Three big trends sure to shake up HRO practitioners. Learn how to take advantage of these.
by Andy Teng
I got an e-mail the other day from a benefits consultant seeking sourcing advice. This person was looking for a provider capable of supporting a mid-market client on a specific platform who could deliver additional services such as HR administration and more in the New York City area. I get quite a few of these types of e-mails and calls. Sometimes I’m able to direct them to vendors who seem like a good fit; other times, the requests are a bit esoteric.
What fascinates me is that in this free-flowing information age, in which you can Google just about every kind of topic to your heart’s content, there is still lots of confusion about vendors. Sure, many calls come from small and medium businesses that don’t have deep domain knowledge or a robust procurement function, but I’m often surprised by the lack of market comprehension.
“Where can I find a regional provider?” “Are there vendors who can integrate with my HRIS?” “How many employees must I have to justify outsourcing HR services?” are typical questions sent my way. One question in particular always grabs my attention: “Do you know of any providers who have experience in my industry?” That one can be a head-scratcher.
As many in the HRO industry know, vertical expertise can be a great door opener for providers. Employers want to be assured that their vendor is sensitive to unique needs, and nothing confirms this better than prior industry-specific experience. The industry needs to more aggressively publicize new deals, to show that buyers of all ilk are investing in outsourced HR services. By demonstrating their vertical expertise, providers can help assuage prospects of their fears around outsourcing.
What’s the best way to spread the word about client wins? We can help. I often encourage providers and buyers to share their successes with the rest of the industry, whether that’s a global implementation or a point solution. All of our readers like perusing case studies that explain how a particular HR leader alleviated his or her pain points through an outsourced solution. They serve not only as reassurances but also as roadmaps on how to get started in HRO. Also, announcements about new deals help reassure fence-sitters that HRO is not a fad and remains a healthy practice benefitting companies of all sizes. During the past few years, the number of enterprise, multi-process deals has declined significantly, but many smaller and point-solution contracts have been executed during that time, and our readers want to learn about these contracts.
But one of the biggest challenges for the market is that buyers often impose nondisclosure agreements on their vendors because they fear publicizing outsourcing, so many of these deals are executed under discretion. This regressive way of thinking is what continues to keep outsourcing a seemingly dirty word, even though HRO has become widely accepted throughout the world. Openly discussing the merits of outsourcing—the transformational and cost-savings aspect—demonstrates that the practitioner is proactive about improving operations within his or her organization and a progressive way of thinking. It also shows that the HR leader is not a protectionist whose only interest is to preserve his or her fiefdom.
Certainly there are times when legitimate reasons arise that prevent buyers from openly disclosing their outsourcing deal, but these are rare occasions. I urge all industry stakeholders to more openly publicize their deals because sharing this information neither poses any competitive dangers or reflects badly on the practitioner. Rather, it conveys to the rest of the business world that HR understands the stakes these days and actively wants to be at the table to help senior business leaders resolves their challenges.