Value, Discounts, and Group Therapy


A sneak peek at our 2011 HRO Today Summits.

By Elliot Clark
We are hosting the 2011 HRO Today Forum May 24th to May 26th in Las Vegas, NV. The HRO Today Forum is a combination of our successful HRO Summit, RPO Summit, HR Demo Show, and a new summit on Managed Service Programs called the “MSP Summit.”
We moved the summits to Q2 because most of you are evaluating your options for 2011 and beyond in Q2 and preparing RFI and RFP requests for release at that time of year. We also recognized that many of you did not want to travel in the fourth quarter. We also are going to cover all operational aspects of managing the “HR-Powered Enterprise.” We all know that people are the key to success in any organization and that HR is responsible for talent quality and strategy. We also recognize that outsourcing is one of several operational models to consider, and we will offer educational content on how to weigh the various options and, more importantly, how to manage HR in a complex enterprise.
Our new MSP Summit covers the emerging product of Managed Services, through which mid-size and large companies can hire a single partner to manage all of their contingent labor providers under a master contract. In a world where some companies can have as much as 35 percent or more of their workforces as contingent workers, the ability to have a single provider to control costs, enforce standards, and manage flow of funds offers real value. While many of these programs have been initially contracted by procurement departments, Chief HR Officers I have spoken to have immediately pointed out the strategic nature of MSP and the need for HR to manage the relationship with the MSP provider who will be employing such a large component of the workforce. They see MSP as strategic, not financial. This is also an opportunity for HR to control the previously out of control hiring processes for contingent workers, rather than just cleaning up the mess later. It also is an area where a company can save millions if not billions with better oversight, and HR will want to be able to demonstrate that business value to the organization.
There is a dynamic tension, however, in any area of HRO—or sub processes such as RPO or MSP—between the procurement financial agency and the HR value driven approach. I have heard about one RPO program recently contracted that operates under a financial construct that it is not “likely” to fail. It will certainly fail. I cannot imagine why a provider would agree to it and why a company would want a provider that would agree to it. But my understanding is that HR was not driving the final selection process. Here is a sentence that sums up this problem, based on my experiences and observations. HR buys value, and procurement buys discounts.
It is not that procurement professionals are bad people. They are not. They are, in fact, doing their jobs. The issue revolves more around the domain expertise required to appraise value. The mission of most procurement departments is to drive cost to the minimum. However, that can have negative consequences. In recruiting (my background), for example, the best way to reduce your recruiting budget is to fail to fill the jobs. Which is hardly a recipe for success if you are the head of talent management or recruiting. When sales forecasts or production quotas are missed, you get fired.
For too long, the training and conference content available to procurement departments has been different stream and path than what is provided to HR. We intend to offer content to both groups at our event. For MSP, in particular, and for other areas of HRO, this is important and a form of “group therapy.” We need procurement to develop more domain expertise and be able to appraise value. They need to be able to communicate more effectively in the language of HR and be able to differentiate between what is a good discount and what is a failure in the making, so that they can be an effective partner in the sourcing process.
We have some great keynotes lined up, and we are excited as these will be the best events we have ever presented. And with a little group therapy on the difference between value and discounts, we can all communicate a little better. Please register now at
Elliot Clark is CEO of SharedXpertise.

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

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