Posts belonging to Category outsourcing

I’ve attended HR People & Strategy’s annual spring conference on a number of occasions in the past (when the group’s acronym stood for the Human Resource Planning Society), but never the group’s Fall Forum. Until this week, that is.

HRPS is in a rebuilding mode, with a membership now reportedly around 1,200. About 150 people attended the group’s fall meeting, which featured a good line-up of sessions and speakers, including HREOnline^™ ’s Talent Management columnist Peter Cappelli.

Incidentally, this year’s event was held at the Westin Arlington Gateway just up the road from the Society for Human Resource Management’s headquarters in Alexandria,Va.

I wasn’t able to catch the first full day’s opening keynote by Healthy Companies Inc. CEO Bob Rosen this morning, but did sit in on a later panel titled “Moderated Panel Discussion on Outsourcing.” Not the sexiest of session titles, but the discussion had some lively moments and included some good pointers for anyone considering or reconsidering recruitment process outsourcing. (A show of hands suggested that most of those in audience had yet to embrace RPO.)

As might be expected, all of panelists have used outsourcing to some extent. But not all were necessarily fans.

One panelist, Mike Brown, senior director of talent acquisition at Siemens, led off the discussion saying he believes that “good professional recruiters … can do a better job in-house.”

When Brown first joined Siemens, much of the recruiting was “decentralized and outsourced.” But not anymore. Today, Brown’s team makes a case to bring on a new recruiter for every 35 requisitions. That recruiter, he said, is expected to fill between 120 and 130 positions every year.

Brown pointed out that the focus at Siemens—which averages about 40 to 50 hires a day—is on time to fill, not cost per hire. “It’s a little brazen,” he said, “but we ask them for the money and tell them to hold us accountable [in shrinking time to fill]. If the results aren’t there, then we’ll pay the price.”

On the list of challenges for those going the RPO route, several of the panelists emphasized the importance of getting a provider who understands your organization’s culture. Figuring out during the RFP process how well it grasps the culture is difficult to do, explained panelist Aziz Chowdhury, a former talent-management executive who founded careerSHOUT!, a provider of career-management solutions. “But it’s a big driver of success.”

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Pretty much everyone agrees the nation needs to do something about getting the federal-deficit under control. There seems to be little agreement, however, when the discussion turns to what that something is.

Well, if you think part of the answer lies in using more contractors to do federal work, a just released study by the not-for-profit Project on Government Oversight (POGO) suggests maybe you should think again.

Among other things, this first-of-its-kind study found the federal government, on average, paid contractors 1.83 times more than the government pays federal employees in total compensation, and more than two times the total compensation paid in the private sector for comparable services.

Of the 35 job classifications POGO looked at, 33 had contractor billing rates that were significantly steeper than the average compensation for federal employees (with benefits factored in). (The two exceptions: groundskeeper and medical records technician.)

So how does HR management work, in particular, fare? POGO reports that HR contractors received nearly twice the amount it would have cost were it done in-house—$228,488 versus $111,711.

In a story appearing in yesterday’s New York Times about the study, James Sherk, a policy analyst with the Heritage Foundation, said he was skeptical of the findings “because it’s not a real apples to apples comparison.”

But despite some obvious flaws—including some noted by POGO in the report’s methodology—the study should, at the very least, give federal entities reason to pause and reconsider the pros and cons of farming out certain work, as well as what they’re paying.

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To be sure, the number of new product announcements at SHRM doesn’t come close to approaching those made our own HR Technology® Conference, to be held this October 3 through 5.  But for whatever reason, there seemed to be a bunch more launches this year than we’ve grown accustomed to.

Not surprisingly, two of the announcements involved mobile solutions. I say not surprisingly because we’ve seen a wave of vendors that have made this a top priority in recent months.

Yesterday, I was briefed on a mobile solution from LexisNexis Risk Solutions, a supplier of employment-screening solutions. The app provides recruiters and prospects access to the process via remote devices in an effort to speed up the background-screening process.

Meanwhile, the former Peopleclick Authoria, which unveiled its new name, Peoplefluent, at the conference yesterday, announced this morning Fluency on the Move, its mobile product line that’s intended to give managers remote “access to relevant and correlated data about their people.”  Initially, four mobile products were released, including Workforce Explorer, Manager Compensation Assistant, Manager Guidebook and Candidate Explorer.

I also was briefed this morning on two other new recruiting products.

Halogen Software announced its anticipated recruitment entry, eRecruitment, an applicant tracking system that integrates with the firm’s other talent-management modules. Like other Halogen products, eRecruitment was “organically built,” points out Donna Ronayne, the company’s vice president of marketing. General availability is slated for August.

And the RPO provider The RightThing launched RightThingRecruit, a recruitment technology platform, for prospects just looking for a technology solution, that addresses sourcing, recruiting, contact relationship management, applicant tracking, onboarding and reporting. CEO Terry Terhart, who says business has been strong for the company, cites flexibility and speed of implementation as two key differentiators.

Granted, jobs may be slow to come back. But suppliers haven’t slowed down their efforts to build out their offerings.

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Gary Kushner offered lots of data about the future nature of work so that HR leaders could begin questioning the way their organizations are designed, the composition of their total rewards and the purpose underlying their HR strategies – but he didn’t provide any answers during his session at SHRM on Monday afternoon.

Kushner, president and CEO of Kushner & Co., a consultancy focusing on employee benefits and strategic HR, outlined five global trends affecting strategic HR: technological advancement, outsourcing, changes in demographics and diversity, changing worker attitudes and values, and globalization.

He also noted that, while business success was based on manufacturing processes 40 years ago and on technology 20 years ago — that it is people who “are our competitive advantage” today.

Kushner talked about the adjustments that would have to be made with four generations — and soon, five — in the workplace, especially the way it would impact upward advancement. And that the ever-growing segment of older workers would impact total rewards and benefits.

He talked about the challenges that the combination of employees, temps, independent contractors and outsourcing have on creating a shared vision and facilitating teamwork. And he talked about how individuals have changed their attitude from living to work to working to live.

“How do we leverage the way we think about all of these trends?” he asked. “The way work has been done is not the way it is going to continue to be done.”

But it will be up to individual CHROs to take it to the next step — and figure out what the answers are.

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There were lots of thoughts to absorb from the Cornell University HR Executive Summit, held as part of the HR in Hospitality® Conference at the Marriott Wardman Park in Washington this morning.

It was a huge roundtable discussion, with 16 panelists, but moderator Bruce Tracey, associate professor of management at Cornell’s School of Hotel Administration did a good job of engaging the entire group and keeping the conversations pithy.

Some food for thought:

*HR Hit Hard: At the Four Seasons, the HR department “took a disparate hit” of a 20-percent reduction in headcount, said Debbie Brown, its VP of HR for the Americas. Overall, the organization lost 4 percent of its workforce.

HR was hit even harder at Hilton Worldwide, where there was a 40-percent global cut, said Barbara Holkamp, senior vice president of HR consulting, who said the HR function focused on providing simple, automated toolkits and models related to people practices and focused on “top grading,” meaning talent development.

She noted that the reductions did not affect hotel-based HR directors – and that guest-service satisfaction scores remained “very high.”

Brown said the organization looked at outsourcing transactional work, “anything that is not mission critical” and that “learning took a real hit.”

*Doing More with Less: In a survey result taken by attendees, 100 percent said their organizations are doing more with fewer resources. In another question, asking for important HR issues for 2011, retention (23 percent) came in first (if you don’t include other, which received 28 percent of the votes); followed by recruitment (21 percent); productivity (18 percent); and compensation (10 percent).

* Adding Instead of Cutting Training: At the Fairmont Hotels & Resorts, the recession actually prompted “the most comprehensive service training program than we ever had in our company’s history at a time when many of our competitors were cutting back or cutting training all together,” said Carolyn Clark, SVP of HR.

But the difference was the program was led by operations, she said, not HR.

“We were really looking for behavioral change to drive business results,” Clark said. The workers completed a self-audit at the end of the training program and created an action plan that was integrated into future performance reviews.

This year, she said, a refresher course will use 30 actual case studies drawn from guest survey results.

* Finding Talent: Recruiting “actually got harder for us” during the downturn, said Greg Smith, executive vice president of HR for Denihan Hospitality Group. “Yes, there were more people looking for work but the people we needed were harder to find.”

So, he shifted the recruiting function down to individual properties and further down, to individual functions, so room attendants were involved in looking for room attendants; front desk managers looked for front desk managers, and so on.

“We have had some pretty good results,” he said.

* Salary Grumbling on the Rise: Don’t expect workers to accept doing more with less forever, the panelists said, especially if their pay is not seeing an increase.

“Their patience is wearing thin,” said Laura FitzRandolph, SVP and assistant general counsel at Interstate Hotels & Resorts. “You have to manage expectations,” but noted that, for the hospitality industry, “the climb back is going to be longer than the fall into the basement.”

* Just-in-Time Staffing: John Longstreet, president and CEO of Quaker Steak and Lube, said he remembers when one major brand laid off 130 managers in a single day – and he wondered how an organization could be so overstaffed.

“I am trying to do more with the same,” he said, noting that he would prefer to under-staff and over-pay. He also has invested in technology to make it easier for his restaurant managers to access the information they need and therefore be able to spend more time with team members.

* Preparing for Retirement: Want to engage your workers? Ask them when they will retire. That’s the advice of Alan Momeyer, VP of HR at Loews Corp.

“There’s nothing wrong with that question,” he said. Plus, it will require them to think about designating successors and then making sure those successors are qualified to step in when necessary.

Those conversations will cascade through the organization — and that’s what results in engagement, he said.

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My HRE colleagues and I spend a lot of time during the show meeting with vendors, and while some of them seem to want to spend all of our limited time hawking their products (boring!) others are genuinely interested in talking about the state of the HCM market (and yeah, I know human capital management is a tiresome and annoying buzzword to some, but I digress).

Anyway, Charles Coy, director of product marketing at Cornerstone OnDemand, said product differentiation is getting tougher and tougher every year for talent-management vendors like his firm. “Look around the show floor,” he told me, gesturing at the crowded booths covering the exhibit floor at this year’s HR Technology^®  Conference.

“So many of us are selling what are essentially the same products, delivered the same way [via SaaS]–how do you stand out from the crowd?” Cornerstone’s strategy will be to distinguish itself from others by pointing out to prospective clients that its suite of tools were developed “organically” (in-house), unlike other vendors, who are assembling suites by going out and purchasing other vendors and integrating their products. “Our products run on the same data platform,” said Coy. “I may be wrong, but I do think that’s a differentiator.”

Coy also chatted at length about the Cornerstone Foundation, a nonprofit foundation created by his firm which — among other things — donates free Cornerstone software to outfits like Teach for America and various charities. “Nonprofits are really underserved in this area,” he said. Interesting …

Michael Custers and Brad Everett of Northgate Arinso chatted about their firm, which recently completed its purchase of Convergys Corp.’s HR business-process outsourcing operations, which makes them one of the largest such vendors in North America, putting them in direct competition with the folks at Hewitt, IBM and Accenture. “We’re a global firm, not US-centric, and we think that will differentiate us,” said Everett.

Over at Saba, they’re feeling pretty confident that collaboration as an actual, workable reality (as opposed to a topic that no one but industry analysts is talking about) is finally taking off, said Yvette Cameron, vice president and general manager. 

“HR people are really starting to drive collaboration and networking within their organizations, and we think that’s great–we want to see them get out in front of this, not hang back and let other departments take the lead,” she told me. Yvette has some self-interest at stake, of course: Saba’s just  introduced Saba People Systems, a suite of collaboration, learning and performance applications that’s designed to “power up the individuals in the organization.” Hmmmmm …  

Meanwhile, Successfactors and Workday are vigorously going after the core HR systems market, with Successfactors asserting that the market is eager for core HR products from best-of-breed vendors. Successfactors can indeed boast of winning over giant technology firm EMC, which is replacing its PeopleSoft enterprise system with SuccessFactors’ EmployeeCentral product for core HR.

And Workday is continuing to go after the large-enterprise market, having used the show to demonstrate how Flextronics (which itself is practially the size of a small country) is one of the small-but-growing cadre of big corporations that are moving away from ERP to SaaS-based enterprise systems.

And what about the regular stream of software updates that SaaS customers receive–which, if you’re a large and complex organization like Flextronics, can wreak havoc on your internal processes?

 ”We’re getting much more proactive at communication, letting our customers know ahead of time what these updates will do so they can make sure nothing gets messed up,” said Workday’s Andy McCarthy. Interesting times. We’ll see how things look next year in Las Vegas, where the 2011 HR Technology^®  Conference will be held at the Mandalay Bay resort.

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No blood was spilled during the Great Service Delivery Debate, as Phil Fersht and Lowell Williams faced off during a Wed. afternoon session at the HR Technology^® Conference. But the two experts didn’t pull their punches either when it came to discussing whether or not HR outsourcing has lived up to its promise.

The benefits of HRO haven’t materialized, suggested Phil Fersht, founder and CEO of consultancy Horses for Sources in Boston.

Consequently, he said, a number of deals have ended up going sour.

Fersht cited Convergys as an example. “Convergys had a great run with HR outsourcing, but in the end couldn’t [make a go of it] and ended up selling the business to Northgate Arinso,” Fersht said. “The whole [first] generation of HRO didn’t work and Wall Street didn’t like it. So people started talking about single process.”

Fersht suggested that the industry is basically back to where it was 10 years ago.

Williams, however, was a bit more upbeat about the model, showing a slide listing 23 HR processes that are being outsourced today.

“The fundamental premise that we could take administrative, repetitive steps out of HR and move them into a service center is a very valid one,” said Williams, executive director of global HR services for EquaTerra, a Houston-based advisory firm.

To be sure, Williams said, HR outsourcing hasn’t fully lived up to its promise. But the benefits of HR outsourcing are equally clear.

If there’s an area employers in need to get better at, Williams added, it’s figuring out “how to repurpose the people in the company once administrative tasks have been outsourced.”

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A new workplace sitcom called Outsourced premiers on NBC tomorrow night at 9:30 p.m./8:30 central. Here’s the NBC website where you can read about it and catch the preview video. Considering this is the first I’m hearing about it (which doesn’t necessarily mean anything), I figured there might be one or two of you out there who haven’t heard about it either.

Looks like the premise (or goal, rather) is to put a “fresh and funny spotlight on the challenges that come with managing employees overseas,” says Brian Abrams from the New York-based PKPR public relations firm.

One of his clients, workplace behavior expert Aubrey Daniels, says the biggest mistake managers (and HR leaders) make is thinking people are different in other countries.

“The principles that cause people to do their best are the same in India, China, Russia and the rest of the world,” says Daniels, author of OOPS! 13 Management Practices that Waste Time and Money (and what to do instead. “When managers export techniques that they have learned in the United States to other cultures without an understanding of the science of behavior, they are bound to have problems, as I am sure that this series will exploit.”

Daniels talks about the show in more detail on his blog. Happy reading and TV viewing!

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A few weeks after Mercer finalized a deal (on July 31) to acquire ORC, Tom Jacob, senior partner and global product lead at Mercer, says the ORC brand name will remain, as well as ORC’s popular surveys and research—like its cost of living studies.

The ORC acquisition gives Mercer a foothold in international mobility within companies in the United States, something Mercer “lacked,” says Jacob.

“Our client base was predominantly in Europe and, to a lesser extent, in Asia and Latin America. Their client base, combined with ours, gives us a presence in all those markets,” says Jacob. “They bring the Mercer clients a perspective and understanding of what kind of issues a U.S. company faces when they send someone abroad.”

He also hopes that the combined partnership can increase Mercer’s capability to handle tax issues, which is increasingly becoming a hot topic in the relocation industry. Jacob also marked ROI on relocation assignments as a place where the combined staff will put its effort.

Bringing together ORC and Mercer representatives to brainstorm on increasingly important issues like taxes for international assignees and ROI “creates new thinking on how we think about these issues.”

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Two items of note for HR leaders on the M&A front today: ADP completes its acquisition of Workscape, while one of the legal restrictions possibly hampering the merger of Aon and Hewitt disappears. [Duh: I wrote Workday earlier by mistake.]

 As for ADP/Workscape: Carlos Rodriguez, president of ADP National Account Services and Employer Services International, says the “strategic and cultural fit between ADP and Workscape is compelling, and will be extremely complementary in terms of services.”

 He notes that “an integral part of ADP’s growth strategy is expanding our benefits and talent-management portfolio and the strategic acquisition of a well-established player such as Workscape represents a significant step in that effort.”

 In the Hewitt/Aon merger, the organizations announced that the anti-trust waiting period had expired. The deal is still pending approval by stockholders and foreign regulatory officials. We previously wrote about the merger here.

 UPDATE: Make that three items of note … as Monster completes its acquisition of Yahoo! HotJobs and enters into a three-year agreement to provide career and job content to the Yahoo! home page. 

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