Multi-process HRSourcing

Hitting the Ground Running

In helping one of the HRO leaders stay ahead of competitors, ADP’s Hogan is also helping the entire market mature more quickly.

by Jolie Newman

How does a young man from the woodsy, comparatively industry-barren Adirondacks region of Upstate New York become the leader of a divisional sales organization in a $9 billion corporation? If you’re Mike Hogan, ADP’s division vice president of sales and business development, Comprehensive Outsourcing Services, you do it with the same innate attributes of deliberate thought and action lauded by peers, clients, and colleagues alike.

Hogan, a well-recognized face in the HRO industry for both his leadership at ADP and his contributions to trade groups such as the HRO Association, is one of the stars in the provider community. The 44-year-old recently spoke with HRO Today to reflect on the industry, his role in helping it to mature, and his own personal path that led him to a career in the HR services field.

Immediately upon graduating with a bachelor’s degree in business administration from the State University of New York at Plattsburgh, which he attended via a track and field scholarship, Hogan moved to the Philadelphia area, where jobs at major corporations were far more plentiful than where he grew up. While his original career aspiration was one in marketing, he was strongly advised to begin in sales as a bridge into the marketing profession. Thus, he began researching leading area companies at which he would receive top-notch training and the ability to progress. From the book, “100 Best Companies to Work For,” he targeted and landed his first post-college job at Control Data, one of the pioneering supercomputer firms whose services business was spun-off in 1992 and became known as payroll specialist Ceridian.

From there, Hogan in 1997 joined ProBusiness, a rising start-up gearing up for its IPO. When ADP acquired ProBusiness in June 2003, the company asked him to help guide its entry into the HRO market.

“When I originally entered the business world, I wasn’t looking for a life-long career in sales, and didn’t intend to pursue a payroll or HR path. I had no idea what it really took to support HR, payroll, or benefits in any size organization. But here I am, 21 years later, still in sales, and still with an HR services delivery firm,” he reflected. “I’m very pleased I stayed on the sales side of the business and certainly very happy in what I’ve experienced and that I’ve been part of in the growth of the HRO industry.”

Hogan had the right idea when he stayed on with ADP following the ProBusiness acquisition. Widely recognized for its success in the outsourcing market, the company is one of few that has been highly profitable in delivering HR services. The company operates three outsourcing divisions: National Accounts, which focuses on organizations with more than 1,000 employees and also has an international arm; Major Accounts, which caters to the needs of companies with 50 to 1,000 employees; and Small Business Services, which tends to organizations with fewer than 50 employees. Hogan’s group, Comprehensive Outsourcing Services (COS), falls into the company’s national accounts division and works with both large and mid-market companies.

ADP’s traditional sales force for national accounts works with existing clients and new relationships, introducing the firm’s transaction-based outsourcing services such as tax filings and 401(K) administration. That group initiates the executive conversation with the client. When it appears the client may benefit from a more comprehensive, specialized, and complex HRO solution, Hogan’s highly tenured team enters the picture to educate the client on the business value around an HRO model and how the company can deliver on the client’s goals and objectives and manages all the pre-engagement activities.

Hogan has two primary areas of responsibility. The first is empowering his team with up-to-the-minute knowledge and data to represent the firm’s capabilities and value proposition, current market trends, and other information to C-level executives at buyer organizations. With that, he provides the executive relationship expertise to help determine and shape the appropriate level of commitment, whether it’s operational, financial, pricing, or contract-related. The second is serving in an outreach role to third-party advisors and industry analysts to ensure these constituencies are informed on the current state of ADP’s current BPO practice and its strategy for continued growth. And it’s clear Hogan and his team are excelling; for example, they have brought in a wide range of HRO engagements including the landmark mid-market deal with E.W. Scripps, Credit Suisse First Boston, and CarMax to increase COS sales by more than 40 percent during the past fiscal year.

In considering the growth of the overall HRO industry—which has slowed from a couple of years ago—Hogan remarked on the emergence of the mid-market segment. He pointed out that classifying companies by employee size is somewhat misleading.

“Mid- and large-sized organizations alike all face the same challenges. They’re all trying to align their resources to focus on their core business, reduce administrative expenses, and put in place and leverage better processes, technologies, and tools,” he noted. “At the same time, they’re trying to lower their cost of operations and limit capital expenditures while improving the levels of service they deliver to their employees. Thus, the real key differentiator between mid-market and large market clients is the characteristics of the service delivery solution they embrace and employ.”

Looking to the future, Hogan said he believes the HRO market will continue driving toward increasing standardization, with a lot more scale being built into providers’ models and a greater movement to more of the one-to-many technologies. Emphasizing the critical importance of standardization, Hogan added, “With a standardized delivery model, it doesn’t take one or two years for the client to actualize its ROI because best practices, technologies, and tools are already built into the solution. A standardized model also allows the provider to go through the implementation and transition phases more quickly and efficiently, which also contributes to accelerating the client’s ROI.”

To further the growth of the HRO industry and make the solutions increasingly valuable for mid-market companies, Hogan suggested that both buyer and supplier need to take action. For buyers, he said they need to keep an open mind about how HR services can be delivered to their organizations and to realize that an outsourced model can help HR groups better align with and support the strategic needs of their business.

For providers, he stressed the importance of moving toward standardization as well as refining and clearly defining the HRO value proposition. “In the early days, a lot of providers were out there saying ‘Whatever HR does today, we can do under the HRO model.’ That, of course, isn’t accurate. The real value proposition is that an HRO provider can perform functions and deliver services that would otherwise take away the HR group’s time and ability to support its core business and can do so with higher service levels at an increasingly affordable price point.”

He also stressed that organizations such as the HRO Association (HROA), for which he serves as a board member, can be highly instrumental in supporting the advancement and health of the industry for organizations of all sizes. He pointed out that HROA’s special interest groups (SIGs)—including the RPO Alliance, Public Sector SIG, and Mid-Market SIG (for which he serves as vice chair)—will function in a key “incubation” role for these subsectors.

According to Hogan, “The Mid-Market SIG was created to bring a spotlight to this market segment, enable best practices sharing among peer companies, create viable and sustainable standards, and help buyers with support at different stages in their life cycle, whether it’s understanding the value of the HRO model, developing the business case for the CFO, garnering insights into the supplier community, setting SLAs, or how to best manage the transition process.

“The executives leading this SIG are striving to give a voice to the mid-market, and are committed to establishing a network of HR professionals who have already gone through the process who will serve as mentors to help earlier-stage peers understand the landscape, variables, and options as they go through the same process,” he continued.

So even as he at one time faced questions of where to take his career, Hogan today, through his efforts at ADP and the HROA, is now providing answers to others about their professional development. But as leaders often do in this business, they blaze a path for others to follow, and Hogan and ADP are doing just that in the world of HRO.

Tags: Multi-process HR, Sourcing

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