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Contents Cover Story Celebrating with Change The association for the HR industry marks its 10th birthday with a reflection on how the market has evolved. By Debbie Bolla Page 10

Industry Insight 14

16

18

Building on Sand How can HR get on a strategic path? By The Editors Proof Positive If your organisation isn’t analysing its data, it’s time to reconsider. By The Editors

28

32

Hot Deals The 2013 HRO market was alive with activity. By the Editors

Talent Acquisition 24

HRO Today Forum Europe Highlights

Best Impression The secret’s out: 5 ways to improve your employer brand. By John Wilson

34

36

Expert Q&A 26

The Workforce Value Equation Keeping employees healthy and happy is more valuable than you may realise. By Faye Holland

Is The Way We Work Sustainable? No—and things need to change. Here’s how. By David Ducheyne Multiple Countries, Multiple Considerations The benefits, challenges, and strategies for outsourcing global payroll. By Carsten Staehr Integration Accomplished Pando’s mission to link data and make it actionable won the 2013 iTalent competition. By The Editors The Next Generation Transformation, SaaS-based technology, talent management. Is it all hype? By The Editors

Departments 4

Editor’s Note The Pendulum By Debbie Bolla

6

CEO’s Corner Evolution and the Ascent of the HRO Today Services and Technology Association By Elliot Clark

8

Upside News from the world of work

Columnists 42

Technically Speaking Will cloud-based technology transform the next generation of HRO? By Andy Spence

HRO Today Association 38

Bright Stars The annual awards honour those transforming the industry. By The Editors

41

Questioning Consolidation A roundtable of experts discuss reasoning behind the recent M&A activity. By The Editors WINTER 2014

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Editor’s Note

CEO: Elliot H. Clark Elliot.Clark@SharedXpertise.com Managing Director: Faye Holland Faye.Holland@SharedXpertise.com

The Pendulum

Editorial Director: Bill Hatton Bill.Hatton@SharedXpertise.com Executive Editor: Debbie Bolla Debbie.Bolla@SharedXpertise.com

Within the pages of HRO Today Global, I often find that our stories look back and look ahead. I guess its just natural in a people-centric business to reflect on where we’ve come from in order to learn how to improve. Our cover story, Celebrating with Change, is a testament to our editorial pendulum. The Human Resources Outsourcing Association (HROA) recently marked its 10-year anniversary with a change that recognises the industry’s evolution. The newly-named HRO Today Services and Technology Association is still dedicated to bringing together members of the industry to network and share best practices. But with outsourcing hitting second and third generations, it’s time for the association to embrace HR’s strategic service delivery side. Learn more on page 8. Industry evolution seems to be a topic on everyone’s minds. Just take a look at industry veteran Mike Ettling. The former CEO of Northgate Arinso and VP of Unisys opened up a thought-provoking discussion at the 2013 HRO Today Forum Europe with the question: What is happening to HR outsourcing? His on-stage cohorts—David Mason of RBS, Huw Williams of Capita, and Richard King of P&G—offered their opinions on HR 1.0, 2.0, and 3.0. What did they come up with? There is an underlying agreement that transactional HRO has moved to transformational, replacing lift-and-shift models with best-in-breed approaches. We capture their thoughts on transformation, technology, talent management, and more in The Next Generation on page 36. Another fruitful way to examine the next generation of HR is through research. The HRO Today Institute teamed up with consultancy firm Loudhouse to pick the brains of 500 HR decision makers in organisations across Europe. Since the survey wanted both a supply and demand perspective, 50 HR service providers offered their two cents. The interviews centred around how executives view industry best practices and their main challenges. Some findings: • 40 per cent of respondents experience difficulties attracting talent; • 34 per cent experience difficulties retaining talent; • 34 per cent report inadequate systems/technology to support HR initiatives; and • 34 per cent report lack of alignment between HR and the wider business. It’s evident that there are several challenges to conquer as HR heads into the future. As we swing back and forth, HRO Today Global will continue to find out what’s next in human capital management. Debbie Bolla Executive Editor [4]

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Publisher: Bill MacRae Bill.MacRae@SharedXpertise.com Managing Publisher: Gale Tedeschi Gale.Tedeschi@SharedXpertise.com Vice President of Research: Larry Basinait Larry.Basinait@SharedXpertise.com Associate Editor: Audrey Roth Audrey.Roth@SharedXpertise.com Webmaster: Michael Fernandez webmaster@SharedXpertise.com

Subscription services: For subscriptions, renewals, changes, and back issues, e-mail subscriptions@SharedXpertise.com.

About HRO Today Global magazine HRO Today Global Magazine [ISSN #15413551] is published [4x] by SharedXpertise, LLC © 2014. All Rights reserved. URL: www. HROGlobal.com. Editorial correspondence and press releases: Dirk Olin, Editorial Director, SharedXpertise, 123 S. Broad Street, Suite 1930, Philadelphia, PA 19109 or editorial@SharedXpertise.com. All letters should include the writer’s e-mail address and/or phone number. Business and advertising correspondence: SharedXpertise, 123 S. Broad Street, Suite 1930, Philadelphia, PA 19109, 215-606-9520. Subscriber services: SharedXpertise, 123 S. Broad Street, Suite 1930, Philadelphia, PA 19109, 215-606-9520, Fax: 276-800-2701 or e-mail subscriptions@SharedXpertise.com. Reprints: contact Foster Printing Service, 866-879-9144 or sales@fosterprinting.com. Postmaster: send address changes to SharedXpertise, 123 S. Broad Street, Suite 1930, Philadelphia, PA 19109. Fax: 276-8002701. Canada post: Publications Mail Agreement #40612608. Canada Returns to be sent to Bleuchip International, P.O. Box 25542, London, ON N6C 6B2. This magazine cover is printed on 80# Influence Recycled gloss and the inside pages on 50# Influence Recycled gloss, both with 10% post-consumer recycled content.

APAC

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CEO’s Letter

Evolution and the Ascent of the HRO Today Services and Technology Association In November I went on a tour of Westminster Abbey. I was captivated by the burial site of Sir Isaac Newton. The guide, seeing my interest, said, “You know Charles Darwin is just over there?” I had to ask, “Is this corner reserved for scientists?” She responded, “Not really, but Newton described the world and Darwin figured out who lived here.” It was just that simple for her. After all, Darwin had discovered why and how organisms evolve. The word corporation (and non-profits are corporations) comes from the Latin word for body (corpore, for dead Romans and language geeks). We dedicate this issue to the transformation of the HR Outsourcing Association to the HRO Today Services and Technology Association (see the cover story Celebrating With Change on page 10). There are a number of changes that have come about. First, the association, by unanimous decision of the Board of Trustees, merged itself into SharedXpertise to more fully integrate with our marketing, content, and research programme opportunities. Second, the name was changed. Let’s look at the evolution of the use of the word outsourcing. We are not, in any way, changing our commitment to the promotion and understanding of the best practices in HR outsourcing. Rather, we are modestly expanding our focus into a few other areas. As HR outsourcing has changed—driven primarily by buying patterns—the design of solutions has changed. Some programs that are outsourced involve many processes and sub-processes. Some of what we call best-of-breed solutions are really a single-service offering. Some of these service-offering providers eschew the word “outsourcing.” Their products or services remain integral to running an efficient, high-impact HR department. It is important for the association to embrace the services that are critical to the needs of the practitioner. Many of the “how” aspects of outsourcing, such as sourcing processes, governance, and service level agreement practices apply to this world as well. The other critical aspect of outsourcing, HR services or HR in general, is technology. The association wants to offer the world of technology providers a forum for gathering feedback, setting industry practices, and leading from innovation. Technology is the great enabler and no HR department can function without great technology. The new association will focus on three areas: professional development, networking for its members, and communication to the market on critical information, learning opportunities, event programs, and awards. We are pleased that all of the prior Trustees have remained on the Board of Advisors and continue to provide thoughtful guidance and wisdom to the management team, which is still headed by Global Executive Director Faye Holland. We are excited to be part of the next iteration of this vital part of the HR community and the HROA, which was founded in 2003 and had a leading voice in the growth of the industry. Now in 2014, it has evolved and continues to offer those and others new benefits. New member information can be found on www.hrotoday.com/association for your review. We hope to see you at our next meeting.

Elliot H. Clark, CEO

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Upside

NEWS FROM THE WORLD OF WORK

Seaton Acquires HRX Recruitment process outsourcing (RPO) provider HRX, headquartered in Sydney, Australia, joins the teams of Seaton, Staff Management|SMX, PeopleScout, and StudentScout. The combined organisation has more than 44,000 employees serving more than 200 clients across 71 countries. This acquisition significantly extends the current global RPO leadership position of the PeopleScout division.

Accenture was appointed in 2006 to centralise the client’s HR sourcing and to create consistent methodologies and core processes in its worldwide HR development practices. Prior to this, around 650 different suppliers were providing management training to the client.

Seaton recently announced 30 per cent organic revenue growth in the fourth quarter of 2013 driven by an increase in every service offering and the largest new client win year in the company’s history.

Capita Contract: £325 million

After the acquisition, Taryn Owen, divisional President of PeopleScout, and Jane Hussey will directly report to Patrick Beharelle, and the divisions will closely collaborate on global RPO opportunities.

Accenture and Hemsley Fraser: Contract Extension Consulting firm Accenture and learning provider Hemsley Fraser recently decided to extend a mutual contract for four more years. The collaboration assists a global consumer goods client in reaching their leadership and management training goals. The initial seven-year contract initiated in 2007 provided more consistent management development for the client, which makes and sells products under 400 brand names worldwide. Since then, the company has run more than 2,540 courses, in 24 languages, for 45,000 managers in 76 countries. Hemsley Fraser’s subject-matter experts liaised with a range of client stakeholders to create bespoke training programmes tailored to the specific business objectives and cultural and operational differences in each country. Twenty-three blended learning programmes on management skills, including virtual instructor-led courses, have also been designed and delivered. The global average satisfaction rating for all programmes, from participants and stakeholders, is 94 per cent. [8]

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Capita has signed a framework contract to deliver the Scottish Wide Area Network (SWAN), a single public services network for the use of all public service organisations within Scotland. The contract value for SWAN is up to £325 million over nine years. More than 4,600 sites will be connected to the initial network including schools, hospitals, GP surgeries, pharmacists and local council offices. Key benefits include reduced costs, improved service, and the ability to share data across organisations, fostering co-operative working. With a key focus on supporting the recommendations of both the Scottish Government’s McClelland Report and Scotland’s national digital public services strategy Scotland’s Digital Future: Delivery of Public Services, SWAN is one of the most significant single public sector ICT initiatives ever undertaken in Scotland. The programme aims to establish a single shared network and common ICT infrastructure across Scotland’s entire public sector. As part of this, Capita will deliver a platform designed to support the ever-increasing need for data sharing and tighter interworking requirements across the wider Scottish public sector. Four ‘vanguard’ organisations, representing 30 public service organisations in Scotland—NHS Scotland, Education Scotland, Pathfinder North (five local authorities) and Pathfinder South (two local authorities)—are the first to commit to the network. These early adopters are planned to generate revenues to Capita of c£110 million over the first seven years.

EUROPE

11-13 November 2014 l Edinburgh www.HROTodayforum.com/EU

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Cover Story

Celebrating with Change The association for the HR industry marks its 10th birthday with a reflection on how the market has evolved. By Debbie Bolla

When birthdays creep up on the calendar, don’t we all take a step back and reassess? It’s often a time to reflect where we have come from, what we’ve achieved, and what it will take to get to the next level in our lives. As the Human Resources Outsourcing Association (HROA) neared its 10-year anniversary, the leadership team knew the HR industry had been evolving, and the association had been growing right along with it. Enter the launch of the HRO Today Services and Technology Association. “The HRO Today Services and Technology Association combines the best team of industry expert board members, the best research, and the largest network of practitioners in the HR outsourcing industry,” says Elliot Clark, CEO of SharedXpertise, the owners of the association and this magazine. “The broader focus will allow us to both serve this constituency and add new networks in other HR services and the important HR technology industry.“ Launched in 2003 when HR outsourcing was in its infancy, the group’s mission was to bring together members of the industry to network and share best practices. And while that

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is still at the heart of the HRO Today Services and Technology Association, outsourcing is now a service delivery vehicle that is reaching second- and third-generation iterations, with growth triggered by experience, knowledge, and everchanging technology. It’s time for the association to reflect the progress HR has made and act on it. Once a strictly administrative function, the path is moving more and more toward strategic service delivery. The focus of the HRO Today Services and Technology Association is dedicated to: •

Professional development;

Peer-to-peer networking opportunities; and

Topical service and technology promotions.

The community is made up of HR executives and practitioners, providers, advisors, investors, and technology firms. There is a global advisory board providing insight and direction, and then there are three regional advisory boards to target specific geographies, including North America, Europe, Middle East and Africa (EMEA), and Asia

Cover Story

Pacific (APAC). Bringing each component of the HR equation together allows members to earn an all-encompassing perspective on process. “I think the unique thing about the HRO Today Services and Technology Association is that the association has brought together practitioners, advisors/consultants, and providers (services and technology) into one space,” says Kevin McDonald, vice president of BPO governance at The E. W. Scripps Company, and association member since 2007, holding the leadership role of vice chair. “The ability to gain perspective of folks representing all facets has been and continues to be valuable to me as a member.” The association offers a platform for practitioners and providers to connect and learn from one another. “The [association] in Asia Pacific has provided a forum for Cartus and our valued clients in the region to hear firsthand from other HR outsourcing thought leaders and also to showcase and gain increased market visibility for our expertise and value proposition,” notes Rob Line, vice president of client services APAC for Cartus. Jill Goldstein, Accenture’s global practice lead, talent and HR outsourcing, informs that the tone of the association is highly collaborative without any undercurrents of sales pressure or hidden agendas. She says that buyers and providers have real discussions about relevant issues and produce thought-provoking conclusions. The content is designed to enable HR to elevate its workforce productivity. Best practices are shared through open forums, industry events, networking, and webinars. “The ability to discuss issues with folks in similar industry, organisations of similar size, similar HR service delivery landscape has benefited me greatly over the years,” says McDonald. “You can always find someone you can relate to in some way and share successful practices, or non-successful experiences you can avoid.” And the knowledge is transferable. “We have certainly taken some of the ideas from networking and discussions with other members forward into our own governance and operating procedures,” says Darren Bartholomew, head of HR planning and information systems for UK Selex ES. Goldstein says that the association offers a channel for sharing and learning, as well as testing and developing ideas, which in turn plays an essential role in annual talent and HR strategy planning. Networking events, including the annual HRO Today Forum North America, APAC, and Europe, are a path to exchange

ideas and foster mutually beneficial relationships. “Allegis Group Services finds the in-person networking opportunities to be the most valuable,” says Bruce Morton, head of innovation for the company. “At the annual Forum, we have the opportunity to step outside of our daily routine and connect with our peers on long-term goals, current pain points, and innovative ideas. The benefit of collaborating in-person ultimately generates long-term relationships and partnerships within every industry vertical.” Valerie Egan, head of resourcing North America for Linde, has attended the HRO Today Forum North America for the past few years, and says the networking opportunities prove most advantageous. “Last year at the HRO Today Forum North America, a speed dating session was held for buyers to get to know each other and share issues,” she recalls. “I found this valuable because I made connections with peers who are experiencing the same things and I was able to pick their brain to see how they dealt with the same issues.” “For 2014, our HRO Today Forums will bring the same content and discussions that are covered in the association’s Thought Leadership Councils, bringing better continuity of the right topics to the right audience,” says Faye Holland, global executive director for the HRO Today Services and Technology Association. “Our provider members will be able to host their own user group meetings while at the same time educating the market on the most salient content.” While a broad HR education and knowledge sharing is offered through the HRO Today Services and Technology Association, the Thought Leadership Councils allow for members to zero in on issues directly applicable to their specific expertise. “The Thought Leadership Councils allow participants to key in on particular areas of interest,” says McDonald. “The HR space is very broad and the ability to pick a specific area to network, share successful practices, and help others is a great opportunity with the councils.” There are seven thought leadership councils with the goal to drive professional development: •

Better practices

Buyers

Engaged workforce

Evidence-based HR

Sourcing

Talent acquisition

Technology

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Cover Story

Regional Board of Advisors

Bartholomew describes the Thought Leadership Councils as an open forum or think tank of sorts that encourages the exchange of ideas. Practitioners and providers alike can meet to discuss certain topics and share best practices in a relaxed and confidential setting, he says.

EUROPE, MIDDLE EAST, AND AFRICA

“The [Thought Leadership Council for Buyers] gives access to fellow practitioners on all stages of the HRO lifecycle, from those just starting out on the journey to seasoned buyers in second- and third-generation contracts,” he explains.

Darren Bartholomew, Selex Galileo

The HRO Today Service and Technology and Association also recognises the good work of the HR industry every year through its awards programme.

Gary Madden, BP Steve Riley, Accenture Philip Barbour, IBM Seb O’Connell, Randstad Sourceright Phil Cooper, AllegisTalent2 Sarah Seabury, ISG Hays

“Winning the Asia Pacific regional relationship awards for consecutive years has provided additional external recognition for Cartus in the region and illustrates the pride we have in our continually-advancing client relationships,” says Line. This year the theme is Be Informed: Recognizing Great Business Outcomes in HR. HR knows that with proper budget and resources it can develop a business operating model and metrics to deliver a productive workforce and competitive edge. Nominations should demonstrate how HR drives the overall success of business through growth and profit. See the new HRO Today Services and Technology Association website for more information (www.hrotoday.com/association).

ASIA PACIFIC Rocky Esguerra, Procter & Gamble Girish Tutakne, Accenture Peta Steele, IBM

Full disclosure: In November 2013, the then trustees of the HROA voted to rename and reassign the association to HRO Today Services and Technology Association through the owners of SharedXpertise, who also publish this magazine.

Sue Campbell, Futurestep Caleb Baker, Talent2 Robert Line, Cartus Doug Edmonds, Randstad Sourceright Shabnum Grewal, ISG

Global Board of Advisors Jeanne MacDonald, Futurestep

ADP

Jeff Croyle, ISG

NORTH AMERICA

Jill Goldstein, Accenture

Brenda Sural, Kraft Valerie Egan, Linde North America

Kevin McDonald, The E.W. Scripps Company

Jill Goldstein, Accenture

Mike Andrus, Catholic Health Initiatives

Terrence McCrossan, ADP

Rebecca Callahan, Randstad Sourceright

Steve Schumacher, AllegisTalent2 Deb Card, ISG

Rick Haviland, Allegis Talent2 Terrence McCrossan ADP

IBM

Denis Brousseau, IBM

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SERV A S ICES AN S O D TE C I CHNO LO A TOD T I O NGY A

SERVICES AND TECHNOLOGY A S S O C I A T I O N

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Join the HRO Today Services and Technology Association and connect with HR leaders who are a part of a community that serves to improve the business of HR for themselves, their companies and the industry as a whole. The HRO Today Services and Technology Association is a membership channel and community dedicated to: • Professional development • Peer-to-peer networking opportunities • Topical service and technology promotions to help you better your business Benefits of practitioner membership include: • Access to other practitioners and providers for networking and knowledge sharing • Access to all research reports and Level 3 of the Baker’s Dozen report. • Access to HRO Today Services and Technology Association research reports and ability to participate in future research • Invitations to member-only webinars and online meetings, and regional meetings • Discounted admission to all HRO Today Forum events • Discounted pass to attend Annual Awards Gala (US-only) • Invitations to attend user group meetings • Submissions into annual awards gala and presentations • Certification and new-staff on boarding • Thought leadership library including member-collaborated opinion pieces • Access to Industry Resource Guide • Elect to be part of the better practices group to drive content to make you a better professional • A digital subscription to HRO Today or HRO Today Global • Invitations to attend your provider user group meetings • Can join any discussion Forum and propose new initiatives to the best practices group

For more information, visit us at: http://www.hrotoday.com/association/ or call 215-606-9525

Industry Insight

Building on Sand How can HR get on a strategic path? By The Editors As businesses emerge from the downturn, having the best people in the right places to drive growth has never been more important, shining a spotlight on the role of HR. But is HR seizing the initiative? While we hear a lot about shared services, evidence-based HR, and the cloud, we wonder the extent data, partnerships, and technology are leveraged to build world-class workforces. The HRO Today Institute partnered with consultancy firm Loudhouse to explore these issues. The research sought to determine how senior-level HR executives view executable best practices, and the barriers to delivering on strategic HR goals. The HRprOgression Survey 2013 research finds HR practitioners at a crossroads, focused on the need for growth and innovation, but essentially building on sand. While many organisations understand the strategic purpose of the HR function, day-to-day activities of HR executives tend to focus more on efficiency savings than delivering against the strategic objectives of the business. Six main challenges are diverting HR executives from being strategy focused: The need for a world-class workforce; [14]

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barriers to a world-class workforce; leveraging data, partnerships, and technology; deriving more value from data; the power of partnerships; and integrating HR and technology. The Need for a World-Class Workforce While the economic downturn has impacted businesses across the globe, survey respondents report the workforce is more important than ever. As organisations start to look towards a future upturn, seventy-one per cent have kept staff employed in readiness for growth. Seventy-four per cent expect to increase employee numbers over the next 12 months. This suggests a growing feeling of economic assurance. However, only 30 per cent of organisations are confident they have a world-class workforce already in place with the best people in the right positions and locations to drive potential growth. This lack of confidence could certainly constrain the future development of the business. Barriers to a World-Class Workforce Behind these concerns lie some very real challenges faced by

Industry Insight Figure 1

HR departments, including difficulties in attracting (40 per cent) and retaining (34 per cent) talent. This is compounded by inadequate systems/technology to support HR initiatives (34 per cent), and lack of alignment between HR and the wider business (34 per cent). No one characteristic stands out, suggesting that these factors are working in combination (see Figure 1).

Leveraging Data, Partnerships, and Technology

A key issue for HR is the risk of losing key performers whilst not having the means to predict and plan. Over the next 12 months, 61 per cent of organisations are concerned about losing high potential employees and critical talent—but only 33 per cent actually measure and report on high potential employees, and only 19 per cent are able to predict the risk of people leaving (see Figure 2).

While the strategic imperatives of good practice are well understood, many organisations are running a more tactical HR operation. Only one in 20 organisations (5 per cent) currently make best use of HR data to manage employee capital risks (see Figure 3) suggesting that companies are falling short of leveraging the insight that is available.

The strategic potential of HR in driving business innovation and growth across the business is clear to 78 per cent of respondents. Equally clear is that organisations have room to improve: 74 per cent recognise the HR function could be more open and agile in how it manages talent.

Figure 2

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Industry Insight Figure 3

Figure 4

Deriving More Value From Data Respondents tell us that the first pillar of successful HR service delivery involves harnessing the wealth and power of HR data. Nearly 84 per cent believe this is key to helping manage employee capital risks. In reality, talent measurement has for too long been given a low priority in day-to-day activities: some 79 per cent of respondents think they could gain more value from HR data in their organisation. Use of employee-related data is currently below par, with satisfaction and engagement being the most used metric at 51 per cent, and retention and turnover even lower at 43 per cent. The unsurprising result is that 53 per cent of respondents can plan resourcing needs only up to six months. And less than 10 per cent of organisations can use predictive analytics to identify cause and effect in their recruitment and retention strategies. Why are these figures so low? The main reason is lack of resource and time with 42 per cent of respondents in agreement. How to leverage the data is also challenging: 37 per cent site a lack of systems to analyse data and 33 per cent report data being located in disparate systems and locations (see Figure 4). The Power of Partnerships The HR function has long been reliant on working with external partners, and this looks set to increase. Organisations are using an average of four external HR providers currently and envisage this to grow to an average of five providers over the next two years, with 67 per cent of organisations planning to outsource more HR processes in the next 12 months. Respondents report the approach to partnering should be strategic—they want to see smart sourcing, not just outsourcing. Nearly 71 per cent recognise the importance of strategic outsourcing relationships to driving HR transformation and building a world-class workforce. However in many cases, reality falls short of aspiration. While the key driver for using external HR service providers is

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reported to be driving growth and innovation (60 per cent), when it comes to choosing an HR service provider, the main factor considered is proven cost savings (see Figure 5). This is also confirmed by the provider viewpoint—54 per cent of respondents consider the main reason organisations choose outsourcing providers is cost savings. Integrating HR and Technology The third pillar of capability, as respondents confirm, is making the best use of information technology (IT) to underpin HR strategy. Some 59 per cent of organisations see technology as a key driver of growth and innovation in how they develop a world-class workforce, as opposed to using IT simply as a mechanism for cost cutting (24 per cent) or driving efficiency (17 per cent). To this end, 58 per cent plan to spend more on HR technology in 2013 than in 2012. An increasing number of organisations are turning to cloudbased HR capabilities—systems and services delivered by external companies via the Internet, rather than from in-house IT. Some 85 per cent of organisations leverage at least some HR capability via the cloud and 71 per cent agree that cloud technologies can respond to many HR challenges. Key benefits cited by respondents include improved agility (53 per cent), improved connection between HR initiatives and systems across the business (52 per cent), and automatic updates (48 per cent) (see Figure 6). That is, by using cloud-based technology, the HR function is better able to deliver. Respondents did cite a note of caution: 55 per cent are concerned that HR could lose control if cloud-based HR services are widely adopted in the organisation. This fear further emphasises the potential for HR to be perceived as an administrative rather than a strategic, role. Looking Ahead Survey respondents report that their organisations are fully aware of the strategic role HR plays in developing a worldclass workforce, not just to maximise the benefits of successful talent management, but also to counter the risks. In practice,

Industry Insight

Figure 5

however, too much HR activity is geared towards saving money rather than focusing on achievement of strategic goals. To treat HR strategically, forward-thinking organisations are focusing on three key areas: • Making HR data more accessible and putting it to work; • Operating partnerships with HR service providers at a more strategic level; and • Ensuring that HR technology delivers on its potential. While organisations are investing in technology, there is more that can be done in terms of making best use of data and operating strategic partnerships with HR suppliers. As businesses look to grow, the focus on recruitment and retention can only increase in value and importance. HR has the knowledge and the opportunity to be in a position of proactive husbandry of talent. However, to achieve this requires not

only an understanding of the key elements of strategy, but embracing the opportunity to deliver a world-class workforce upon which the business can grow. About The Survey

The survey consisted of 500 interviews with HR decision makers in organisations across Europe, and was supplemented with 50 interviews with HR service providers to offer both a supply and demand perspective on the state of HR outsourcing. The interviews were conducted during summer 2013. Respondents were located across Europe as follow: U.K. (250 interviews); Germany (75 interviews); France (75 interviews); and Sweden, Norway, Belgium, and the Netherlands (100 interviews). For the full data set behind this report, please contact Faye.Holland@ SharedXpertise.com.

Figure 6

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Industry Research

Proof Positive If your organisation isn’t analysing its data, it’s time to reconsider. By The Editors Figure 1 Is it possible to measure talent acquisition and management success with metrics that align more closely with wider business objectives? That complicated question was researched by a recent study undertaken jointly by Alexander Mann Solutions and the HRO Today Institute. The research included surveys and interviews with 381 global HR and talent acquisition leaders from May through September of 2013. Today, data is held in many disparate systems: applicant tracking systems, enterprise resource planning system, performance and learning management systems, exit management systems, and unstructured spreadsheets. The research found that the vast majority of organizations (91 per cent) currently collect some kind of employee performance data. Nearly three quarters (73 per cent) collect employee performance appraisal ratings, just over a half (55 per cent) new hire retention data, and 50 per cent collect customer satisfaction data (see Figure 1).

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Industry Research

The numbers drop off fairly quickly from there, with just over a third collecting employee productivity and revenue per employee figures, a quarter profit per employee, and very few new hire promotion speed or time to productivity.

Figure 2

While most organisations collect some kind of employee performance metrics, far fewer are leveraging this data to improve ongoing performance metrics. Just over half (51 per cent) say they are using this data in that way; 35 per cent say they are not, and the remaining 14 per cent are unsure. “Often companies collect data but often there is an issue with data quality that makes analysis complex. How many companies make data quality a key performance measure?” notes Jerry Collier, director of Alexander Mann Solutions. However, data holds the key to answering the question: How do organisations measure the factors of a more diverse, engaged, and productive workforce? The key goals of the research included understanding: • If organisations are accessing data; • If they are leveraging data; • If they are aligning data with talent acquisition and business outcomes; and • If so, is it improving business outcomes. To find the answers, the research identified organisations that were currently leveraging one or more performance metrics in order to improve ongoing talent acquisition efforts. A random sample of responding companies were selected, and their three-year trailing total returns were compared to their three closest competitors. The findings were game-changing. The research indicated that organisations that collect and leverage employee performance data to improve ongoing talent acquisition efforts outperform their competitors 58 per cent of the time and by margins of as much as 200 per cent. “If you shine a light on performance and the drivers to performance, we shouldn’t be surprised that performance improves,” says Collier. “Relating performance to training/ learning interventions to recruitment will improve your recruitment, and the business outcome.” Common Metrics Among the organisations that are leveraging employee performance metrics to improve talent acquisition efforts, the most commonly engaged metric is new hire retention (62 per cent), followed closely by employee performance appraisal ratings (59 per cent). The use of customer

satisfaction data is somewhat common at 45 per cent, and just under a third (31 per cent) use employee productivity data. The use of shorter-term, high-impact measures is rare; only 17 per cent of organisations leverage time to performance, and 12 per cent leverage new hire promotion speed (see Figure 2).

Time to productivity. Organisations that can—and do— measure performance in general have success improving performance. They report the greatest improvement in time to full performance, with 15 per cent saying they have experienced greater than 100 per cent improvement, and another 37 per cent reporting they have realized 61 per cent to 80 per cent improvement. So while time to performance is among the least leveraged metrics, it is impactful. While this metric may be difficult to track and manage, the effort is quite worthwhile. Customer satisfaction. Organisations also drive real improvement in customer satisfaction, with 11 per cent saying they have experienced greater than 100 per cent improvement and another 34 per cent saying they have realized 61 per cent to 100 per cent improvement. In comparing use of specific improvement strategies with

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Industry Research

perceived success, however, there are distinct disconnects between the use of specific improvement strategies and their perceived success. While organisations are most likely to leverage new hire retention metrics, success in leveraging that metric ranks nearer the middle of the possible levers. Employee Performance Data The vast majority of organisations (89 per cent) currently collect recruiting operations data. However, the data collected vary widely. Most common are source of hire (74 per cent), time to fill (64 per cent), and number of applicants per opening (53 per cent) (see Figure 3). More challenging metrics—like quality of hire and hiring managing

Figure 3

improve recruiting operations and performance. What steps can be taken? “One of our retail clients links talent acquisition to business outcomes such as average dollar per transaction and conversion rates,” explains Collier. “One of our other banking clients uses data to remove waste from the process, with a real focus on capture, over processing and delay.” Leveraging Metrics for Improvement Organisations are using data analysis to improve process issues, including increasing consistency, identifying problems, doing root cause analysis, and engaging hiring managers. Metrics also play a role in improving candidate sourcing issues to identify best sources of candidates, implement new tools to manage and understand sources, and better targeting. Operations data analysis is used to improve resource utilisation, including analysing results, and justifying staff and other resources. Other areas of improvement include: • Cost/efficiency • Time to hire • Responsiveness/feedback/satisfaction • Job scope/description • Recruiting staff improvement • Strategy alignment Likewise, organisations are using data to improve talent acquisition performance to improve time to hire, focus on candidate and hiring manager satisfaction, improve job mapping, and plan to ensure quicker and better hires. Also common is using data to improve time to fill. Some organisations report they have reduced time to fill by 25 per cent to 50 per cent.

experience—are less commonly collected by organisations. While most organisations collect recruiting operations data, fewer analyse this data, and far fewer leverage it to improve talent acquisition performance. Among organisations that collect recruiting operations data, 68 per cent analyse this data. A third of those collecting data are not benefiting from its collection—and conversely possibly wasting resources on its collection and storage. Sixty-four per cent of those that analyse data strongly agree that their talent acquisition function uses the analysis to

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HRO TODAY GLOBAL

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Next most common is staff development and evaluation, including educating both talent acquisition and hiring managers, improving quality of interviews, and evaluating and improving recruiter performance. Other issues: • Candidate quality • Candidate source • Responsiveness/ feedback/satisfaction • Resource utilisation • Advertisement/social media • Efficiency/cost/value • Strategy alignment • Performance measurement • Planning

Industry Research

Room for Improvement

A Point to Consider

Organisations cite a few areas that data and data analytics have the power to improve.

The research executed further

Process. Chief among the areas that would be improved by better data and analytics are process issues, including helping to understand and illuminate process problems, and identifing opportunities for improvement.

analyses on specific performance

Time/efficiency. Detailed time-to-fill analysis could help organisations identify bottlenecks and improve overall talent acquisition efficiencies.

drive outperformance? Not

Cost. Getting a better handle on both cost of hire and cost of a bad hire are among the top metrics respondents say would help them to improve operational performance.

significant correlation between

Resource allocation. Metrics that would help recruitment leaders better allocate their resources—and advocate for more if needed—were also commonly cited.

measures—employee productivity and employee appraisals for example. Do specific measures significantly. The study found no specific measures and corporate performance. The discipline around collecting, analysing, and leveraging data drives performance, not the specific data leveraged.

Collection Challenges Even among organisations making an effort to improve their talent acquisition data collection and analysis, many are still hampered in their ability to improve recruiting operations. While organisations struggle with a broad range of challenges, respondents most often noted several key impediments: Technology issues

Resource issues

Lack of expertise

Data

No system in place

Analytic resources

Decentralized and/or inconsistent system

Competing priorities

Accountability, execution and discipline in execution.

Data availability across regions

Financial constraints

Data collection

Limited resources to deliver data

Converting good metrics to profitable use

Data consistency across regions

Determining which metrics truly link to talent acquisition effectiveness

Data integrity; ease of obtaining/calculating data from multiple sources

Focusing on the key metrics

Data validation

Measuring performance and linking to hire metrics

Diversity of data elements

Misuse of technology

Unsophisticated or inadequate systems

Talent acquisition/HR team capacity

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Industry Outlook

Hot Deals The 2013 HRO market was alive with activity. By the Editors Reflecting back on 2013, it proved to be a growth year for the HR services industry. In fact, NelsonHall reports that HRO contract activity was up nearly 37 per cent year-over-year. Our roundup includes deals that deliver crucial services to help the way organizations manage their talent. The list was compiled through editorial research and submissions; the deals are listed alphabetically by client.

Client: Air Products Provider: Pinstripe & Ochre House RPO services provided: Full RPO Regions served: EMEA

Client: Credit Suisse Provider: AllegisTalent2 RPO services provided: Supplier management, VMS management, reporting, and analytics Regions served: North America, APAC, EMEA

Client: Hamad Medical Corporation Provider: IBM RPO services provided: IBM Kenexa recruitment solutions, IBM Kenexa Brassring on Cloud, IBM Kenexa Assessment Solutions Regions served: Qatar

Client: Bpost Provider: AllegisTalent2 MSP services provided: Supplier management, VMS management, reporting, and analytics etc. Regions served: Belgium

Client: Celanese Provider: IBM RPO services provided: IBM Kenexa full end-to-end recruitment solution Regions served: North America, Latin America, EMEA, and APAC (Asia Pacific)

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Client: General Motors Provider: Raytheon Learning services provided: Learning BPO Regions served: Korea

Client: GlaxoSmithKline (GSK) Provider: Bartech MSP services provided: Global, fullservice managed services programme (MSP) Regions served: U.S., United Kingdom, and Belgium

Client: HSBC Provider: GP Strategies Learning services provided: Learning BPO Regions served: Global

Client: Honeywell Provider: Pinstripe & Ochre House RPO services provided: Full RPO Regions served: UK & Ireland

Industry Outlook

Client: Origin Energy Provider: Alexander Mann Solutions RPO services: Integrated RPO, CWS, and employer brand management Regions served: Australia

Client: Standard Chartered Bank Provider: AllegisTalent2 RPO services provided: Supplier management, VMS management, reporting and analytics etc. Regions served: North America, APAC, EMEA

Client: Vodafone Provider: AllegisTalent2 RPO services provided: Contingent RPO, payroll, and SOW Regions served: U.K., Luxembourg, Ireland

Client: OMB Provider: Xerox Learning services provided: Learning BPO Regions served: Austria

Client: UBS Provider: AllegisTalent2 RPO services provided: End-to-end RPO Regions served: North America, EMEA, APAC

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Talent Acquisition

Best Impression The secret’s out: 5 ways to improve your employer brand. By John Wilson

The phrase “employer brand” is not only making its way around the recruiting realm—it’s being talked about across all corporations, no matter what their industry or where they’re located. Although many companies have been unintentionally working on their employment branding efforts since the term was coined in the early 90s, it wasn’t a common practice for organisations to actively build and improve it until the past few years. While some organisations have an employment branding strategy, I’ve heard time and time again that their employer brand fails to improve. The two go hand-inhand, and without learning what your current employer brand is, it’s impossible to develop a strategy to improve it. Organisations like Google, Apple, and Groupon have created such a strong brand that the public has a positive image of what it’s like to work at one of those organisations. They pay attention to their brand, nurture it, and develop new strategies to continually bring in top talent. With the knowledge and tools, it’s just a matter of putting your employment branding strategy into place to improve your employer brand. [24]

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1.

Understand your current employer brand. Simply pinpoint your company’s reputation. What are candidates, competitors, clients, and the media saying about your organisation? Learning what others are saying about your organisation will open your eyes to what you need to focus on improving. Start by checking career community pages for reviews, and ask for feedback from your current employees about the company culture. See if current employees would be willing to refer friends or former coworkers for open positions. Employees can be your greatest advocates, so they need to understand and believe in your company’s core values. They should be trained in how to present your brand and offerings, too. Capitalise on your employee value proposition by highlighting top employees in company videos, featuring quotes from them at your website, encouraging them to write for your company blog, and allowing them to represent your organisation on social media.

Talent Acquisition

your talent communities (segmented by interests) to keep them engaged. Send out information to the members of your talent community that would grab their attention: awards you’ve won, new company initiatives, unique employment benefits, and press releases. Be careful not to spam community members; only send out relevant company updates with other content that pertains to their interests.

2.

3.

Optimise what works best. What social media platforms work for your organisation? Not all are going to support your company’s goals. Pick a few that will best represent your employment brand—and make a solid commitment. Utilise all aspects of the platforms, including photos and discussion forums, and be sure to remain active on these selected sites. Showcasing your culture through these platforms and interacting with what people are posting are key. Social media platforms and career webpages are often the top two places candidates look when searching for jobs, so it’s equally as important to optimise your career page to be easy to navigate in an effort to create a positive candidate experience. You’ll be known for having an efficient application process. Engage in talent communities. They’re an excellent workforce planning tool, and they’re also important for your employment branding efforts. How many times do you receive candidates who may not have the experience for any open positions but are still impressive? Take those applicants and place them in

4.

Focus on what makes your company stand out. Figure out what makes your company different from other employers in the market, and own it. If the majority of your employees are allowed to work virtually or you offer paid time off for employees to volunteer, make sure it’s publicised. Embed it in your culture and share the information with prospects. Include these perks on your careers page and incorporate the topics into your blogs posts and social media strategies. If you want to attract top talent, you have to start by knowing what candidates will find most appealing about your company and let them know about it.

5.

Monitor how your efforts are paying off. Once you have a solid employment branding strategy in place, monitor and track it to determine the return on investment. Pay attention to what people are saying on social media, and be sure to respond to them. Let them know you care about what they have to say and you’re taking their thoughts into account. By interacting with those interested in your company, you will not only make an impact on them, but it will compel them to share the good word about your company. Be sure your company profiles are complete and cohesively branded on all job boards and career community pages. Some sites allow you to track your organisation’s insights, including categorised company ratings and CEO approval ratings, even how your company stacks up against top competitors.

John Wilson is CEO of WilsonHCG

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Expert Q&A

The Workforce Value Equation

Dame Carol Black

Keeping employees healthy and happy is more valuable than you may realise. By Faye Holland Dame Carol Black, DBE, FRCP, is Principal of Newnham College Cambridge; Expert Adviser on Health and Work to the Department of Health, England; Chair of the Nuffield Trust; and Chair of the Governance Board, Centre for Workforce Intelligence. When Dame Carol was president of the Royal College of Physicians (2002-2006), the Faculty of Occupational Medicine within the college challenged her to deliver a major lecture focussing on what does a physician contribute to occupational health. After some initial research, Dame Carol found that as a profession, the answer at that time was profoundly little. A light bulb went off: She realised that she and most physicians had never fully understood the impact of work on one’s health. During her last year as president of the college in 2005, the U.K. Government published a cross-government strategy on health, work, and wellbeing. According to www.gov.uk, this initiative sought “to improve the general health and wellbeing of the working-age population and support more people with health conditions to stay in work or enter employment.” A National Director for Health and Work was appointed to drive the agenda, and Dame Carol took on this role from 2006 to 2011. Dame Carol remains active in the promotion of building and maintaining a positive relationship between work and health. She is an expert adviser to the Department of Health, as well as chair of the UK Government’s Public Health Responsibility Deal’s Health at Work network and an adviser to Public Health England. The ties between health and wellbeing and work are stronger than ever today. A positive working environment, a solid work-life balance, healthy living, and good [26]

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communication are no longer nice-to-haves—they are must-haves. And the underlying need for companies to retain their staff is critical. Improving the wellbeing of your workforce is key to developing a culture where individuals can flourish, productivity is increased, and loyalty is embedded. As the wellbeing charter explains: “A healthier workforce makes for a healthier bottom line. As well as making good commercial sense, investing in the health and wellbeing of staff is seen by many as part of your responsibilities as an employer.” How important is health and wellbeing in today’s workforce? Many companies today have fewer people doing the majority of the work, so it is critical to look after them. The more stress you have in an organisation—whether it’s due to redundancies or workload management—the more you absolutely need to support your employees. What are the three most important things for work and health? 1.

Good management, line manager training, and good work environments are crucial. Managers and workplace culture must be geared up for providing strong leadership, strong communication, and a positive environment.

2.

A focus on mental wellbeing and how companies handle common mental health problems such as stress, anxiety and mild depression.

3.

Educating doctors and other healthcare professionals that they have a huge influence on whether somebody returns to work.

Expert Q&A

Do you have examples of what organisations can do to promote health and wellbeing and what steps they should be taking? The first step is getting some base line data from your employees and of course respecting that different employees want different things. An example from my current position as Principal of Newnham College Cambridge: We’ve got 89 staff and earlier this year {2013} I did a base line survey, then six focus groups. I knew after that what our staff priorities were. One was to have a gym but we cannot do that at the moment. Instead, we could purchase bicycles for the staff to use for exercise at lunchtime, and we could encourage team sports. We are now in the process of organising line-management training and we are looking at mental health first aid. As with most things, we are doing it in bite sizes, not promising too much. I went back to the staff and said, this is what you have told us, this is what you most want, this is what we can do now, and these are some of the things that are going to take longer. And there are some things that are in a very difficult box, because they are about culture and attitudes, and we will work on them but we are not going to stand here and promise they’re going to change tomorrow. If I’m an HR director, what can I actually do? It really doesn’t matter which part of the company leads the initiative, but HR needs to be involved. This is a team game and what you need is to create an environment where occupational health, safety, and wellbeing, performance and productivity are integrated. A board member should spearhead this, and for today’s HR professional such an approach could provide a step-change to your company. Focus on your current challenge and obtain base line data on which to build recommendations and measure improvement. What are some outside tools I can leverage? In the U.K., a Workplace Charter resource originally hosted by Liverpool NHS Primary Care Trust has gained a lot of traction. It tackles health and wellbeing in achievable steps which is a great place for a HR director to start. There are eight standards, and you start with a self-assessment. To get some feedback, you need to fill out various forms describing what your organisation and staff are like, and then you take a survey. The self-assessment tool has seven sections to complete which you can phase to maintain momentum across the organisation. This process gives you an overview of where your business currently sits as to meeting the Charter’s criteria.

The tool and materials can be found at http://wellbeingcharter.org.uk. What are some good examples of healthier workplaces? British Telecom, BP, Shell, GlaxoSmithKline, and EDF Energy have solid approaches to health, work, and wellbeing. In the public sector, the hospitals in York, Gateshead, and The Walton Centre in Manchester are also good examples. Medium and smaller-sized companies can benefit just as much and great examples include Axiom and TRAC. According to the wellbeing charter, British Gas held backcare workshops. As a result, back-related absence reduced by 43 per cent, and 58 per cent of staff improved their attendance. The return on their investment was £31 for every £1 spent. Parcelforce Worldwide established a comprehensive workplace wellbeing programme, resulting in reducing sickness absence by one third, saving £55 million. Compensation claims were also reduced by two-thirds and productivity increased by 12.5 per cent. An overall £2.25 million investment resulted in direct cost savings of £6 milion. If health and wellbeing are combined as part of overall employee engagement and retention, who can we look to for inspiration? I think the best work on employee engagement is being done by Nita Clarke and David McLeod. Their movement Engage for Success now has national networks and champions. They started by doing a report for the Department of Business and Innovation and Skills published in 2009 where they set out the case for engagement. Now the movement is ever expanding and they have published evidence to show the difference that an engaged workforce makes. They have also identified the enablers of engagement. (More information can be found at http://www.engageforsuccess.org/.) What is your biggest lifelong learning? Never to give up. You just have to learn to be resilient as you get lots of push backs. And not to expect things to happen immediately. None of the things I have achieved in my career have been flash-in-the-pan, overnight things. They’ve all been about being prepared to keep the agenda moving forward, and when things get difficult you just go to bed, sleep, get up, and start again. It’s about resilience.

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HRO Today Forum Europe Highlights

Is The Way We Work Sustainable? No—and things need to change. Here’s how. By David Ducheyne Do your employees have an appropriate workload? In most cases, the answer is likely no. In fact, according to a research study conducted by Securex in 2013, almost half of employees experience a mental workload that is too high. This is causing the prevalence of burnout to rise. Is the way we work sustainable? Further research, this time by the European Foundation for the Improvement of Living and Working Conditions, reports that very few people actually have an “active job.” [28]

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An active job is defined as employment that enables workers to maintain the right balance of workload, job control, and social support. Employers should take heed of this situation and actively look for ways of enhancing sustainable employability—the capacity to work in the future. This can be done through a customised approach to employment. Traditionally, organisations look for employees that fit a mold and a given job description. But this is very limiting.

HRO Today Forum Europe Highlights

Organisations should provide a work environment that is adapted to the individual employee’s strengths. To evolve towards a more customised approach to work, the mindset needs to be changed. Organisations need to base work on several tenets: a vision on people, a balanced leadership, an architecture of choice, and changing HR-practises.

organisations are facing, a certain kind of leadership is required. Executives need to realise that not everything is done the same way in all circumstances. Leaders need to let go but also hold on to the essentials: the targets, the vision, the values, and their responsibility for the people that work for their teams.

A Vision on People

Customisation requires leaders to build culture in which choices are possible. This is a culture based on trust, but trust alone is not sufficient. The culture needs to demonstrate ways to manage individualisation. How? Through an architecture of choice.

Many organisations adhere to the adage that people are the single most important asset. But do most companies live up to it? Unfortunately not, so maybe the adage should be flipped around. A company should make a difference to the people they employ. Organisations offer people a way to make a living, but they can also offer meaningful relationships, and ways to grow professionally and achieve goals to build a life. Companies that strive to contribute to employee’s lives more than just financially are more humancentric. Companies and leaders also have to be willing to show empathy. Empathic behaviours translate to listening to employees—showing them you understand their needs and will consider offering individualised solutions to individual problems. With customised solutions, fairness is also an issue. An individualised solution cannot be at the disadvantage of other colleagues. Individual demands should be evaluated in a collective context. A colleague should also benefit from the individualisation that occurs.

An Architecture of Choice Introducing customisation may cause inefficiency and lack of control. A company needs to develop an architecture of choice by offering both standardised and personalised choices. Mass customisation offers standardised choices to people; this way all employees follow the same procedure and has the same option. Opportunities of working remotely, flexibility plans, and specific career paths are part of mass customisation. Everyone is offered options, but employees make personal choices to help them to adapt work to their personal situation. Mass customisation is a great way to customise work.

Kindness or compassion is another important element. People come to work but do not leave their humanity at home. Employers need to exhibit compassion and kindness when needed—and this will not lead to softness and gullibility. But when people face problems, showing kindness is a very human-centric approach.

However, it might not be enough—and organisations can opt for i-deals. I-deals are individualised agreements that change the standard employment contract. I-deals can customise any aspect of work: job content, work-life balance, learning, career, health, and time and place of work. This approach helps fine-tune the balance between individual employee and their work to increase engagement and productivity. They can also help retain someone with specific skills or value within the company.

A fourth element of a human-centric vision is the reciprocity in the employment relation. Reciprocity is about expecting contributions from every individual.

To executive strategies of mass customisation and/or i-deals, there is a need to adapt HR-practises that are often oriented towards control and compliance.

These components—empathy, fairness, kindness, and reciprocity—should be actively developed within a company’s leadership. Any leader needs to find balance in this people vision.

Changing HR Practises

Leadership: A Balance If customisation is the answer to the many challenges

Individual demands and expectations can be an inspiration for HR to change certain practises. The major fields to customise are job design, learning, career management, compensation, and health management. An organisation can introduce new approaches in those fields that consider the needs and strengths of the individual. WINTER 2014

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HRO Today Forum Europe Highlights

7.

Make sure the job is decent and supports an individual’s sense of dignity.

8.

Make sure there is the possibility for individual recovery.

9.

Provide sufficient support from colleagues and leaders.

And if a company wants to embrace the practise of job sculpting, it will have to abandon the classical approaches of job descriptions. This in itself is an illustration of a new style of leadership that balances letting go how someone does the job (job descriptions, formal job organisation content) and holding on to required results. In general, organisations should abandon the idea of collectivity when designing HR practises and moving towards a more individual approach. Why Bother? Although customisation has its challenges, there are a lot of benefits both for employees and employers. Two examples:

Remote work. Mobility issues inspired very often the introduction of remote work. Companies have adapted office layout, introduced technology, and set-up systems— like video conferencing—for collaboration. But the biggest challenge is to change leadership and culture. The new way of working requires a whole different way of organisational thinking. For remote work, organisations have to step down from the idea that control adds value. Instead, companies need to operate through a balanced, results-oriented work environment. A value and trust-based style of leadership is a condition for remote work to be successful. No trust, no flexible way of working. Job sculpting. To customise your workforce, start with an analysis of the skills and talent of an employee and construct a job around that. For example, you take an existing job and let the employee sculpt the job according to his or her individual needs and talents. Here are nine criteria for job design: 1.

Make sure the job has meaning.

2.

Make sure the person can use his talent in the job.

3.

Make sure the job provides opportunities for learning and growth.

4.

Make sure there is sufficient autonomy.

5.

Make sure the job can evolve over time.

6.

Make sure a person can experience flow and obtain success.

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Higher levels of employee engagement and therefore performance;

Higher rates of retention;

A better integration of private and work life;

The possibility to recruit certain profiles;

The possibility to recruit people from less evident environments with reduced work capacity;

Prevention of health issues like burnout or professional diseases; and

The capacity to work longer.

Companies that would like to customise their people approach should look at three things. First, the employment law in many countries (especially in Europe) provides flexibility. Second, a lot of issues can be solved in a standardised way. Offering choices to people should not always be cumbersome. Try and build an approach that offers choices whilst at the same time being manageable. Lastly, if legal and company policies don’t allow for mass customisation, consider adopting the practise of i-deals. For success in either situation, remember to define what you want to hold on to as a company, and what you are willing to let go.

David Ducheyne is chief people officer and general manager, individuals, for Securex. He presented his ideas and led discussion at the 2013 HRO Today Forum Europe.

HRO Today Forum Europe Highlights

Multiple Countries, Multiple Considerations The benefits, challenges, and strategies for outsourcing global payroll. By Carsten Staehr According to many recent surveys conducted by the likes of Ernst & Young and Gartner, the trend towards multi-country outsourcing is on the increase. Why is this? One of the overriding reasons to outsource is the need to gain better cost control. This in itself can have a variety of drivers: • Lowering the total cost of ownership;

Ineffective internal reporting;

Governance issues;

Lack of standardisation; and

Increased cost.

Providing flexible adaptation of costs (to service the likes of restructuring, mergers and acquisitions, reductions, and its more positive counterpart, expansion); and Allowing organisations to focus on their core business (together with the perception that outsourcing can bring increased expertise and added value to the party).

There are many other important factors which are driving organisations to outsource HR and payroll services at a global level: • • • • •

Reducing risk and liabilities; Maintaining compliance complicated by ever-changing legislation; Ensuring consistency; Streamlining processes; and Accessing and aligning data.

The Challenges Historically, organisations have outsourced payroll on a countryby-country basis, resulting in: [32]

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Many companies are now going to market for a second time, looking for a solution, but are unclear of what they actually want. Adding to this, the market itself is confused, and ultimately, there is no one global solution for payroll. Confusion stems from several factors. Knowledge and acceptance of outsourcing varies by country. For example, France is less familiar with outsourcing and has a low usage rate. Experience and expectations should an added consideration. Terminology also adds to the complexity of defining and providing an outsourced service. We all use the same words—payroll, HR, managed services, and business process outsourcing—but they can mean different things to different people. There is no common framework across countries, and this can also contribute to the confusion when determining requirements. Add to this the individual legislative complexities

HRO Today Forum Europe Highlights

Figure 1

of running payrolls in different countries, and you begin to see the parameters of the challenge. In fact, of the 10 most complex countries to run payroll, seven are in Europe (see Figure 1). The variables by country causes a variance in the sophistication of the solution needed to fulfill the requirement. This can result in a big difference on many levels: cost per pay slip, implementation fees, and lead times required. As an HR practitioner, it’s very difficult to know if you are getting value for money, let alone the necessary expertise. So, bearing all this in mind, what is possible for global payroll, and how do you avoid the potential pitfalls? Strategies In order to manage expectations, it is important to acknowledge that no enterprise system—like Oracle or SAP— exists in the global payroll world. However there is the facility for global input screens and global reporting. Be sure to ask following two fundamental questions at the start of your process: •

What do you as a client really need?

What will help you move forward?

Knowing what you want and where you want to go will help identify the key drivers and objectives of the change. At the outset, it is important to have a full understanding of your current situation. Do you have a clear view of your payroll costs and the potential budget available to implement the change? To ensure an effective and successful strategy, it is also vital to identify any potential barriers:

Does your organisation have a culture and history of outsourcing services? If not, the communication process is key. You will need a strategy that takes this lack of experience into account. Be sure to clearly define roles and responsibilities, and manage expectations.

What is the appetite for change internally? If the change is being driven by headquarters, local offices may resist change if they see extra work, no added value, and their local relationships disappearing. Communicate with your offsite managers to get an understanding of their needs, taking into account legislation and culture.

You also need to have a clear view of what is available in the global payroll market and what service offering is right for you. Organisations often have a tendency to over complicate an request for information by including a complete “wish list” which contains many non-essential requirements. This will only cloud the issue. Enlist the help of a global player to help you identify and refine your requirements. A word of warning though: Don’t let suppliers talk you into complexities that may not be necessary or of benefit to you! As the market begins to mature, the potential benefits of multicountry outsourcing: •

Central contract negotiations and economy of scale;

Global governance;

Consistent processes in all countries;

Global reporting; and

Single point of contact for delivery.

The Future So—what’s next? Well, we can’t say for certain, but there are emerging trends that we would expect to continue: •

Technology. Innovations in technology will undoubtedly continue to have an impact on service requirements and service delivery. Mobile and cloud-based technology will form an important part of future strategic planning.

More sophisticated analysis. With all aspects of financial data coming under scrutiny, the need to further examine payroll and HR data is likely to increase.

Hybrid solutions. As requirements become more sophisticated, it is likely that hybrid solutions will be a popular way of fulfilling customer needs.

Carsten Staehr is CEO of Cintra HR & Payroll Services and a member of the Payroll Services Alliance. He spoke on the complexities of multiple country payroll at the 2013 HRO Today Forum Europe.

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HRO Today Forum Europe Highlights

Integration Accomplished Pando’s mission to link data and make it actionable won over the judges of the 2013 iTalent competition. By The Editors Data composition of organisations is becoming more and more entwined, and Aspen Advisors has discovered the key to putting these puzzle pieces together. Its platform Pando allows companies to link the necessary data from their surplus of HR systems, and provides visibility on just how to leverage it. Say goodbye to endless rows of numbers, and hello to actionable information that allows organisations to operate more efficiently, drive more profitability, and service customers better. But what really sets the winner of the 2013 iTalent Competition apart is the nature of the data it congregates for its users. “We’re believers in the concept of you’re going to measure what’s important to your business,” says Andrew Gadomski, Founder of Aspen Advisors. “What we measure ... for our clients is variable, but directly relevant to their business needs.” This way there is no mess, only efficiency. Users have access to their data in formats that pave the road to making educated business decisions. So how did Gadomski crack the code on data integration? The winner of the 2013 iTalent Competition clues us in on how they did, how it works, and where it can take organisations. Pando allows the visibility and integration of data within an extensive amount of systems. How did you recognize this void in the marketplace? In the outsourcing world, it’s rare that the outsourced provider has ownership of the systems that they have access to on behalf of their clients. So, there’s a natural tendency that the client is the one who chooses the system. So Pando can link up the systems to integrate the data. The systems that can talk to Pando are basically limitless. We have all kinds of human capital management systems, applicant tracking systems, contingent labor systems, performance management, and on and on. It [34]

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doesn’t matter the type because systems of records tend to have relational databases that are just made up of rows and columns. And we don’t move your data. We want you to keep using the systems that you are using; we just want you to be able to have visibility to what’s inside. Global organizations have a ton of data, but they don’t have visibility across all these data systems. Data needs to be leveraged so organisations can operational more efficiently, drive more profitability, and then service the customer better. When did the idea for Pando first come around? We’ve always been a very data-centric consulting organization. Maybe it’s because I studied too much science as a kid. I’m just a fan of evidence. Every time we worked on human capital consulting projects for larger corporations, we always acquired their data. As we worked with those organizations, we started asking them how we could make their business better, and a few clients asked if we could help them understand their data better. They were spending all this money on systems but none of them integrated. It made a lot of sense, given how we operate. We use so much data to make decisions for our customers. Why not produce a platform that allows them to self manage, but then also gives us the ability to solidify our recommendations through a data platform? How did the idea for Pando evolve from inception to creation? There were a number of business intelligence tools that were in the market already. And the market was getting saturated quickly. I did not want us to spend a lot of time trying to

HRO Today Forum Europe Highlights

develop a technology or develop assets that I could probably purchase instead. So, we decided to partner with certain organizations to help us create the technology and we either licensed or acquired their intellectual property. We found a visualization partner and a systems integration partner. But we spent a lot of our time and intellectual property developing architectures that protect our clients’ data since it’s personal and confidential. We wanted the platform to adjust to the market and integrate with different systems over time. There’s a new system coming out every twenty minutes, right? We developed a platform that will just be able to absorb any kind of structured data or any kind of unstructured data. What does Pando need from each system to be able to integrate the data? Can the format vary? We can talk to basically any system that has rows and columns. It’s not about what we pull in; it’s what we don’t. Pando only pulls in what is required. It’s not like the traditional datawarehousing concept of moving all the data. We only move and copy what we need. That’s why this system is so fast and so light. The platform works by hooking into those systems. There are all kinds of ways to hook into the data—data calls, sequel calls, JDBC connections, even manual uploads. You hook into the data based on how often the data changes, and how much data you are going to move over. We’re very selective about how we do it. We look at the velocity of the data, the volume of the data, and we’re very conscious of the fact that we’re capping into systems that have confidential, personal, and financial information. We only do it as needed. What are some of the metrics that Pando examines? We’re believers in the concept of you’re going to measure what’s important to your business. We don’t offer a certain amount of metrics or packaged plans. What we measure for our clients is variable, but directly relevant to their business needs. Some clients are interested in measuring the productivity of their sources through social media. If that’s the case, we look at the effectiveness the campaign through number of hires and interview. We’ll also look at the cost of that social media campaign. Another client maybe be interested in tracking how successful their executive succession plan is driving business improvements. Here we’d merge operational data, customer service data, and marketing data. This would show the effectiveness of leadership and the company’s ability to improve those leaders—and how all of it is impacting the bottom line. I believe it’s my responsibility to make sure we are tracking metrics that are important to my client’s business. If not, we may be wasting time and money. And I’m not in the business of wasting anybody’s time or anybody’s money.

How is Pando’s expertise different from other data-integration systems? There are a couple differentiators. First this is not a system that you necessarily log into—we directly connect clients to the metrics and the reports through email or text message alerts. They can also be accessed through SharePoint sites, or their Internet sites, or their client pages for their accounts. Clients see our generated reports in their regular work streams that they’re already using. We take that concept of pushing the intelligence to places where people already work so the engagement level is three or four times higher than your average intelligence system. That’s a big difference between Pando and other platforms. We also connect to other platforms. We have partnerships with organizations that allow us to connect with other business intelligence systems. That’s a big differentiator—we can connect to business intelligence systems that companies already have, and power them up. We can also leverage unstructured data. All of the systems that we connect have rows and columns. But then they also have attached resumes, LinkedIn profiles, manager notes, and documents. They’re all over the place! We can pull those into Pando and analyze, sort, and pipeline them automatically. That’s very different. Most business intelligence platforms don’t allow for unstructured data to be organized and filtered. What does the future look like for Pando? Our future is really about being able to continue to get organizations to link their human capital data with their operational data. And really get more visibility to how their workforce is getting better. We’re going to spend a lot of time doing that in 2014. We’re going to be aggregating that information and providing more benchmark data around companies’ processes to help organizations improve. We are looking at how to do more within the outsourcing space, and that’s pretty exciting. We’ve got some pretty amazing things coming to market around predictive analytics, attrition, and retention of workforce. It’s just out of beta and it’s being used in a handful of customers right now. How was your experience at the iTalent competition? What a great time. There’s not only an appetite for technology, but there’s also an appetite for people to learn about technology. And I thought iTalent did a really nice job of feeding that need. People are genuinely interested in what’s next. It’s a great competition. Pando’s a business decision engine. It’s a way for leaders to quickly understand what’s going on in their business and take action. It’s a business decision system. It’s made for the executives who are trying to drive their teams to be more successful.

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HRO Today Forum Europe Highlights

The Next Generation Transformation, SaaS-based technology, talent management. Is it all hype? By The Editors

What is happening to HR outsourcing? This question—and more—was addressed by an illustrious group of experts in the HRO field at the 2013 HRO Today Forum Europe. Mike Ettling opened up the discussion to David Mason of RBS, Huw Williams of Capita, and Richard King of P&G. Other topics they tackled: the promise of transformation; the hype around talent management; and the impact of Software-as-a-Service technologies. Here’s a bird’s eye view. Mike Ettling: What is happening to HR outsourcing? If we go back 12 years to those original days of very comprehensive HR outsourcing deals, they often covered all aspects of HR and were billion dollars in size. We very quickly moved on to what has been called HR 2.0, where the deals started taking on much more of a transformational aspect to them. Embedded in those transformational deals was this concept of implementing an HRIS platform for the first time. And we started seeing storms on the horizon in this phase of the history of HRO. Many of these deals caused huge amounts of losses for vendors. Many of the clients who attempted these deals never ever got implementations rolled out on a global basis. So we started seeing challenges in the industry emerge. HR 1.0 and 2.0 were very much one-to-one models and lift and shift, siloed operations with the clients. After that came HR 3.0 and a move to a one-to-many model. HRO 3.0 implied a multi-tenant, SaaS-based solution was being used. But over the last 10 years, the one common phenomenon we’ve seen is that these deal sizes have declined and these [36]

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relationships have declined in size dramatically. Billion-dollar deals are now 150-million-dollar deals. Is there going to be an HR 4.0? Or is HR outsourcing as we know it finally going to be put to bed? Richard King: P&G was one of the first companies that operated with HR 1.0 with IBM in 2004. Ten years later, we’re now in more of a best of breed model. So, we’ve lived through quite a bit of what Mike just described. Ettling: We’ve talked about the change in HR outsourcing and we’ve seen it in the IT outsourcing world over the last five or six years where big mega IT outsourcing deals went into best of breed sourcing. Is comprehensive HR outsourcing officially dead? King: I don’t know if it’s officially dead, but one supplier providing all processes across the board isn’t for us. That’s a place we started at in 2004, and after three or four years, we found that it just didn’t play out. For example, our particular partner didn’t have international relocation as a core strength. So we reached a point together where we both knew it wasn’t strategic and we moved to a place that’s a mix of best of breed, where we think there’s niche players with unique capability. With that being said, we also don’t want to end up in a selection of silos which creates its own problems. Our core vendor is providing an integration layer across the board. Ettling: There’s this dreaded “t” word amongst vendors and the outsourcing space: transformational. Does transformational

HRO Today Forum Europe Highlights

outsourcing in today’s world exist or should we just and focus on transactional procurement?

Does RPO enable or hinder talent management? Where is this talent management headed?

David Mason: I think there’s a couple of dangers there.

Mason: We need to be very clear with our providers and suppliers about what we’re asking them to do. And that comes back into a two-way relationship. So, no I don’t believe RPO hinders, but you’ve got to get the operational execution right. You have to execute well if you’re going to put in a talent management strategy. So, you’ve got to recruit or you’ve got to manage your contingent labor well. But you’ve got to do the internal piece correctly as well. Once you’ve got that right, you can move onto the strategy. I think that’s that piece where a lot of the RPOs have started to move into. It’s a much bigger leap than getting to that space around strategy and how you drive that, because that’s quite personal to an organization.

Focusing only on the transactional piece leads you into a place that is about price only. The transformational piece is also a difficult one because it can vary in motive. In the end, it really comes down to focusing on what the client’s problem is and solving that. The transformation piece comes next, because it’s quite important. Too often in my career I’ve had to deliver the bad news to vendors: the contract’s been awarded to somebody else. And then they ask why. Often the answer is about transformation. The vendor didn’t move with us as an organization because they were delivering the contract we asked for three years ago. So I think it’s a difficult sell but is absolutely necessary. King: We found vendors that deliver the service that you contract with on day one and don’t evolve it. It’s like standing still for five years. We’ve tried to put in constructs to incentivize transformation. Because often if you transform, it’s taking cost out and if you’re taking cost out, the value may fall. Another challenge is trying to establish some sort of innovation process together, with the view of innovating in a way that is scalable across other clients. Huw Williams: It’s a very easy statement to make that you want to transform, the implication being that it will be an improvement. But the ability to record, score, and measure as you advance means that you tend to fall into other avenues. Ettling: Now we’re moving to this multi-sourced, best-of-breed world, what other key skills does an organisation need? King: It’s a great question; I have to say that we learnt that probably the hard way. In our 1.0 world the assumption was that our provider would just deliver everything and everything would roll on because they had all the assets. As you said in a 2.0 or 3.0 world, it looks very different. So what we’ve found is that from an operational government standpoint, we’ve found that we need to have a good understanding of really what’s going on within our providers—a much deeper dive than what we first thought. A vendor needs actual direction—and that direction needs to come from us. We had assumed at the outset, because all of our people who used to set direction and used to innovate, would move to our providers, that they would provide that back to us. But the reality is, that unless you’re an integral part of the company, that’s just impossible. I think we’ve had to learn how to be good partners. It is about understanding the true total cost of ownership. Ettling: Let’s shift gears a bit. We’ve seen a huge amount of hype in the talent management space in terms of the market.

Ettling: Let’s turn to SaaS. What is Saas going to do to HR outsourcing and HR services? Mason: The first focus is really thinking about employees and managers in the organization, and making life easy for them. Lots of processes have been heaped on managers and employees, and it’s become a distractor, particularly for customer-facing organisations. I think that technology is going to be a big player in making work easier for line managers and employees. The second point is around cost. It’s a tough environment. And, obviously, as market share is perhaps not growing as fast as we’d like, we’re having to take costs out. Where are we going to do that? I think that’s going to change as we go forward. I think these disruptive technologies are going to come into it. Then there’s big data. HR departments at the moment have huge amounts of data, and they’re not using it very well. I would say that the capability of HR departments to understand data and use it is very limited. So, if you’re selling it or you’re using it, how are you going to get across that? Williams: I think it’s interesting that you finish on that point because I think what this technology delivers is actually more than what some people understand. It’s more than just a practical solution to a problem and cost reducer. If that’s not explained correctly, there’s a confusion of what the technology is delivering. And we’re missing a real opportunity to improve the operation. There’s genuine insight and intelligence that can come from some of these systems. Ettling: I think we concluded that comprehensive HRO as we knew it is officially dead. Transformational HRO is still possible. It requires a lot of focus and a lot of work. SaaS is going to have a phenomenal impact on HR outsourcing and HR services. It’s not yet clear how that impact will manifest itself, but it will change business processes going forward. WINTER 2014

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HRO Today Association

Bright Stars The annual awards honour those transforming the industry. By The Editors

With a theme of “BeTransformed,� the nominees for the HRO Today Services and Technology Association (then the HROA) annual awards represented the best of the best in the industry. These awards are the highlight of the year and an aspiration for those in HR operations and outsourcing. It

is the HROA vision to be the single recognised community for improving the quality, effectiveness, and efficiency of outsourcing as part of an overall HR service delivery strategy. The HRO Today Services and Technology Association would like to congratulate the following winners:

EUROPEAN RECRUITMENT CUSTOMER RELATIONSHIP OF THE YEAR

Pinstripe & Ochre House and Smiths Pinstripe and Ochre House began their relationship with Smiths Group, the global diversified engineering group at the time Smiths had embarked on a new global HR transformation. It began with Smiths Medical, one of the five divisions in early 2011. Smiths Medical approached Pinstripe & Ochre House with a view to partnering with an RPO who could aid with implementation of common global processes, reduce its recruitment costs, and introduce best practice to their new HR model. Goals were to improve the quality of their hiring process and in turn the quality of their hires, and attract technology and engineering talent in a highly competitive global market. Smiths also wanted to present a coherent and consistent employer brand to the market and felt it could only achieve this by controlling this presentation in partnership with a firm which fully understood its business and the aims of its strategic transformation agenda. As a result of the successful relationship with Smiths Medical, this partnership was extended across four divisions of the Smiths Group, i.e. Smiths Medical, John Crane, Smiths Detection and Smiths Interconnect with a view to creating a consistent and effective recruitment framework which would improve the quality of recruitment and talent management across all divisions.

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NOBODY SUCCEEDS ALONE

Global Operational Excellence • Service Delivery Models • Formation – Reformation – Transformation • Manage Your Resources From the Executive Suite to Employee Desktop

Where does the HR leader find the resources needed to help optimize internal resources and strategically employ external resources?

Work with your peers to build: GLOBAL COMMUNITIES

Share information with peers in your industry, of similar size, and in similar geographies who face the same challenges that come across your desk. Partner with other leaders and practitioners to improve operational outcomes and internal customer satisfaction.

INNOVATIVE TECHNOLOGY

Technology – used effectively – enables opportunity. Identifying and engaging the right technologies in the right situations at the right times are the keys to using it effectively.

ACCURATE DATA

Data drives decision-making. While data is abundant, relevant actionable data can be difficult to find and use to drive results. The HRO Today Institute marries the internal operational data volunteered by its members, with the global data collected by HRO Today and HRO Today Global magazines to build a library of internal and external practises in operation on a global basis.

Why The HRO Today Institute? HRO Today and HRO Today Global magazines are the definitive resource on HR outsourcing and operations for HR leaders. The 28,000+ HR leaders who have been reading HRO Today for years rely on our products and services to improve outcomes across their enterprises. On top of the wealth of data and content available in the pages (actual and virtual) of HRO Today and HRO Today Global, we provide senior executives with unparalleled learning, meeting, and networking experiences through a variety of vehicles, including events – from forums to webinars, market/client surveys, industry landscape analyses, case studies, and more. Through this rich extensive experience we have developed unequalled access to and relationships with the key players in the marketplace around the globe, putting us in a unique position to assist CHROs in achieving their goals of driving the HR-empowered enterprise. THE HR-EMPOWERED ENTERPRISE For more information, please contact Vince Albergato at 215-606-9562 (Vince.Albergato@SharedXpertise.com).

HRO Today Association

EUROPEAN RECRUITMENT CUSTOMER RELATIONSHIP OF THE YEAR

Société Générale and Randstad Sourceright Société Générale is one of Europe’s largest financial services groups. Since 2012, Randstad Sourceright has delivered a blended recruitment process outsourcing (RPO) solution for much of its U.K. operations. The blended workforce programme supports both permanent hires and contingent workers, and builds on its emerging talent pipeline to support the firm’s future development. The partnership provides Société Générale with a dedicated onsite team and innovative talent attraction methods to bring in the top talent to enable the group to meet its business objectives, all whilst delivering cost savings. The organisation is supported by an offsite shared services team enabling the solution to be highly flexible, depending on the needs of the business.

EUROPEAN GLOBAL CUSTOMER RELATIONSHIP OF THE YEAR

Procter & Gamble and IBM Throughout the landmark Procter & Gamble (P&G) and IBM relationship in EMEA that began in 2003, both parties have remained committed to visibly leading the HRO industry in defining the next generation of signature partnerships through service delivery excellence and innovation. This partnership story is about 1) moving beyond SLAs to successfully transform service delivery for the benefit of P&G EMEA employees in 32 countries; and 2) transforming the lives of team members — adding purpose, reward, and value to their careers. The partnership demonstrates to peers in the HRO industry that combining corporate DNA with the individual strengths of team members can achieve operational excellence . As evidenced by the continuation of the P&G/IBM relationship in EMEA for seven additional years starting in 2012, this partnership is setting the HRO industry standard for client/provider relationships and innovation whilst laying the groundwork to further raise the bar going forward.

EUROPEAN THOUGHT LEADER OF THE YEAR

Bruce Morton, Allegis Group Services Bruce Morton has more than 30 years of experience in the human capital and workforce management space. Recognised as a thought leader in the realms of the evolving workforce, employer branding and social recruitment, he partners with clients to bring them transformative talent acquisition solutions. As Allegis Group Services’ (AGS) Head of Innovation, Morton champions the development of new products and capabilities, from ideation to market delivery. These new solutions help organisations innovatively source and engage top talent and transform their employer brands. He has helped business leaders navigate the emergent social media realm and, in doing so, has created measurable results. His latest and most impactful innovation is 21st Century Resourcing: A dynamic social recruiting technology platform that integrates top technologies to create, engage, and measure thriving talent communities.

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HRO Today Association

Questioning Consolidation A roundtable of experts discuss reasoning behind the recent M&A activity.

CONTRIBUTORS: Steve Riley Accenture

By The Editors What is driving the consolidation of services providers in the HRO marketplace? Is it demand? Maturity? Business and economic pressures? A recent meeting of HRO Today Services and Technology (then the HROA) board members sought to find out. The majority of members see the consolidation as a positive business initiative, allowing provider organisations to expand their scope and global footprint. Consolidation is often viewed as a strategy to satisfy a broadening demand from clients to meet complete geographical coverage and service areas that were previously seen as gaps. The market has also been driving the need for a completeness of multiple service offerings under one provider. More and more clients are looking to simplify governance arrangements by using only one service provider which allows a single point of accountability. Provider organisations are also playing a role by identifying process expertise in specific areas where they feel additional value can be created or gaps in their capability. Traditionally, providers partnered with other service providers to fill those said gaps; whether it was technology partners or niche providers (payroll for example). But consolidation allows fewer, but more powerful providers to be in a position of shifting the market in a specific direction to everyone’s benefit. As the procurement function has become more engaged and as the market has matured, transactional HR deals have become a commodity purchase with goals of reducing margins and size of deal. So the ability to capture a strategic role that delivers value is increasingly important. Many of the mergers and acquisitions (M&A) have had significant technology elements to them with

Darren Bartholomew Selex Galileo

a specific focus on integration. A major challenge in the industry to overcome is making integration more seamless and less painful. Software-as-aService (SaaS) and analytics technologies continue to have significant impact in the marketplace, and providers acquiring assets in these spaces are clearly signaling a shift into the higher-value HR areas.

Gary Madden BP Howard Nelson Northgate Arinso

In order for service providers to justify the investment in innovation and new capability, they have to show a greater share of the market to their investors. Inorganic growth is one way of achieving this in a recession when investors think about the return on their various investments and businesses and the risks associated with them. The slowed organic growth as a result of the recession may be an indirect influence on service providers to replace it with market share generated through acquisition.

Sally Hunter Kelly Services Seb O’Connell Randstad Sourceright Paul Mallinson Hays Margaret Spink Xchanging

What types of companies are targets for M&A? Providers who entered the market with specific service strength and have failed to expand and broaden their service base from their original, have become natural targets for acquisition.

Sarah Seabury ISG Phil Cooper Allegis Talent2

Buyers will also focus on the personality, cultures, and capability of the organisations merging. This is an important factor in buying behaviour. Shared culture is becoming more important in this space compared to purely transactional activities. For examples, buyers may consider if the provider shares the company’s values around people and talent development.

Tim Johnson ADP Roger Robbertz DSM Steve Walsh BAE Systems

This agenda is predicated on a new paradigm shift: From the old cost-to-serve model towards broader business outcomes and value gained from end-to-end integration across towers, customer centricity, analytical insights and real bottom-line growth.

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Anthony Hesketh Lancaster University Management School

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Technically Speaking

Living Up to the Promise Will cloud-based technology transform the next generation of HRO? By Andy Spence

The HR technology sales machine has been hard at work creating demand for solutions which include words like big data, mobile, social media, and cloud. There is a lot of excitement around technology as a driver for change, particularly in talent acquisition, development, and workforce productivity. HR faces tough challenges—from finding future top performers to providing tools that monitor the performance of a global project team. According to recent research from Bersin by Deloitte, 61 per cent of organisations will be changing their HR technology in the next 18 months. According to NGA HR, by 2015, 85 per cent of all software will be cloud or Software-as-a-Service (SaaS)-based. With these developments, HR directors need to be informed of the opportunities the SaaS technology offers as well as its potential to transform HR. At the recent 2013 HRO Today Forum Europe in London, Mike Ettling, former CEO of NGA HR, commented: “The game-changing impact of SaaS is the fact that SaaS is melting business processes. In the past, we designed our system around the process; now we have to design our process around the system.” Will this new wave of technology live up to the hype and transform HR? In my experience, some healthy scepticism is natural, especially if you’ve had as many sleepless nights—like myself—working on HR transformation programmes over the last 20 years! I am reminded of the sales promises of the ERP systems back in the 1990s: consolidation of data, integration between HR and finance, and increased usability. In my view, the great hope of ERP technology did not deliver. Part of the problem is that the software ultimately has to be used by us pesky humans. Good design, robust governance, communications, training, and support are always needed irrespective of the next technological breakthrough. The Impact of Cloud Solutions on HR HR is currently in a pivotal position at the intersection of technology and people. In the corporate world, HR has been a pioneer in adopting many emerging technologies such as cloud applications like

Workday, Oracle Fusion, and SuccessFactors. A great benefit of a SaaS solution is avoiding the expensive and time-consuming customisation “fudges” we have all experienced. SaaS drives process standardisation because “you get what you are given” in terms of functionality, and then configure it for your organisation. As cloud implementations require little customisation, they are much quicker to launch. Sometimes, too quick for the organisation to digest the change impact. The technology can reduce the total HR transactional effort since less HR administration support will be required. These savings can be reallocated to strategic goals such as developing talent with learning solutions. I have seen the relationship between IT and HR gradually change with this wave of technology. With cloud solutions, there is less need for managing each piece of the technology infrastructure in-house. HR should have more weight in HR SaaS decisions, and be a stronger voice in how technology is used in the workplace. Impact of the Cloud on HR Outsourcing The impact of cloud technology also gives HR some interesting options with outsourcing. An attractive option for some organisations is to outsource chunks of HR processes on a standardised platform. At the same time, companies can outsource the management of the HR technology platform, therefore avoiding the cost and hassle of keeping up to date with the latest trends and regulations. The rise and rise of Workday has breathed life back into the HRO market with NGA HR, IBM, and Aon Hewitt having HRO contracts using Workday software. These deals so far are smaller in size because there is less HR administrative work to do. But my hunch is there may be more of them since this model will fit nicely with a new generation of agile HR operating models. HR is at an important interchange in its journey and in a strong position to lead change. These technology trends can be the catalyst for HR to completely transform itself and the wider organisation.

Andy Spence is HR transformation director with Glass Bead Consulting and writes the HR Transformer blog.

Key Takeaways •

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HR will need to streamline processes around the software, not the other way round.

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• HR can support the rest of the organisation to deliver the benefits of new technology, using its experience of implementing HR software and supporting the people elements of change.

Cloud will provide more options for outsourcing to fit in with more agile HR operating models.

HR will need less resource for administration, but can reallocate this towards more strategic goals.

Highlight Reel

All you need to know about the HRO Today Forums.

 

Many exciting things have happened since the last issue of HRO Today Global magazine! The HROA has now evolved into the HRO Today Services and Technology Association, as you have no doubt read from this issue’s cover story. We are seeing an unprecedented level of interest across talent acquisition, engaging the workforce, and technology. But maybe even more interesting is the increased uptake in the broad HRO deals and the requirement for updated standardised documentation as an industry standard. Through the association, we will be addressing all these areas plus more. Take a look at the calendar at www.hrotoday.com/ association for upcoming discussions, webinars, twitter chats, and face-to-face sessions.

EUROPE HIGHLIGHTS •

AdvantagexPO, Agile1, and PeopleScout start the line-up of our key sponsors of the event in 2014. The entrance of many new players will give a more diverse set of conversations for our delegates.

The agenda is already outlined and slots are being fulfilled as we speak. Featured speakers will also start to appear in the coming magazine issues. The topics we will focus on this year include: •

Sourcing

Payroll

Engaged workforce

Enabling technology

Evidence-based HR

Talent Acquisition

Remember to keep checking the events page for regular updates of speakers, early-bird discounts, and much more.

Before the next issue of HRO Today Global, we will launch the iTalent competition for Europe. Be sure to check out www.hrotodayforum.com/eu to find out more and get regular updates.

www.hrosummits.com/eu

We’re quickly approaching the HRO Today Forum North America (5-7th May) and the HRO Today Forum APAC (2122nd May). Early bird discounts, hotel rooms, and available tickets are sure to run out as the event gets closer so register now to avoid disappointment! Planning is also well underway for the HRO Today Forum Europe later in the year in Edinburgh (11-13th November). At each Forum, we will be discussing and proposing solutions to the HR Value Equation: Great HR + Great Workforce = Great Business Outcomes. Below are some of the highlights of the upcoming events, but be sure to check the websites to stay current on all updates.

APAC HIGHLIGHTS •

The APAC Forum has more delegates registered three months out than ever before including Maersk Singapore Pte Ltd, Siemens Pte Ltd, Elabram Systems Sdn Bhd, Citibank, Novartis, Singapore Post Ltd., plus many more senior-level HR and talent professionals.

Speakers include experts from Standard Chartered, P&G, JP Morgan, Singapore Post and MacDonalds, as well as thought leaders across the provider community.

www.hrosummits.com/apac EVENTS • • • • •

May 5 – HRO Today Annual Awards Gala Awards in Philadelphia May 5-7 – HRO Today Forum North America, Philadelphia May 21-22 – HRO Today Forum APAC, Singapore November 11-13 – HRO Today Forum Europe, Edinburgh Other webinars, training programmes, twitter chats and more are all on the HRO Today calendar of events.

The best way to keep up-to-date is to join the mailing list as this updates all the time! Contact Bill.Macrae@SharedXpertise.com to register on the appropriate lists.

For content queries or if you’d just like to find out more, please email me, Faye.Holland@SharedXpertise.com @FayeHollandUK @HROTodayEU @HROTodayAP

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2014 HRO Today Forum Events

HRO Today Forum North America May 5-7, 2014 USA

HRO Today Forum APAC 21-22 May 2014 Singapore

HRO Today Forum Europe 11-13 November 2014 Edinburgh


HRO Today Global Winter Edition