BenefitsEngaged Workforce

The View of Enterprise Buyers

s the organization representing the industry’s largest HRO buyers, the Buyers Group is also one of the most important affinity groups.

by LeAnne Andersen, Cynthia DeFidelto

The landscape and nature of HRO arrangements and what organizations expect to achieve have changed dramatically in the few years since large-scale engagements have become a viable and effective HR service delivery option. Because HRO is relatively new and offers a compelling option to organizations looking to improve costs, service delivery, and quality, it has attracted a significant amount of attention and interest during the past five years in particular.

In late 2003, more than 30 organizations engaged in large-scale HRO deals joined Towers Perrin’s first research study of HRO effectiveness. The study was designed to measure the perceived success of outsourcing arrangements and how effectively they delivered on HR goals, as reported by the outsourced companies themselves. The research, repeated regularly, has shown outsourcing as a service delivery option in transition—capable of achieving service delivery goals in particular areas such as satisfaction, cost, and efficiency, yet falling short in certain transformative aspects such as shifting time to strategic HR activities.

At the outset of the HRO effectiveness research, any organization that participated in the study was subsequently invited to join an informal group of other research participants to discuss their early experiences with outsourcing. These “pioneers,” all of whom managed large-market HRO relationships in which six or more processes were outsourced to the same vendor, initially came together in Philadelphia in May 2004, and the HRO Buyers Group was formed.

The HRO Buyers Group today is a self-managing, self-governing group of individuals responsible for the operations and delivery of HRO arrangements in their organizations. With about 65 active members from 45 organizations, the group meets twice annually to share ideas, report on successes, and address challenges and questions related to their HRO arrangements from a variety of perspectives, including delivery, governance, and outsourcing’s impact on the people within and outside of HR. Meetings feature self-volunteered case studies from participants in all stages of their HRO arrangement, group discussions of universal challenges and innovative ways to address these challenges, review of current HRO trends and research, and guest speakers to provide an outside perspective.

The group is counseled on antitrust compliance and is prohibited from discussing contract terms, vendor arrangements, and other topics relative to the financial or contractual terms.

In addition to meeting regularly, the Buyers Group provides “the voice of the buyer” to the HRO industry and to organizations contemplating outsourcing. Members speak regularly on specific topics relative to outsourcing and share both their collective and individual experiences. In the past year, the group has had the opportunity to address audiences in the U.S. and Europe. Members of the group also share responsibility for a regular column in HRO Today in which they address a particular aspect of the HRO arrangement in each column.

The organization seeks to achieve a better understanding and an improved outsourcing experience by sharing their ideas, learning from their peers and providing a supportive network of colleagues responsible for delivering HRO in their own organizations.

To be eligible for membership in the HRO Buyers Group, organizations must meet the following criteria:

• Have a signed HRO deal (does not need to be fully implemented);
• Have 10,000 or more employees;
• Have six or more HR processes outsourced to the same vendor; and
• Participate in the research study.

While the organization may decide what level of representative(s) to participate in the Buyers Group, most are at a vice president, director, or other senior level, and all are directly responsible for the operation and success of the HRO arrangement in their organization. All representatives must also participate in the affiliated HRO effectiveness survey to ensure a consistent approach to the group discussions.

The next HRO Buyers Group Summit will be held in Chicago on June 3 and 4, and a comprehensive agenda is planned. HR buyers interested in joining the group and attending the June summit can contact one of the following individuals: Cynthia DeFidelto (cynthia.defidelto@towersperrin.com); LeAnne Andersen (leanne.andersen@bestbuy.com); or Jennifer Ilko, HRO buyers group program manager (jennifer. ilko@towersperrin.com).

Tags: Benefits, Engaged Workforce

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