Multi-process HRSourcing

10 Mega-Themes for HRO World 2005

10 trends worth betting your career on.

by Jay Whitehead

My favorite lazy-mans editorial practice is numerology. Thats the cheap journalistic trick of The Top XX List. Stop by any newsstand to check it out. Every title has its own version of The 24 hottest ways to tighten those flabby buttocks. I am a numerology addict. As a result, this magazine shares my addiction, in the form of Top HRO, Payroll, and Benefits Deals lists and rankings like our Bakers Dozen. Fortunately, numerology is a cheap trick that everyone loves. Need proof? Look in the mirror. You have just read this lame lead paragraph just to see the 10 trend pay-off.

 

1. No more election-year grandstanding. At HRO World 2004, we hosted more than 100 bullhorn-toting protestors, preying on the CNN/Lou Dobbs/ Presidential Election media frenzy surrounding outsourcing. At HRO World 2005, there will be plenty of media attention. Just no grandstanders.

 

2. Its the SLA, stupid. The HRO Superstar analyst Philip Fersht from The Yankee Group notes in his March 1, 2005, report on PeopleSoft that users are unlikely to switch, despite the Oracle acquisition, as long as the Service Level Agreement (SLA) stays intact. Similar surveys of HRO clients say the same thing. Both HRIS and HRO are all about the SLA.

 

3. Bigger is better. To rip off Robert Duvall in Apocalypse Now, I love the smell of consolidation in the morning. Exult-Hewitt. SynHRgy-Mercer HR. EDSTowers Perrin. Convergys-DigitalThink. There will be more, for one reason: Clients love deeply-staffed, incredibly reliable, well-capitalized providers.

 

4. Transparency. In restaurants, chefs open their kitchens so diners trust the food. Starting in 2005, HRO providers will open their kitchens, showing price and service transparency. Imagine: prices online. Heck, even PeopleSoft will get in the act, abandoning its mysterious value-based (read: extortion) pricing in favor of a headcount-based price list posted openly on its Web site.

 

5. HRO clients are worth fighting for, because they are far more loyal than those notoriously fickle ITO buyers. Again Ill cite Yankees Philip Fersht: HR clients are far less likely to switch products or services than their IT, CRM, or Finance and Accounting Outsourcing (FAO) counterparts. (HR clients loyalty to PeopleSoft is the best example.) While HRO providers still suffer client acquisition costs for the average HRO (nonpayroll) client that often exceed two years revenues, the providers still pay the price, because they know that once an HRO client is on board, chances are high that they never leave.

 

6. Extreme partnering. Partnering of Tier 2 and 3 (non-enterprise) HRO providers with Tier 1 providers now resembles the X-Gamesthose death-defying made-for- TV contests involving crashing motor bikes and ski-jumping over jagged rocks. Tier 2 and 3 providers are going to extreme lengths to prove themselves to Tier 1s. I know five Tier 3 providers whose Tier 1 partnering efforts are worthy of Evel Knievel.

 

7. HRO cost savings are good, but healthcare cost savings really rock. With corporate healthcare costs running $7,000 per person, versus $1,400 per employee for HR costs, CFOs are looking for help. HRO providers are waking up and smelling the money.

 

8. Unions enter the HRO zone. Keep an eye on Andy Stern, the head of the nations-largest union, the 1.8 million-member Service Employees International Union. He is the first U.S. union leader ever to actively espouse partnering with employers. And he is outsourcing friendly to boot.

 

9. The Apprentice: If you think Donald Trump is hot, just wait for the Martha Stewart version. Nick Warnock, a star of The Apprentices first season, joins HRO World this year. Nicks show averaged 16 million viewers on NBC. But just wait until The Donald passes The Apprentice gavel to Martha. Nicks numbers will look quaint.

 

10. Ignore employee data security at your own peril. Only mega-trends catch former Pepsi and Apple Computer CEO John Sculleys attention. Thats why his keynote speech intrigues me so much. He put his money and name on the line for a new employee background checking firm. And with the headlines filled with Homeland Security and Checkpoint data issues, Sculley is definitely on to something big.

 

See you at HRO World. Rest assuredthese 10 career making trends await you.

Tags: Multi-process HR, Sourcing

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