to network, share successful practices, and help others is a great opportunity with the councils.”
There are seven thought leadership councils with the goal to drive professional development:
• Better practices
• Engaged workforce
• Evidence-based HR
• Talent acquisition
Bartholomew describes the Thought Leadership Councils as an open forum or think tank of sorts that encourages the exchange of ideas. Practitioners and providers alike can meet to discuss certain topics and share best practices in a relaxed and confidential setting, he says.
“The [Thought Leadership Council for Buyers] gives access to fellow practitioners on all stages of the HRO lifecycle, from those just starting out on the journey to seasoned buyers in second- and third-generation contracts,” he explains.
The HRO Today Service and Technology and Association also recognizes the good work of the HR industry every year through its awards program.
“Winning the Asia Pacific regional relationship awards for consecutive years has provided additional external recognition for Cartus in the region and illustrates the pride we have in our continually-advancing client relationships,” says Line.
This year the theme is Be Informed: Recognizing Great Business Outcomes in HR. HR knows that with proper budget and resources it can develop a business operating model and metrics to deliver a productive workforce and competitive edge. Nominations should demonstrate how HR drives the overall success of business through growth and profit.
Submissions are due Friday, February 28. The global winners will be announced at the award gala at the HRO Today Forum North America, and the regional award winners will be presented during the Forum program.
See the new HRO Today Services and Technology Association website for more information (www.hrotoday.com/association).
Full disclosure: In November 2013, the then trustees of the HROA voted to rename and reassign the association to HRO Today Services and Technology Association through the owners of SharedXpertise, who also publish this magazine.
Global Board of Advisors
- Jeanne MacDonald, Futurestep
- Jeff Croyle, ISG
- Jill Goldstein, Accenture
- Kevin McDonald, The E.W. Scripps Company
- Mike Andrus, Catholic Health Initiatives
- Rebecca Callahan, Randstad Sourceright
- Rick Haviland, Allegis Talent2
- Terrence, McCrossan ADP
- Denis Brousseau, IBM
Regional Board of Advisors
Europe, Middle East, and Africa
- Darren Bartholomew, Selex Galileo
- Gary Madden, BP
- Steve Riley, Accenture
- Seb O’Connell, Randstad Sourceright
- Phil Cooper, Allegis Talent2
- Sarah Seabury, ISG
The 2013 HRO market was alive with activity.
By the Editors
Reflecting back on 2013, it proved to be a growth year for the HR services industry. In fact, NelsonHall reports that HRO contract activity was up nearly 37 percent year-over-year. Our roundup includes 25 deals that deliver crucial services to help in the way organizations manage their talent
A new study reveals what problems haunt HR executives— and ways to solve them.
By The Editors
With the world economy still in sluggish recovery and headlines heralding mixed jobs reports, companies continue with tentative hiring, stingy salary adjustments, and too
few bonus programs. So the importance of people to the health and growth of organizations—and the professionals responsible for talent management programs—become even more important
Mark my words: 2014 is going to be the year of the candidate. Recently released research from CareerBuilder finds that 21 percent of full-time employees are on the market to land new jobs this year. This is the largest amount in the post-recession era—up from 17 percent in 2013—reports the survey
An HRO recap of 2013 and 2014 outlook.
By Amy L. Gurchensky
2013 had a slow start, but a strong finish and proved to be a successful year for HR outsourcing services, with HRO contract activity up nearly 37 percent year-over-year. At the end of the first half of the year, the outlook did not look favorable. But bubbling second-half benefits administration activity—particularly health exchange contracts—allowed 2013 to finish well.
Some highlights for 2013:
Payroll. According to NelsonHall’s HRO Market Forecast: 2013 – 2017, the payroll market is one of the largest and most mature HRO service lines, and it will continue to grow with
a low single-digit compounded average annual growth rate (CAAGR) through 2017. Approximately 80 percent of the payroll contract activity in 2013 was from the mid-market (organizations with between 500 and 15,000 employees). These deals typically involved a single country.
In addition to contract activity, there was a great focus on payroll expanding its global reach, particularly within Latin America and Asia Pacific.
• ADP acquired Payroll S.A., and expanded its Latin America payroll capabilities to Chile, Argentina, and Peru.
• CloudPay opened an office in Sao Paulo to expand its payroll capability in Brazil by partnering with Apdata.
• Safeguard World International opened a larger office in Mexico to support its growth; and
• Acrede launched an office in Singapore.
Recruitment process outsourcing (RPO). According to NelsonHall estimates, RPO is the fastest growing HRO service line with a mid-teen double-digit CAAGR through 2017.
One of the biggest announcements in RPO in 2013 was the merger of Pinstripe and Ochre House to deliver global RPO. Multi-country RPO activity started gaining some traction in the market in the second half of 2010. Contract examples include Manpower and Rio Tinto (Australia, Canada, France, South Africa, U.S., South America, U.K., India, and the Middle East) and FutureStep and Cummins Inc. (across 50 countries in North America, Europe, Asia Pacific, and South America).
Fast-forward to 2013, and multi-country activity accounted for nearly 25 percent of all RPO contracts. Manpower had two impressive contracts in terms of scope: One deal covered 37 countries across multiple continents, and the other covered 17 countries in Europe.
Although the Pinstripe and Ochre House merger wasn’t all too surprising since the two companies have been partnering since 2009, it is still big news as the combined companies now have RPO capabilities in 43 countries including the Middle East and North Africa, which Ochre House established through its acquisition of TAAHEED and Carmichael Fisher in 2012. Integration will take time, but once complete, the new entity will surely be a main contender for multi-country RPO.
Benefits administration. Benefits administration has been the main source of contract activity in the second half of 2013, particularly exchanges. By benefits administration service line, 2013 contract activity was distributed as follows:
• 52 percent health and wellness (H&W) services, including exchanges;
• 45 percent pension and retirement administration (DB and DC administration); and
• 3 percent flexible benefits administration.
H&W contracts include a variety of H&W services including H&W administration, reimbursement account administration, leave of absence administration, health exchanges, etc. Approximately half of contract activity in 2013 was for exchanges. A synopsis of exchange contract activity by vendor is as follows:
Within the pension and retirement administration market, DC administration contracts continue to make strides globally. In 2013, DC admin contracts accounted for nearly 65 percent of contracts; the remaining 35 percent was DB admin contracts, most of which occurred in the U.K.
Outside of reimbursement account administration and exchanges, partnerships and merger and acquisition (M&S) activity within benefits administration was fairly distributed among the other service lines.
WageWorks started 2013 by acquiring Benefit Concepts to strengthen its reimbursement account and COBRA administration capabilities. Later in the year, Towers Watson and Ceridian both established partnerships with WageWorks:
• Towers Watson for health account administration including HRAs and HSAs for its private health insurance exchange; and
• Ceridian transitioning its existing nearly 18,000 reimbursement account admin clients to WageWorks who will then provide administration for FSAs, HRAs, HSAs, commuter benefits accounts; Ceridian is also transitioning its cafeteria plan/premium only plan business to WageWorks.
• Even though health exchanges are a fairly new offering in the market, partnership and M&A activity began
in this area as well in 2013. On the partnership front, activity was focused on retiree exchanges:
• Fidelity partnered with Extend Health, a Towers Watson company to provide retiree healthcare services.
• Aon Hewitt partnered with National Council on Aging to provide seniors with access to find affordable healthcare and prescription drug coverage through Aon Hewitt Navigators.
On the private exchange side, Guardian partnered with Liazon in July to offer a private benefits exchange, and in November, Towers Watson announced its acquisition of Liazon for $215m to enhance its exchange offering, adding Liazon’s private benefits exchange for active employees to its exchange portfolio.
Multi-process HRO (MPHRO). The MPHRO market has been relatively quiet the last few years and 2013 was no exception. While there hasn’t been significant news, the market is still growing slowly, but surely. New MPHRO contracts are still being awarded, and in 2013 they came from many different regions including the Nordics and the Middle East.
Single-country MPHRO contracts outpaced multi-country ones as did mid-market deals versus large market ones. The use of Workday is also increasing in MPHRO deals, namely by Aon Hewitt after its acquisition of OmniPoint Workday Solutions in late 2012.
Learning. The learning market has arguably been the slowest HRO service line to recover from the recession. Nevertheless, organizations are investing in learning again, and 2013 had the highest growth rate since 2007, driven by the need for job skill training and talent development.
In the past few years, the majority of learning contract activity has been from the public sector, but private sector activity picked up in 2013, and in multiple geographies. For example:
• Raytheon was awarded a multi-million dollar learning BPO contract by General Motors in Korea.
• Xerox was awarded a five-year learning BPO contract by OMV in Austria.
• GP Strategies was awarded a multi-year global learning BPO contract by HSBC.
• Infosys was awarded a two-year learning BPO contract by a multi-national pharma and biologics company in the U.K.
NelsonHall’s latest Targeting Learning BPO market analysis report also found that while selective-learning BPO contracts outnumber full-learning BPO contracts, there has been a resurgence for full-learning BPO contract since mid-2012, as evidenced by the above examples as well.
2013 also had several acquisitions in the learning space with nearly 80 percent focused on strengthening learning offerings including:
• Capita acquired KnowledgePool to enhance its managed learning services.
• Xerox acquired LearnSomething to strengthen its custom e-learning services and consumer education to the food, drug, and healthcare industries.
• GP Strategies in particular had a very busy year with partnerships and M&A’s for its learning offering. The company:
– Acquired Lorien Engineering Solutions to expand its learning services capabilities in the U.K. and Poland;
– Acquired Prospero Learning Solutions to strengthen its learning content development capability in Canada; and
-Partnered with Information Technology Senior Management Forum to launch an innovation and creativity learning portal.
Spotlight on 2104
Ways companies are improving employee living conditions.
By Jeffrey Puritt
Business process outsourcing (BPO) first arose out of the need for companies to stay competitive by cutting costs. This was often achieved by taking existing operations and transplanting them to a country where it was cheaper to operate. Unfortunately, corporate responsibility (CR) in that other country was often not high on the priority list
3 steps to make the ADA’s interactive process go more smoothly.
By Kevin Curry
The Americans With Disabilities Act (ADA) has presented an ongoing administrative challenge for employers since it became law in 1990. The passage of the ADA, which afforded Americans living with disabilities strong protection from discrimination, created a new level of complexity and cost for employers
Industry standouts are recognized for blazing their own trails.
By The Editors
“Do not follow where the path may lead. Go instead where there is no path and leave a trail.”
Such motivational words from American author Harold R. McAlindon are the hallmarks of good business leaders. How can a market and industry progress if not for strong leadership? Our 2014 Superstars Directory highlights HR luminaries and their accomplishments that are shaping the industry
Insight from a practitioner that led a major global transformation.
By Debbie Bolla
Norman Ross has an interesting view of HR operations from his side of the desk. The global vice president of HR shared services for Motorola Solutions Inc. recently led the HR part of the separation of Motorola’s Mobile Phone business from Motorola Solutions when both organizations became independent companies in January 2011. Since then, he has helped drive the transformation of the global HR function through a two-year project in more than 63 countries and 23,000 employees—details below.
How did you vet Aon Hewitt? What was the process around that selection?
We spent the early part of 2011 looking closely at our HR service delivery model, being clear on what we would outsource, what we would retain inside, and agreeing how we wanted to deliver services to our employees around the world. Once we were clear on that, we ran a very rigorous request for proposal (RFP) process where we invited five of the major global HR BPO providers to discuss what they could do. We were coming to the end of a 10- year arrangement with ACS Xerox and we knew the HR BPO market had changed significantly during that time—as had our business model. So it was important that we took a fresh look at everything we were doing and make sure that we found an organization that we could develop a strong partnership with and drive a much more standard approach to our “back office” administration and frontline services we offer employees.
We involved the broader HR organization in the RFP process ensuring we had a good representation from around the world. We found that Aon Hewitt was able to meet our requirements in terms of quality, cost, and service. In addition, as we’d gone through the RFP and contracting processes we found that Aon Hewitt fit very well with our culture and values, making them a good fit for us as a long-term partner that we could work with to continuously improve the way we deliver HR services.
The partnership aimed to improve your organization’s HR portal, payroll system, and performance management processes. Why was this the case?
How HR metrics correlate to business outcomes.
By Elliot H. Clark, CEO
Huh? Do we even know this?
Actually, we do. We just completed a study showing a correlation. This study was presented last week at the HRO Today Forum Europe in London and pleasantly surprised the audience. The study originally grew out of a conversation with the leadership of Alexander Mann Solutions, the top-rated provider on the HRO Today Magazine’s Baker’s Dozen RPO Customer Satisfaction Ratings. They have been developing a pricing strategy that would tie recruiting department or RPO performance into business outcome such as sales, customer satisfaction, employee productivity or profit. The issues HRO Today raised: how many HR departments collected recruiting and operational data, and how many of them actually used it. In addition, would we find that using the data improved a company’s business outcomes and was it measurable? AMS agreed to sponsor a significant research study to examine this issue.
We surveyed 381 companies. It was a global survey and the company headquarters were distributed throughout North America, EMEA and APAC (where RPO has a broader definition, but recruiting metrics are kept in a pretty similar fashion). The results was analyzed and we found a number of interesting things. First of all, most companies are collecting data. In fact, 89 percent of companies collect talent acquisition data (time to fill, cost per hire, funnel metrics), but only 38 percent of companies believe they use it effectively to improve operations. Most of the reason is lack of time or resources to analyze the data if they have it.
We found the same reasoning and trends on employee performance data. Of the companies surveyed, 91 percent collect the employee performance data to track quality of hiring, but only 51 percent feel they use it effectively. The same reasons emerged as the cause: lack of time and lack of dedicated resource. This group also complained about disparate systems that do not integrate, which is another thorn in the paw of most HR departments.
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