Bryan Doyle, Hewitt’s global business leader, stares into his rear-view mirror and give us his thoughts.
HRO Today: During the past five years, has the HRO market developed differently than what you expected? If so, how?
Brian Doyle: Five years ago, we expected the emergence of HRO and were building our business for that moment. In the early years, there was a continual “just around the corner” mentality. I don’t think HRO really took off until Hewitt and Exult merged. We announced the merger in June of 2004. I think before then, we were only seeing some early adopters and a steady but lumpy increase of HR BPO deals, that was certainly the case in 2004. In 2005, we’ve seen a significant uptake in the number of deals.
HRO Today: What do you think will be the major trend for HRO in 2006?
BD: Much more steady adoption of HRO. We will move past early adoption/pioneering to general business practice for corporate America. The main drivers will be business pressure, compliance, competition, and success stories. With more success stories, organizations can talk to their peers and be reassured this is a model that works.
HRO Today: The Hewitt-Exult acquisition of last year was one of the first of several HRO provider combinations. What do these consolidations mean to the: (a) HR executive at large, (b) staff who work for HRO providers, and (c) buyers of HRO services?
BD: HR execs–More clarity on who the key providers are and their value proposition.
HRO provider staff–It is an exciting time to be in the HRO business; growing and creating lots of career opportunities for people around the world.
HRO buyers–What I said about HR executives applies to buyers. Choices and value propositions are clearer. Some buyers come at it from a deep HR/transformation perspective; others come from IT or customer service. It is clear who the top providers are and what value propositions they offer, making it easier to make a choice.
HRO Today: How has Hewitt handled the challenges of the sudden growth you have experienced post-merger?
BD: With our size and 10 years of strong growth, we have been able to leverage that infrastructure–the capabilities of people with Exult, and what we are getting from clients. The merger has gone exceedingly well, though we expect more bumps along the way. We hit the ground running with the announcement of the Sun deal, and are continuing to add brands like Marriot and Wachovia. We have HR experience around M&A and we use that expertise internally to practice what we preach.
HRO Today: Currently, enterprise HRO providers place little emphasis on relocation, recognition, and training and development. Do you think these or any other services will become primary “in-scope” items in 2006?
BD: With a number of clients and those in the pipeline, we’re providing relocation and T&D services; expect these to be very good additional add-ons to core business. T&D continues to be an area where companies are spending more on as the generally global economy is improving. We are also seeing more focus on learning and development.
HRO Today: What is the number one fear still holding people back from outsourcing their HR?
BD: We still see the loss of control of key processes as a big fear. Companies are also concerned about employee reaction to external service providers. But the number one fear is losing control. As the number of companies doing successful HR BPO increases, there will be a wider reference base to call and find out whats worked, what hasn’t, and what they would do differently.
HRO Today: What advice do you have for the HR professional in today’s market?
BD: Number one, do your homework. Entering into long-term partnership, you need to understand service and value today and over the life of the relationship. Number two, HR content and domain expertise is very important. You need to understand the provider’s vision around HR and transformation. Not just outsourcing technology, but much broader. Number three, get outside expert advice from sourcing consultants and others, help HR professionals with their knowledge of the marketplace, and help manage process internally and externally.
HRO Today: Looking back over the first year together, what would you say is the highlight?
BD: The highlight was just starting with the announcement along with Sun as a brand new client. It created a lot of momentum for the rest of the year, being able to ring the bell at NYSE and announce a merger all in one day.