Shared Services

Mid Market in Driver’s Seat – 7/11

Midsize companies will generate 70 percent of all job growth in 2013.
The United States middle market represents more than one-third of both the U.S. workforce and non-government U.S. GDP, but it is far outpacing those proportions in job growth. The National Center for the Middle Market (NCMM), located at the Ohio State University’s Fisher College of Business, has released data that projects that organizations with annual revenues between $10 million and $1 billion will account for 70 percent of all job growth nationally in 2013

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The Blame Game – 7/1

Recent research shows that many employees ‘pass the buck’ to avoid responsibility.
A new survey from AMA Enterprise reports that 25 percent of the United States workforce is risk-averse and actively tries to duck responsibility. AMA Enterprise surveyed 562 executives, managers, and employees on the topic of “what proportion of your employees seek to avoid responsibility.” The results were somewhat staggering. Almost a quarter of respondents (24 percent) estimated that 10 to 20 percent of their workforce shirks responsibility

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Top Relo Locales – 6/28

A new report outlines where big business is worldwide.
Leading the list of top relocation destinations are the United States, the United Kingdom and China finds a new report from Cartus Coporation. The Top 15 International Relocation Destinations & Intercultural Business Tips for Career Survival is based on data from more than 64 percent of the Fortune 500.
The top destinations are:
1. United States
2. United Kingdom
3. China
4. Germany
5. Switzerland
6. Singapore
7. Canada
8. India
9. France
10. Hong Kong
11. Netherlands
12. United Arab Emirates
13. Japan
14. Australia
15. Italy


Marriott Vacations Leveraging ADP – 6/27

Marriott Vacations Worldwide’s 9,200 employees will receive core HR, payroll, time and talent management assistance from ADP.
ADP will deliver its large market Human Resources Business Process Outsourcing (HR BPO) offering to Marriott Vacations Worldwide. ADP is managing core HR, payroll, time and talent management functions for the company’s 9,200 employees. Marriott Vacations Worldwide selected ADP for its ability to provide a global solution and meet the necessary ramp-up time frame following the company’s successful spin-off from former parent company Marriott International, Inc.
“We conducted an extensive search for a comprehensive HR outsourcing solution and feel that ADP will be a great match for not only our culture but ultimately a greater value in efficiency,” said Michael E. Yonker, executive vice president and chief human resources officer at Marriott Vacations Worldwide Corporation.

Procurement Outsourcing On Its Way To Double-Digit Growth – 6/27

Everest Group’s new findings are very positive for PO.
Investments in new technologies and buyer appreciation are driving the procurement outsourcing (PO) market forward reports Everest Group.Since 2007, the PO market has maintained an 18 percent compound annual growth rate in terms of Total Contract Value (TCV), and service providers are embracing expertise and technology driven strategies to maintain that double-digit pace.
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Kenexa May

The Launch of Pontoon

Adecco Group, the worldwide leader in HR services, announced the launch of Pontoon, Adecco’s unified global contingent workforce solutions (CWS) and recruitment process outsourcing (RPO) organization.
Pontoon is the 2012 combination of Adecco Group’s Beeline Managed Service Provider (MSP) and Adecco Solutions business lines into an independent global CWS and RPO organization, providing true workforce acquisition and management solutions through both contingent and permanent industry expertise

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Onward And Upward

Buyers’ confidence and technology will push the industry forward.

By Linda Merritt
As HRO reaches a new level of maturity, there is growing acceptance on many fronts. There is less perceived risk in the decision, value is balancing the focus on cost, and pent up technology needs will be opening the door to new service provider opportunities. Great things are bound to happen in 2013.
• Value and cost are reaching parity for many buyers. There is more customer “pull” for delivered value to the business. This is a nice switch from providers “pushing” the issue of value over the lowest possible price. Clients want agile new HR capabilities that produce results, including the ability to measure and manage HR issues across the enterprise, as well as improved employee experience.
• Budgets for technology will actually increase. Pent up technology needs, after several lean years, the need for core human resource management system (HRMS) upgrades and new technology should actually reach the point of increased budgeted spend. Be ready to for discussion on upgraded and bolt-on additions versus if a new core HRMS is the better path for increasing business impact while addressing the total cost of ownership.
• Facing major technology costs will open the door for organizations considering SaaS. As SaaS offerings move “up stack,” there is and will be a call for business process outsourcing (BPO) service support. The SaaS ecosystem for SaaS support will continue to develop in 2013 through consulting, implementations, integrations, and BPO.

There is little large-market HR enterprise resource planning (ERP) systems near term erosion from cloud-based SaaS HRMS. Near term erosion is the key phrase since cloud-based SaaS HR platforms are disruptive technologies and as such, will quickly move up the value chain to be able to serve larger and more complex organizations. In the meantime, SaaS HRMS adoption will move fastest for mid-market organizations.
Total cost analysis—not just system costs—will be important in the adoption of SaaS HRMS in larger organizations where ERPs are still less expensive on a per user basis. Over time that pricing advantage will disappear, especially if evidence continues to mount of better performance and lower overall costs.
• Social media and HR analytics will be emerging HR technologies. While not having yet reached breakthrough, there is increased interest in how to deploy the newer tools strategically. Look for adoption to slowly build as clients need a certain level of maturity in systems, services, and vision to create real value with the newer HR technologies.
• The word for 2013 is convergence. It may be a bit early to pick a HRO word of the year, but I think convergence will be a good candidate. Many elements are in play at the same time, including changing client needs and new and emerging technologies. Where, when, and how do we bring together the old and the new to create new synergistic capabilities? What can we do with a fully integrated HRMS with HR analytics? How can we change the delivery of services with strategically deployed social media? Can we bring new magic to the employee experience with mobility and social tolls?
As choices increase and grow more complex, confusion and inaction may result. With clear purpose, planning, and great advice and counsel the opportunity is before us all to create a real breakthrough year for HR and HRO.
Linda Merritt is research manager for NelsonHall.

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Tech in the Driver’s Seat

Solutions that streamline and create efficiencies will lead the way in 2013.

By Bill Glenn
From increased adoption of more sophisticated technology to more reliance on the cloud, this year has been a tremendous time for growth and innovation in the HR industry.
As we look ahead to 2013, here are some of the emerging trends we can expect to see as organizations continue to scale in size, become global in nature, and consider cost in the current economy

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Maximizing Human Capital

HR still has a ways to go.

By Russ Banham
What is human resources today—its role, responsibilities, and organizational clout?
For several years running, arguments have been made that HR has a high-level, strategic purpose: Maximizing human capital assets to achieve the organization’s planned goals. In this quest, the head of HR has a seat at the C-level strategy table and sits on the board of directors, influencing the company’s direction, given his or her singular knowledge of current people assets and skills, where there are gaps, and possible future needs.
Are we there yet? The answer, by and large, is no, according to several deep-thinkers on the subject. While the promise of HR outsourcing is closely aligned with this lofty ideal, by liberating HR from mundane functional tasks to focus on more strategic talent objectives, HR still has a ways to go to maximize their companies’ human capital.

“Some larger companies have gone through the transformational changes required, but there are still massive gaps between large companies that get this and genuinely believe in it, and those who have yet to scratch the surface,” says Margaret Spink, managing director, at HRO provider Xchanging HR Services in London.
This is unfortunate on several levels. In the current war for talent, companies need someone to lead the charge. This point was brought home back in 2008, when a McKinsey & Company survey indicated that 59 percent of organizations do not spend enough time on talent management. “Companies like to promote the idea that employees are the biggest source of competitive advantage,” the authors of the study stated. “Yet, the astonishing reality is that most of them are as unprepared for the challenge of finding, motivating, and retaining capable workers as they were a decade ago.”
Arguably the same still holds today. What has changed in the interim is intensifying competition for talent. According to a 2012 CareerBuilder survey of more than 3,000 hiring managers and HR professionals in diverse industries, 30 percent of employers lost their top talent to other organizations last year, and 43 percent are concerned about losing these high performers this year. “As a community, the HR sector has struggled to maximise human capital assets,” acknowledges Jill Goldstein, global offering lead of human resources BPO at consultancy Accenture.
Others agree. “We’re far away from where HR should be to create value out of human capital,” charges Jan-Pieter Janssen, director of global BPO solutions at consultancy Logica in the Netherlands. Assessing and measuring human capital outcomes is still elusive, as is the ability to understand how investments in talent will generate value, he maintains.
Steve Foster, business consultancy manager in the London office of HRO provider NorthgateArinso, posits an even more pessimistic view. “There was a time when human capital management almost became part of company lore, but it now seems to have disappeared,” Foster explains. “There was all this excitement about it, but for whatever reason people drifted away from it. That said, I do think it will make a comeback.”
Role of HR
As part of this hoped-for comeback of human capital maximization, the role of HR requires revisiting and new appreciation. There are both customers of HR and consumers of HR; understanding the differences is important to delivering on each.
The customers of HR are those purchasing goods or services from the organization—the client, in effect, “buying” the organization’s human capital to drive its objectives. The consumers of HR are anyone using the organization’s HR services, such as job candidates, employees, line managers, recruitment agencies, contingent workers, senior executives, suppliers, and so on.
The role of HR is split between serving these two constituencies. Assisting the superior performance of each duty is HRO, yet even the most robust outsourcing services will not maximize talent assets without HR itself enjoying a more strategic purpose. “I see companies talking the language of HR being a strategic partner, but not walking the walk,” says Janssen. “Many HR directors are not achieving what their organizations are promising.”
Obviously, having the right employees putting their shoulders to the right tasks is vital to winning in the marketplace. And the way towards achieving this balance is to charge line management with this responsibility, aided and abetted by HR and the technological tools at its disposal. As Spink sees it, “HR provides the information, processes and policies to enable line management to do what the business needs to do. And to have this, it requires a senior enough HR person to jointly share this responsibility with managers.”
The other experts agreed that line management has the ultimate responsibility for human capital asset management. But, since managers also are tasked with growing the business and managing operations, they must rely on specialists to advise them. Among these specialists, says Goldstein, is HR, “their business partner on human capital asset management, counseling them and influencing their thinking.”
“HR is the hub for creating a framework for the rest of the business in understanding and defining the key metrics governing talent objectives,” says Foster. “In the absence of that, line management will just do what they do–merely manage people.”
Janssen concurs: “HR must facilitate standardization across the company through the use of HR technology. Line management owns the results, but HR needs to facilitate it.”
Taking a Seat
Impeding the ability for HR to make good on this service to and relationship with line management, or at least to achieve some sort of shared approach to human capital maximization, requires a faster evolution in the role of HR within the organization.
“The HR sector has emerged from a personnel function, whose focus has historically been administrative. Asserting responsibility and swimming upstream continues as the natural progression of HR, but one met with ongoing resistance by the business,” Goldstein explains. She adds that the natural progression of HR continues to be met with ongoing resistance by the business.
Another complication is that HR has responsibility for delivering outcomes that are accomplished outside the scope of its influence. “Improvements in workforce performance and productivity are realized and measured outside of HR,” says Goldstein, pointing to the payroll expense line of the business operations as an example.
Would elevating the director of HR to C-level status and a board director position change the status quo? “It’s a raging debate that continues—whether or not HR deserves a seat on the board or at the strategy table, in a sense a right to be in the inner sanctum,” Foster comments. “My best answer is, `It depends.’ As long as human capital has a voice in one way or another, whether through HR or some other channel, to me that is more important than the medium.”
Janssen doesn’t couch his response to the question. “The head of HR should sit on the board—yes,” he says. “Most companies spend roughly half their expenses on labor, depending on the industry, with some more and some less. Obviously, human capital is such an important component of the P&L [profit and loss] that someone on the board must own it. I’ve seen the CEO, the COO, and the CFO have pieces of this ownership, but no one with sole responsibility.”
He finds this shared responsibility to be wanting. “I’ve always felt it is strange that here we have one of the biggest components of the P&L, and no one in the organization is solely on the hook for it,” says Jannsen. “I can’t get my head around why companies feel it is not necessary to have someone lead, manage, and maximise their people assets. Someone on the board should be in charge, and that someone should be [the head of] HR.”
Spink unequivocally agrees. “The HR director absolutely should be a board director,” she says. “They need to have equal weight and to be seen as a strategic partner. They’re not just an administrator sitting on the other side of the fence, they’re enablers of strategy. How can you influence strategy if you’re out of the room?”
She maintains that the HR director at Xchanging has this strategic purpose and role. “She comes to the board meetings, which are all about strategy and what we’re trying to achieve as a business, and how she can help this,” Spink says. “Can we enable it with a series of people activities? Are there cost-reduction elements to the strategy, such as achieving lower headcount numbers while maintaining the quality of service? Or what are the human capital aspects of achieving entry into a new area of business? This is what an HR director should be doing.”

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