Decision-making in HRO

The latest Yankee Group survey reveals savings are not the leading criteria for choosing service providers.

by Jason Corsello

For the past two years, the Yankee Group has surveyed a wide range of C-level and HR executives to better understand their decision-making process for HR BPO services. The resulting data, presented in our HR BPO BrandMonitor Survey, outlines major trends and drivers influencing enterprise HR BPO investment decisions and provides insight into the various providers shaping the market. This year’s survey produced some compelling findings that showcase the attributed brand characteristics of the respective vendor landscape and provide a toolkit to help enterprises navigating the HR BPO decision-making process.

As vendors can substantiate, HR BPO buyers are becoming more sophisticated and demanding on their chosen provider. Increasingly, enterprises of all sizes and industries are focusing on quantifiable, service-based benefits of HR BPO that complement and extend the presumed cost-saving capabilities. The recent BrandMonitor survey identified a dramatic shift in enterprise priorities for HR BPO engagements.

For the first time, service excellence for employees surpasses cost-saving capabilities as the most important performance criteria of a provider. In fact, many enterprises already presume at least 20 percent cost savings from their HR BPO provider and have shifted the focus to qualifiable, services-based benefits and performance standards. In addition to service excellence, high integrity and domain expertise ranked among the most important performance measures of an HR BPO provider.

Many companies, especially those in highly visible, consumer-oriented industries, spend millions of dollars crafting favorable brand perception. Although many HR BPO vendors do not have large marketing budgets available for branding, positioning, and advertising, positive brand awareness is a critical factor of vendor success in the decision-making process.

The latest HR BPO BrandMonitor survey outlines more than 22 brand characteristics, including intensity of preference, behavioral intention (see Fig. 1) , awareness and familiarity, differentiation, satisfaction, and recommendation of vendors. Among the findings, many service providers are beginning to identify themselves in terms of recognized capabilities, brand perception, and service delivery excellence. A sample set of the findings includes:

  • IBM, ADP, and Hewitt ranked as leading providers when it comes to favorite or considered HR BPO service provider.
  • Accenture, ACS, and Hewitt ranked highest in terms of scope and flexibility of service offerings.
  • ExcellerateHRO, AON, and Convergys ranked as the leading providers when it comes to satisfaction and recommendation of an HR BPO service provider.

In addition to understanding brand attributes and buying process metrics, the survey found that 48 percent of the companies polled are currently exploring outsourcing options. These companies also expressed the strength of corporate brand equity as a key factor influencing their selection of a HR BPO vendor.

Brand perception will become an increasingly important factor in the HR BPO decision-making process. In emerging markets such as HR BPO, branding requires careful nurturing and a commitment to superior customer service.

The BrandMonitor Survey canvassed 300 C-level and HR executives from a large mix of companies ranging in revenue from $100 million to $40 billion in more than 29 vertical industries.

Tags: Consultants & Advisors, HRO Today Global, Professional Contribution

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