Talent Management in Focus: The Technology Baker’s Dozen Handheld Handholding Why the RPO Beat Goes On Plus: News From the HRO Today Institute
Contents Cover story Y Not? The tales of intergenerational differences in employment attitude are spot on. Except when they aren’t. By Brent Skinner Page 10
Managing Talent
Contingent Labor
Columns
12 2013 Baker’s Dozen Customer Satisfaction Ratings: Talent Management Technology We rank the top providers of talent management software based on customer satisfaction surveys. By The Editors
32
50
The Benefits Package It’s not too late to gear up for implementing Obamacare. But it’s getting close. By Karen Frost and Lisa McDougall
52
Institutional Knowledge The HRO Today Institute has bold plans for 2013. You can make them bolder. By Elizabeth Boudrie
54
Technically Speaking Acquisitions, clouds, data, mobility: Your 2013 checklist. By Madeline Laurano
55
The Employment Report A recession—and a recovery—like no other. By Michael Beygelman
18 Mobility Utility Job seekers are increasingly searching via handhelds. Are you configured? 22 Global Meets Local Investing in a targeted, regionalized approach for recruiting pays off. By Jill Kuhlman 24 Recruitment Deficit How one debt collection management shop filled its staffing shortfall. By Adam Robinson
Employee Screening 39
To Screen or Not To Screen? Before running an employee check, decide if it’s a risk mitigator or money waster. By Debbie Bolla
HRO Today Forum 44
Nursing a Problem A survey of the largest health profession tells a lot about Obamacare. First of a series, leading to our May 1-2 forum in Philadelphia. By Marcia Faller
Eye on Healthcare
Departments 6
48 26 The Beat Goes On From sourcing and screening to vendor management and media planning, the RPO parade keeps marching. By the Editors
Technology Lending a Hand Take control of your temporary workforce with a VMS. By Debbie Bolla
The Consumer In You Change the way you treat employees’ relationship to healthcare. The result? Increased satisfaction and decreased costs. By John C. Stoddard
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8
Edit Note Obvious and Oblivious CEO’s Corner Taking Your Measure Upside News From the World of Work
JANUARY/FEBRUARY 2013
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Editor’s Letter
Obvious and Oblivious “You can be a millionaire—and never pay taxes! You can be a millionaire—and never pay taxes!” Some of you might remember this old bit from Steve Martin on Saturday Night Live. With his trademark, over-the-top emoting, Martin would repeat the line with an almost incantatory fervor. “You can be a millionaire—and never pay taxes! You can be a millionaire—and never pay taxes!” And then would come the payoff. “You say, ‘Steve, how can I be a millionaire—and never pay taxes?’
“First… get a million dollars.” As devotees of philosophy (or, at least, the philosopher’s stone) will attest, this construction is a tautology—a redundancy of propositional logic. It restates the obvious for rhetorical effect. Channeled through the likes of Steve Martin, it is nothing short of hilarious. But a technique that is funny in a club setting at a few minutes before midnight can, when articulated during broad daylight by a social critic, come closer to annoying or irritating. In a recent piece for The New York Times, Erin Hatton achieved just that effect. Providing an otherwise enlightening history of the temporary workforce in America, the writer succumbed to a diagnosis that was as obvious as her prescription was oblivious. (Astute readers will note that my colleague Mike Beygelman, recently installed as RPO president of workforce solutions provider Pontoon, also cites Prof. Hatton’s work on page 55, though the overlap is, I assure you, purely coincidental—and not at all tautological.) In addition to serving as assistant professor of sociology at the State University of New York, Buffalo, Hatton is the author of The Temp Economy: From Kelly Girls to Permatemps in Postwar America.” At the outset, she does a credible job of describing the spike in our country’s use of temporary and contingent labor, citing an observation by the American Staffing Association (ASA) that this category has added more U.S. jobs during the past three years than any other. Hatton also provides a concise history of the phenomenon during the preceding 60 years or so. To review: First came the Russell Kelly Office Service, which morphed through Kelly Girls Services into what is today Kelly OCG. Next came Manpower Inc. These developments, notes Hatton, occurred at the height of union power, which had largely helped guarantee the existence of worker’s compensation, pensions, health benefits, and other protections in shops both closed and open. Then, what began as a sexist dodge of such perks—because the reduced dividends only affected “girls”—gradually seeped into the mainstream workforce. The “rent” rather than “buy” argument achieved increasingly influence, especially during the first stage of post-industrial shakeouts of the 1970s and 1980s. “Nor,” Hatton observes “did the numbers slow when good times returned: Even through the economic boom of the ‘90s, temporary employment grew rapidly, from less than one million workers a day to nearly three million by 2000.” Hatton elides current ASA research showing that the average daily temp numbers have not increased since then. Which is disingenuous, and perhaps even dishonest. But that’s not the point. She is right that temp work has become bigger than ever in the past six or seven decades, and she properly raises questions about the implications for America’s workforce and, indeed, for society at large. But ignoring the reality this phenomenon is at least partly a logical, market-based reaction to globalization and technology is myopic. Pretending otherwise does nobody any good. Besides, that’s where she stops. “If we want good jobs rather than just any jobs,” she concludes, “we need to figure out how to preserve what is useful and innovative about temporary employment while jettisoning the anti-worker ideology that has come to accompany it.” Well, sure. Which is why the media platform that you’re consuming right now has spilled a lot of ink and pixels trying to wrestle with precisely those challenges. See the contributions in our pages of Peter Cappelli and Lynda Gratton, and also pay attention to the time spent in this particular space looking at the need for American employers and secondary education to recommit to training and mentoring programs. But concluding a glib critique of temporary work services with a facile plea for “figuring out” one of this country’s most complicated and pressing needs is a disservice to readers. Hatton has left unanswered the million-dollar question. Oh wait, maybe the answer is simple: First… get a million dollars.
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HRO TODAY MAGAZINE
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Dirk Olin, Editor-in-Chief
CEO’s Letter
CEO: Elliot H. Clark Elliot.Clark@SharedXpertise.com Editor-in-Chief: Dirk Olin Dirk.Olin@SharedXpertise.com Managing Publisher: Gale Tedeschi Gale.Tedeschi@SharedXpertise.com Managing & Online Editor: Debbie Bolla Debbie.Bolla@SharedXpertise.com Vice President of Research: Elizabeth Boudrie Elizabeth Boudrie@SharedXpertise.com Vice President of Marketing: Bill MacRae Bill.MacRae@SharedXpertise.com Contributing Writers: Russ Banham, Katie Kuehner-Hebert, Brent Skinner Webmaster: Michael Fernandez webmaster@SharedXpertise.com
Subscription services: For subscriptions, renewals, changes, and back issues, e-mail subscriptions@SharedXpertise.com.
About HRO Today magazine HRO Today Magazine [ISSN #1541-3551] is published [10x] by SharedXpertise, LLC © 2013. All Rights reserved. URL: www.HROToday.com. Editorial correspondence and press releases: Dirk Olin, Editorial Director, SharedXpertise, 343 Thornall Street, Suite 515, Edison, NJ 08837 or editorial@SharedXpertise.com. All letters should include the writer’s e-mail address and/or phone number. Business and advertising correspondence: SharedXpertise, 343 Thornall Street, Suite 515, Edison, NJ 08837, 732-476-6160. Subscriber services: SharedXpertise, 343 Thornall Street, Suite 515, Edison, NJ 08837, 732-476-6160, Fax: 732-476-6155 or e-mail subscriptions@SharedXpertise.com. Reprints: contact Foster Printing Service, 866-879-9144 or sales@fosterprinting.com. Postmaster: send address changes to SharedXpertise, 343 Thornall Street, Suite 515, Edison, NJ 08837. Fax: 732-476-6155. 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.
Taking Your Measure Each year, SharedXpertise hosts the global series we call the HRO Today Forum. In the year leading up to the forum, we vigorously debate what we should use as a theme. We have had topics at our past conferences ranging from “Empowering HR” to “Running HR As A Global Business.” We strive for important and thought-provoking content each year and have fashioned the content around the theme. I launch a personal crusade at times about the importance and under-appreciation of the HR function by many other departments. I recognize that, if HR professionals were good at self-promotion, they would be in public relations or marketing. But HR does have a profound influence, and this year we at HRO Today have been talking about measuring impact. What does HR do that a CEO would reference in an earnings call? Or, to put it another way, how can HR tie its impact in the business to a metric that a CEO would cite on an earnings call? I have written about this before, and I speak about it often. The fundamental impact of HR is, simply put, the quality and productivity of the workforce. And that is the focal theme of this year’s HRO Today North America Forum. This is not going to be a “stand and give yourself a round of applause” conference. This is going to entail a hardnosed look at the partnerships, technology, metrics, and tools that you need to maximize the quality of your workforce and have a profound impact in the business overall. This issue has many aspects, but the bedrock, fundamental truth is that the quality of the workforce, both permanent and contingent, drives the outcome of the business. All CEOs and other C-Suite execs know this, but it is the measurement and the systems of measurement that confound the argument. So, what will be different this year? A lot more data and research will be presented. Some of the data will be a measurement of perceptions. Others will be topics such as how to achieve measurement-based HR programs around recruitment. We will be hosting a series of “Baker’s Dozen Panels” through which executives from our respected HRO Today Baker’s Dozen Customer Satisfaction Surveys will offer insight into what they believe is the core of high quality service to the HR infrastructure in their respective sectors. We will, also, have a lot more short format presentations that will cover innovation and datadriven subjects in 10-minute addresses. We will have more audience interactive panels. We will be covering technology with our annual and very popular iTalent Competition, which will showcase the newest HR technology with the audience helping a panel of noteworthy judges appraise the latest and maybe soon to be the greatest products. Technology is the great enabler of all HR and HRO, so we will, once again, have our Innovation Stations at which you can interact with the latest technology, one-on-one. And, finally, we will once again be doing debates on such topics as how to make HR more “relevant” (metrics and organizational issues—for example, is the popular Ulrich model likely to work for future business?) We also will have a program on using gamification in HR, with the Wharton School’s Kevin Werbach, author of For the Win. And, of course, we will be doing this all with a host of great speakers from both provider and practitioner backgrounds. There will also be great networking opportunities as well for you to meet new friends and interact with existing members of your network. We hope to see you there, as it will be another great opportunity to learn, research, and network. Join us in Philadelphia at the Ritz Carlton Hotel for the opening reception the night of April 30 and the event on May 1 and 2. You can find more information and register at www.hrotodayforum.com.
Dirk Olin, Editor-in-Chief Elliot H. Clark, CEO
Upside
NEWS FROM THE WORLD OF WORK
BPO Bounceback The insurance business process outsourcing (BPO) market has witnessed its highest activity in the last two years, reports a new study. The report, A PEAK Into the Leaders, Major Contenders and Emerging Players of Insurance BPO, comes from Everest Group’s Skand Bhargava, Rishabh Gupta, Saurabh Gupta, and Rajesh Ranjan. The number of insurance contracts that were signed between 2011 and 2012 came to more than double the number that were signed during the peak of the global economic downturn of 2008 and 2009, which also affected insurance companies severely. As the market expands, the researchers say, insurers are looking at BPO as a key tool to cut costs, improve operations, and manage regulations. Service providers are, in turn, differentiating their offerings through better technology, strong delivery capabilities, and the ability to serve niche segments.
Everest Group classifies 10 insurance BPO service providers on the Everest Group Performance Experience Ability Knowledge (PEAK) matrix into three categories: leaders, major contenders, and emerging players. The PEAK matrix is a framework to assess the absolute market success and overall capability of service providers. The 2012 insurance BPO PEAK matrix comprises these providers: Leaders • EXL Service • TCS • WNS
Major contenders • Genpact • HCL • Infosys • Wipro
On the Move Lumesse Talent management solutions provider Lumesse has named Thomas Volk as its CEO. Volk is a highly successful enterprise technology executive with a considerable track record. He started his career with HP in Germany and the U.K. before moving to the U.S., where he spent more than five years in a variety of global sales and marketing roles. In 2002, Volk joined Sybase as executive vice president for its product group and later led Sybase’s International business. Upon returning to Europe in 2006, Volk took the role of CEO of IDS Scheer, a 3,000-person company focused on business process management software and SAP services solutions.
Hudson Global, Inc. Talent solutions company Hudson Global has appointed industry veteran Lori Hock as CEO of Hudson Americas. She will be responsible for the strategic direction, operations, and profitability of Hudson Americas.
According to the research, leaders account for about 60 percent of the overall insurance BPO market in terms of revenue and are growing at a healthy rate. EXL Service is the biggest player in the United States BPO insurance market, withTCS leading in the United Kingdom BPO insurance market Call for Nominations HRO Today is currently seeking nominations for our annual TekTonic Awards, recognizing innovation and disruption in the world of technology. The award categories include: • Talent Management/Recruiting HRO TODAY MAGAZINE
Nominations are due by February 15, 2013. Please email your nomination, including a description of why your product offers disruptive innovation to Managing Editor Debbie Bolla (Debbie.Bolla@SharedXpertise.com). The winners will be featured in the June issue of HRO Today.
More recently, Volk has been leading Dell’s commercial business in the U.K., France, and Germany and has been involved with a number of earlier stage, high growth SaaS software companies. He is also chairman of P&I and SNP, two publicly listed software companies in Germany.
Emerging players • Capgemini • Cognizant • Serco
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• Performance Management • Compensation (Payroll/Benefits) • Learning • HR Social Media • Vendor Management Solutions • Workforce Management (Time/Attendance) • HRMS Suites • Overall HR TekTonic Winner
| JANUARY/FEBRUARY 2013
Hock has more than 25 years of staffing industry experience. She most recently held the position of president, Adecco MSP Solutions Americas, driving significant revenue growth, and she served as a member of the global solutions executive management team, overseeing strategy, business development and innovation. Hock began her career at TAD, rising to the position of area vice president with responsibility for regional management and strategic planning before the company was acquired by Adecco.
Be Transformed
SUBMIT YOUR NOMINATIONS FOR THE 9TH ANNUAL HROA AWARDS! Recognizing Marked Achievements In The Advancement of HRO Submit Your Nominations Today @ www.HROA.org. Nomination Deadlines: 路 Trustee, North America and Asia Pacific - March 1, 2013 路 Europe, Middle East and Africa - July 31, 2013
www.HROA.org
HR Outsourcing Association Connections
@HROA
Talent Acquisition
Y Not?
The tales of intergenerational differences in employment attitude are spot on. Except when they aren’t. By Brent Skinner
People try to put them down, just because they get around— around the Internet and the job market, that is. That’s the fable of Millenials, and as with most fabulous beliefs, it has some plausibility. Millennials, also referred to as Generation Y, present a challenge for any recruiter. They display traits uncharacteristic of Baby Boomers or Generation X: Finding, attracting, hiring and keeping Millennials are feats demanding social media savvy, keen insight into their psyches, and patience. And a slew of apps are emerging to tackle these challenges. But let’s first look at some numbers, which reveal
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that the generations have far more in common than the hype has suggested, and also that our assumptions regarding who is where online might be inaccurate. More than 90 percent of jobseekers from each of these three generations turn regularly and primarily to job boards, according The Multi-Generational Job Search, a report compiling findings from a survey of 5,268 jobseekers comprising 742 Gen Y (18-29 year olds), 1,676 Gen X (30-47), and 2,850 Baby Boomers (48-67). The results of the survey, jointly conducted during the summer of 2012 by Millennial Branding and Beyond.com, unearth additional
Talent Acquisition
More Baby Boomers than Millennials (29 percent versus 23 percent) turn to social networks for their job searches. However, in preparing for an interview, more Millennials (25 percent) than Baby Boomers (16 percent) or members of Generation X (19 percent) seek to interact with the hiring organization’s social media profiles. similarities in job-searching habits: Fewer than 15 percent of all generations, for instance, have their own websites for the search. The study’s results show differences, too, in searching behavior among the generations. Some of these results are surprising, running counter to conventional wisdom and underscoring or contradicting other findings within the results. For instance, more Baby Boomers than Millennials (29 percent versus 23 percent) turn to social networks for their job searches. However, in preparing for an interview, more Millennials (25 percent) than Baby Boomers (16 percent) or members of Generation X (19 percent) seek to interact with the hiring organization’s social media profiles. Notably, 90 percent of Millennials who use social media for the job search flock to Facebook to do so, according to the National Association of Colleges and Employers’ 2012 Student Survey. “The challenge with recruiting Millennials is that they expect to build social relationships with everyone from their high school friends to their favorite public figures,” says Stéphane Le Viet, CEO and founder of Work4 Labs, provider of technology designed to improve the job-seeking experience on Facebook. “It’s no different for companies and brands; the key to successfully attracting Millennials to your open jobs is to start by building a relationship with them.” Technology designed to help improve the candidate experience rarely serves any one generation, let alone Generation Y. Nevertheless, technology is incrementally helping to reconcile the candidate experience that hiring organizations create with the behaviors of jobseekers and passive candidates generally, catering to jobseekers’ online haunts and preferences. And the information available on jobseekers and passive candidates alike grows, aiding the hiring organization. “Employers have access to more information on candidates than ever. With traditional resumes, social profiles, and individual online brands, organizations are equipped with the data necessary to create the custom experience that candidates, and in particular Millennials, have come to expect,” says Mike Hennessy, CEO of SmashFly Technologies. “It’s important for employers to use tools
that enable them to tap into and interpret this data so that they can provide targeted messaging.” SmashFly recently announced enhancements to its recruitment marketing platform (RMP), which are designed to improve the way employers find, attract, and engage talent, as well as measure the results of their recruiting efforts. SmashFly’s RMP, Wildfire™, integrates with any ATS to provide a wide range of capabilities critical to the marketing of open positions. Also recently, iCIMS announced the launch of Connect, an addition to the company’s suite of talent management products. Connect simplifies and enhances the ways that recruiters can identify and engage with passive candidates online, not necessarily to hire them now, but to build a pipeline for the future. The system builds on the notion implied in Millennial Branding and Beyond.com’s joint research—i.e., that all candidates, passive and active and especially Millennials, are striving to interact with employer brands. Even in today’s stagnant economy, hiring essentially means selling. Too many hurdles will dissuade talent from applying. In order to weed out the undesirable talent—who will persist, because they need the work—smart hiring organizations might consider clogging the public process with roadblocks while running a parallel, less public effort to woo talent for the same position. Organizations with hard-to-fill positions might be wise to choose different strategies. “It’s important, in the eyes of a marketing person, to say, ‘We want to make sure we don’t lose these guys,’ ” says Susan Vitale, chief marketing officer for iCIMS. “If the initial steps to apply for a job are cumbersome, people will leave.” By streamlining the process it employs to qualify candidates to purchase its own recruitment marketing software, says Vitale, iCIMS intends to emulate the approach those buyers ought to use in recruiting: “Whether it’s Millennials or others, make sure you don’t lose candidates early in the game. Once you’ve determined whether or not they’re a good match, then you can delve into additional hoops for these jobseekers.”
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Baker’s Dozen: Talent Management Technology
2013 Baker’s Dozen Customer Satisfaction Ratings: Talent Management Technology HRO Today’s Baker’s Dozen rankings are based solely on feedback from buyers of the rated services; the ratings are not based on the opinion of the HRO Today staff. We collect feedback annually through an online survey, which we distribute both directly to buyers through our own mailing lists and indirectly by sending service providers the link to send to their clients. Once collected, response data are loaded into the HRO Today database for analysis to score each provider that has a statistically significant sample. For this survey, we required 10 responses from 5 companies, and we received feedback from more than 100 verified customers. In order to determine an overall ranking, we analyze results across three subcategories: scope of features, market environment (size of the installations the provider typically has with the reviewed suite or product) and quality of service. Technology differs from the other servicebased HRO Today Baker’s Dozen Customer Satisfaction Surveys. Therefore we use a different methodology that more equally weighs the scope of the software and the size of the average respondent’s install (typically the number of seat licenses). We more equally weigh these components as we understand that the capability of the software is as important as the quality of support from a help desk. Using a predetermined algorithm that weighs questions and categories based on importance, we calculate scores in all three subcategories as well as an overall score. The rankings are based on those scores. The numbers presented in the tables on pages 16 and 17 represent those calculated scores; we include them to demonstrate the relative differences among the ranked service providers. While we do not claim that our methodology is the only viable ratings program available we do vouch for its statistical validity. We hope this ranking provides you some insight into your next RFP process.
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Baker’s Dozen: Talent Management Technology
1. Lumesse
management solutions, bringing a
• Onboarding solution
unique combination of cloud-based
• Performance management solutions
technology, content, and consulting
• Succession management
services that integrates people, data
• Compensation management
Lumesse helps customers globally to
and processes, providing solutions
• Competency libraries and job
implement local talent management
to engage a smarter, more effective
initiatives that identify, nurture,
workforce across their most critical
• Learning solutions
educate and develop the right people,
business functions. Kenexa serves
• Surveys
in the right place, at the right time.
more than half of the Fortune 500
• Compensation solutions and content
Our multi-cultural background and
and offers the most comprehensive
• Leadership development
presence means we understand how
set of talent management solutions
to deliver talent solutions that work
in the market. Its solutions include
Most important metrics:
the way our customers work, as
recruiting technology; RPO services;
• Hosting downtime/uptime
individuals and as teams, because no
employment branding; assessments;
• Host latency or seconds of
two people, organizations or cultures
job descriptions; competency
are the same. We work with 1,900
libraries; competency management
customers in more than 70 countries.
technology and services; onboarding
Our integrated talent management
technology and services; employee
and learning solutions are
engagement surveys and services,
comprehensive, intuitive, secure and
performance management;
available in more than 50 languages.
succession management;
Website: www.lumesse.com
description library
load performance • Customer support response time 3. iCIMS Website: www.icims.com
compensation management and Key clients: Nike, GlaxoSmithKline, Merck,
compensation analytics data and
iCIMS, a provider of innovative
RBS, Virgin Atlantic, Sara Lee
technology; leadership development
software-as-a-service (SaaS) talent
content and services; learning
acquisition solutions, is an Inc.
Features and services:
management; learning content
500 and software satisfaction
• Recruiting
management; mobile learning; and
honoree focused on solving
• Onboarding
social/collaboration solutions.
corporate business issues through
• Learning management
the implementation of easy-to-use,
• Performance management
Key clients: Royal Dutch Shell
scalable solutions that are backed
• Compensation management
“Shell”, Sears, Kohls, Best Buy,
by award-winning customer service.
• Skills and competency management
CVS, Boeing, YUM China, Huawei,
iCIMS’ talent platform enables
• 360 degree feedback
and Minstry of Defense
organizations to manage their
• Career and succession planning
entire talent acquisition lifecycle Features and services:
from sourcing to recruiting to
• Applicant tracking solution
onboarding all within a single
• Employer branding
web-based application. With more
• Social sourcing
than 1,400 clients worldwide, iCIMS
• Interview builder
is one of the largest and fastest-
• High volume hiring module
growing talent acquisition system
Kenexa, an IBM company, is a global
• Recruitment process outsourcing (RPO)
providers with offices in North
provider of recruiting and talent
• Assessments
America, U.K., and China.
• HR analytics 2. Kenexa Corporation, an IBM Company Website: www.kenexa.com
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Baker’s Dozen: Talent Management Technology
Key clients: The Bon Ton Stores,
or compensation. The company is
Rue21, Banner Health, Fifth &
committed to helping organizations
manages job descriptions and
Pacific Companies, Penn National
build their workforces, get better
integrates them with the talent
Gaming, Treasure Island Las Vegas,
results through a high performing,
management processes to help
Trump Entertainment Resorts
aligned, and engaged workforce,
ensure all employees know their
Holdings L.P., Stantec and Bayada
and establish their talent as a lasting
current job responsibilities and clearly
Home Health Care
competitive advantage.
• Halogen Job Description Builder™
understand what’s expected of them. • Halogen eRecruitment™ aligns
Features and services:
Key clients: API Technologies
and integrates talent acquisition
• Connect
Corporation, SGT, Inc., NYU Hospitals
with talent strategy.
• Recruit
Center, Stewart & Stevenson LLC,
• Onboard
Bragg Communications Inc., Toshiba
Most important metrics:
• Social Distribution
America Medical Systems, Inc.,
• Employee engagement
Thomson Directories Limited, Girl
• Quality of hire
Most important metrics:
Scouts of the USA, Children’s Miracle
• Competency ratings and gap analysis
• Reduce cost per hire
Network Hospitals, Herff Jones, Make-
• Performance goals met or exceeded
• Reduce time to fill
A-Wish Foundation of America, Viejas
• High potential metrics
• Reduce vendor reliance
Enterprises, and The Nuance Group AG
• Turnover
• Reduce rate of turnover
• Training effectiveness
• Reduce new hire time to productivity
Features and services:
• Improve compliance/reduce audit risk
• Halogen eAppraisal™ simplifies
• Increase talent pools/pipeline
and streamlines the entire employee
• Increase sourcing/recruitment
performance management process by
marketing effectiveness
conducting performance evaluations,
5. Hireology Website: www.hireology.com
• Increase recruiter productivity
developing critical talent, and
• Improve candidate quality
ensuring employee goals are aligned
Hireology’s selection management
with those of the organization.
system helps companies organize
• Increase recruitment reach and employment brand presence
• Halogen eSuccession™ uses a easy-to-use talent pool model.
4. Halogen Software
• Halogen eLearning Manager™
Website: www.halogensoftware.com Halogen offers the first and only cloud-based talent management system that’s been purpose-built
their hiring process and leverage data to make better hiring decisions. Franchise systems, banks and
schedules, manages, and tracks all
financial institutions, healthcare
learning activities, and measures
systems, dealer networks, and small
the effectiveness of your training
to midsize businesses use Hireology’s
investments in terms of improved
web-based Selection Manager™ to
employee performance.
deliver consistent and repeatable
• Halogen eCompensation™ provides
hiring decisions in the field, leading
from the ground up to reinforce and
all levels of management with secure,
to better hiring decisions, lower
drive higher employee performance
simple-to-use tools for distributing
turnover, and increased profitability.
across all talent programs—whether that is recruiting, performance
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• Talent pool assignment
merit-based compensation. • Halogen e360 Multirater™ can conduct
Key clients: 1-800-GOT-JUNK?,
management, learning and
comprehensive 360-degree assessments
Papa Johns Pizza, Coyote Logistics,
development, succession planning,
over the web.
Mario Tricoci/Red Door Salons,
HRO TODAY MAGAZINE
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Baker’s Dozen: Talent Management Technology
Homehelpers, Padgett Business
social media CRM to empower
browser, or integration requirements.
Solutions, Certa Pro Painters, US
consultants, contractors, and employers
It’s SaaS model makes it accessible
Lawns, and Aarons Rentals
with powerful HRIS supported by
from anywhere at any time, and offers
highly skilled recruiting and customer
unlimited integration capabilities. The
Features and services:
care representatives. Brainhunter.
system supports businesses ranging from
• Applicant tracking system
com by Zylog provides contractors
a small office to large enterprises.
• Job profiling
with unparalleled services, benefits,
• Competency modeling
training, and personal development
Key clients: GE Money, HCR
• Fully-hosted career site with
previously reserved for employees of
ManorCare, P J United (Papa Johns
Fortune 500 organizations.
Franchise), Harry & David, Hoss’s Steak
online application • Integrated posting to major job boards
and Sea House, FGX International,
• Social recruiting console
Features and services:
• Fully-scripted, multi-step interviews
• TalentFlow is an applicant tracking
and Sirona Dental Systems
system that is fully web-based for an
Features and services:
• Compensation analysis/comparison
end-to-end solution that simplifies
• Recruiting and sourcing include SEO,
• Behavioral assessments
recruiting through automation
with scorecards
branded, mobile-enabled career site;
• Online skills testing
• Free SMB job board posting
employee referral portal; job boards
• Criminal background checks
• HireFlow payroll processing includes
and social networks integration;
• Credit reports
talent management HRIS, CRM, and
resume and social media parsing
• Drug screening
payroll service
tools; prescreening with job specific
• Credit and criminal background checks
• Managed services include staffing, resourcing, and training plans
Most important metrics:
• PowerBuilder migration
• Percentage of candidates who remain
• TrekLogic migration practice
employed six to 12 months after hire
• IT Consulting
• Number of candidates sourced per job
application processes; interview scheduling and tracking; assessments; and background checking vendors • Tracking includes requisition creation, approval, management, and fulfillment; user configured searching
• Time to fill
Most important metrics:
and resume mining; applicant
• Percent of candidates hired using
• Fulfillment of candidate requisitions
workflow management and
Hireology’s interview/scoring system • Cost per hire
within the time prescribed • Fulfillment of candidate requisitions at the highest rate among agencies.
6. Zylog Systems (Canada) Ltd
reporting; hiring manager feedback process and portal; EEOC and OFCCP compliance tools; comprehensive analytics and reporting.
7. myStaffingPro Website: www.zylog.ca
• Onboarding and hire include offer letter and approval process;
Website: www.mystaffingpro.com Providing professional services and
onboarding with eSignature; hiring metrics reports; integrations with HRIS,
solutions with local delivery teams,
myStaffingPro is a comprehensive
Zylog proudly represents top talent
recruiting platform that offers applicant
WOTC, and E-Verify
in IT, engineering, healthcare,
tracking, candidate recruiting, and
Most important metrics:
government, and retail positions. As
onboarding in a scalable, configurable
• Time to fill
an application designer and developer,
solution. With more than 500 clients,
• Requisition aging
Zylog has introduced an enterprise
myStaffingPro is not limited by industry,
• Cost per hire
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Baker’s Dozen: Talent Management Technology
Provider
Overall Score
1. Lumesse
388.83
2. Kenexa, an IBM Company
369.38
3. iCIMS
354.25
4. Halogen Software
352.33
5. Hireology
321.90
6. Zylog
314.00
7. myStaffingPro
291.17
Provider
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Breadth of Features
1. Halogen Software
7.50
2. iCIMS
7.00
3. Kenexa, an IBM Company
6.75
4. Lumesse
6.50
5. Hireology
6.20
6. Zylog
6.00
7. myStaffingPro
6.00
HRO TODAY MAGAZINE
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Baker’s Dozen: Talent Management Technology
Provider
Size of Deals
1. Lumesse
7.50
2. Kenexa, an IBM Company
6.38
3. Zylog
4.67
4. iCIMS
4.25
5. Halogen
3.67
6. myStaffingPro
3.00
7. Hireology
2.80
Provider
Quality of Service
1. Hireology
172.90
2. Halogen Software
166.50
3. iCIMS
164.25
4. Lumesse
141.33
5. myStaffingPro
141.17
6. Kenexa, an IBM Company
140.63
7. Zylog
130.67
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Talent Tech
Mobility Utility Job seekers are increasingly searching via handhelds. Are you configured? In the United States, nearly everyone owns a mobile phone. By 2016, the number of mobile devices is expected to surpass the world’s population—an 18-fold increase between 2011 and 2016. Increased smartphone use and WiFi capabilities mean mobile devices are beginning to seriously rival laptops and desktops as a primary method for Internet browsing and communication. SimplyHired’s new survey Mobile Recruiting Outlook takes a deep dive into how mobile has changed job search and recruitment. Job seekers are leading the job market in mobile adoption and turning to mobile devices to browse for job openings on the go because it saves both time and energy. In addition, mobile phones offer privacy and the ability for job seekers to access website outside of corporate firewalls, or to easily step away if necessary. Mobile accessibility allows people to job search at any time, from anywhere—opening up opportunities not previously available, even online. Clearly the rise in mobile capability and adoption has opened up new ways for employers to communicate with job seekers, and employers without a solid mobile presence will be left behind. Employers must provide a seamless experience between their online site and their mobile presence to attract potential candidates. In many instances, traffic improves once companies optimize their
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| JANUARY/FEBRUARY 2013
sites for mobile. Seven out of 10 people already search for jobs via mobile devices, and three out of 10 job seekers have already applied for a job via a mobile device. There are many different apps related to job search, resume writing, and interviewing available for download. iTunes offers more than 70 job search apps. The mobile app industry itself has created 500,000 jobs in the U.S. since 2007. As mobile job search becomes more defined and clear in terms of what is needed to make the process as effective as possible, key apps and players in the industry will emerge as leaders in the space. If employers want to be ahead of the curve, they must step up to the plate and develop their mobile strategy, which should include mobile apps. Mobile Recruiting For hiring managers, the mobile boom allows for faster turnaround times and a new way of connecting with candidates and satisfying their needs. After people apply to a job, they end up anxiously waiting to hear back for the next step. One way to leverage mobile would be to respond to a candidate with an SMS (short message service) message, confirming that their application has been received. A mobile phone is the one device that individuals have closest at hand.
Talent Tech
Employers need to focus on creating easy-to-use, mobilefriendly website and career pages to reach and satisfy onthe-go, time-strapped candidates. Job seekers are eagerly embracing mobile: • 72 percent of job seekers want to receive career opportunity information over their smartphone; • 84 percent of job seekers think job organizations should have mobile-friendly sites; and • 86 percent of job seekers who have a smartphone say they would use it to search for jobs.
Nearly 60 percent of HR recruiters, directors, and managers report they consider social media the next big wave in reaching more qualified candidates. Companies without a solid mobile presence that incorporates social media are set to fall behind. HR managers and recruiters are adapting to the ways younger generations express themselves and their professional aspirations: • 86 percent of recruiters are likely to look at social media profiles; • 90 percent of job seekers think HR managers will look at their social profiles before offering an interview/job offer; and • 60 percent of job seekers use social media as a part of their job search.
Another element that makes mobile optimization important for However, social media is not necessarily replacing recruiting -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ businesses is the rise of social media as a networking tool. Many mobile recruiting apps and websites provide a seamless way for job seekers to connect with employers and industry professionals on sites such as LinkedIn, Facebook, or Twitter.
technologies—it is simply helping candidates leverage their networks. Smartphones allow employers to not only attract more job seekers, but to enable employers to reach job seekers who are
Technology as a Recruiting Tool
ers, the mobile boom allows for d times and a new way of candidates and satisfying their ple apply to a job, they end up to hear back for the next step. age mobile would be to respond th an SMS message, confirming tion has been received. A mobile device that individuals have
bled Sites
to focus on creating easy-‐to-‐use, websites and career pages to on-‐the-‐go, time-‐strapped eekers are eagerly embracing
b seekers want to receive career nity information on their one9
b seekers think job ions should have mobile-‐friendly sites9
b seekers who have a smartphone say they would use it to search for jobs10 JANUARY/FEBRUARY 2013
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Talent Tech
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐
lends itself to the “always-‐connected generation,” and epitomiz that Byw2018, ant to that reel top candidates – and ffectively particularly mobile andcompanies tech-savvy, such as Milllenials. wantin to reel in top candidates—and effectively blure the line Millennials will make up 50 percent of the workforce. Millennials between the active and passive candidate. are heavy mobile and social media uses, and their candidates. technological Mobile Job Search Challenges expertise will benefit employers because they have grown up with technology and are comfortable using it. This presents an Although mobile job search in recruiting is on the rise, there are still opportunity that businesses can’t ignore—an opportunity to reach gaps in the industry and other issues to be addressed.
Challenges of Mobile Job Search
a younger generation that is already accessing apps and surfing the Web on their mobile devices.
With mobile technology making a company’s information always available at a candidate’s fingertips, it can, make an employer’s job much easier in terms of finding the right workers. In an age of competition, scare jobs, sought-after employers, networked professionals, and changing market dynamics, everyone is keeping an eye out for the next job opportunity, or at least keeping their pipeline warm. This fact lends itself to the always-connected generation, and epitomizes the benefits of mobile use of companies
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“Today, the biggest hurdle mobile job seekers face is the lack of an easy application process,” says James Veriker, president and CEO of Simply Hired. “Only seven percent of employers have a mobile version of their career website, and only three percent have a mobile job app. In addition, only nine percent of websites are optimized for web use.
Although mobile job search in recruiting is on the rise, there are These apps and mobile sites are varied and scattered, making it for job seekers to easily apply to a position while on the issues to be addressed. difficult go. While there are some products looking to solve this issue, these “Today, the b lack of an eas Beriker, Presid seven percent their career w mobile job ap websites are o These apps an making it diffi position while products look Hired’s one-‐cl process need search to live It’s still unclear whether a mobile site, app, or hybrid model is th
HRO TODAY MAGAZINE
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Talent Tech
Mobile Recruiting Tips for Employers gaps in the process need to be addressed in order for mobile job search to live up to its potential.” It’s still unclear whether a mobile site, app, or hybrid model is the best approach for employers—the conclusions are this time are limited, so its difficult for many employers to know where to focus their resources in terms of fully developing their mobile recruiting strategy. There is still room for key players, products, and services to emerge in the mobile recruiting space, but in the meantime employers can fill the gaps with their own recruiting apps and mobile websites.
There are many easy ways for employers to optimize their recruiting strategy and make it accessible for those using mobile devices. • Develop mobile-optimized sites—specifically, the careers and about sections of the websites should be optimized for viewing on mobile devices. • Enable tracking data to determine which devices candidates are using to view your mobile site, as well as their location.
Job seekers are embracing the mobile trend—and they’re using mobile at high rates when it comes to conducting the job search. Seventy-seven percent of job seekers use mobile job search apps, and 86 percent of job seekers report using their mobile devices for job searching in general.
• Encourage candidates to use mobile technology to learn about your company or product. For static information create a mobile site; for videos, actions, or touch capabilities, create an app.
Top top job app downloads by category are entry-level and college grad (24.8 percent); location-based or geographically focused (20.9 percent); finance (8.3 percent); healthcare (6.2 percent); and technology (6 percent).
• Add contact pages to get in touch with recruitment and HR teams.
In recruiting, candidates reported the top reasons they use job search apps: • 36 percent like that they can quickly react to job postings • 24 percent being able to job search anytime, anywhere • 18 percent like that mobile offers a discreet way to search for jobs Of the 86 percent of job seekers who report that they would use their smartphone for job searching, here’s how candidates indicated they would use mobile for landing a position: • 55 percent want to receive alerts • 45 percent want to apply for jobs • 45 percent want to be able to track their application status • 23 percent share the information with friends via email • 32 percent would seek advice and references • 19 percent would share information with others through social networks For employers, mobile enablement is a must for staying ahead of the competition. It’s more efficient, allows for faster decision making, and is cost effective, making it possible to reach more candidates faster, and on a medium they’re already using to seek out information. Encouraging candidates to apply on mobile devices is beneficial for both the company and the candidate. Mobile recruiting allows for faster turnaround time, helping the job seeker to alleviate some of the stress and waiting time involved in hearing back about their application. SMS text notifications provide job seekers immediate access and knowledge about open jobs, and career pages optimized for mobile viewing help candidates to get the information they need in a fast and easy format.
The above was excerpted from the whitepaper 2013 Mobile Recruiting Outlook from SImplyHired.
• Pay attention to cross-platform development—recruiters should be able to reach candidates no matter what mobile device they may be using. This means it is often necessary to code apps and mobile sites in a crossplatform markup language, such as the emerging contender in the space, HTML5. • Allow job seekers to easily share the paces of your careers section with friends via email and social networks. • Have a consistent, timely, well-branded company presence on key social networks, which job seekers are likely to turn to when using mobile devices to access company information. This includes sites such as LinkedIn, Twitter, Facebook, Google+, and blogging sites like Tumblr or Wordpress. • Offer opportunities for job seekers to register with one click to indicate their interest in a position and receive an email with more information on the company, open jobs, and contact information. • All job seekers to receive email or SMS text notifications when new jobs open up. • Allow candidates to upload and edit resumes and cover letters via mobile devices or tablets. • Add mobile pre-screening questions to job postings to weed out the wrong candidates before they even apply. • Provide job seekers with the opportunity to track their application status on their smartphone.
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Talent Acquisition
Global Meets Local Investing in a targeted, regionalized approach for recruiting pays off. By Jill Kuhlman The term glocal has been floating around the business world for a while. It has even made its way into the dictionary. Oxford defines glocal as “reflecting or characterized by both local and global considerations.” Companies across the globe are adapting their products and services to suit local markets. Take, for examples, fast food restaurateur McDonald’s, and retailer Macy’s. McDonald’s offers a standard menu in all its locations, while providing specialty sandwiches in specific locales: Little Chorizo Melt in Britain; Maharaja Mac in India; McItaly burger in Italy; McLobster in Canada; and Ebi Filit-O in Japan. Macy’s department stores have adjusted their sizing, colors, and home products on a store-by-store basis. They modify sweater weights for the appropriate climate zones and sell bigger pots and pans in Utah, where families are larger. McDonald’s and Macy’s are just two manifestations of this new glocal trend in our everyday lives. Now how can we bring that approach to our talent acquisition strategy? Companies and clients want their talent acquisition teams to think globally, but act locally. Organizations want a unified (or global) branding message, but also want the capabilities to adapt that brand, message, product, or service to better serve localized markets. This is a great concept, but how do you create this glocal strategy within your talent acquisition team by making it both effective and measurable? Hiring and developing the strongest regionalized recruiting teams are crucial to every glocal talent acquisition strategy. If your team is entirely in-house, assign specific team members to different regions of the country—or the world—and have them individually own and develop regional expertise. If all or part of your team is outsourced, request recruiters who are specialists in certain regions. Some recruitment process outsourcing (RPO) providers also offer virtual teams. Regionalized recruiters carry the benefit of knowing geographic landscapes intimately and having a deep understanding of market conditions, trends, and labor pools. This also enables them to create extensive and active talent networks. In the age of Web 2.0,
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networking and referrals have become invaluable tools, enabling localized recruiters to be better equipped to maintain and grow candidate pools. Assembling the regionalized dream team is only one piece to the puzzle. Businesses must ensure that talent acquisition teams— internal or outsourced—have a deep knowledge and understanding of an organization’s global messaging. Can they tell you what you do and, more importantly, why you do it? Do they know your audience (both consumers and potential employees)? Do they understand your core values and your corporate DNA? They should, and they need to. As an organization, you need to ensure that your talent acquisition team is branding your organization in a consistent manner. The better they understand your global message, the better equipped they will be to adapt that message on a local level. Recruiters are the “face” of your company and—in many ways—one of your biggest brand ambassadors. Customizing Your Message You are now marching forward: Your team is in place, and they understand your messaging. Arming them with the tools they need to “customize” that message in order to meet the demands of local markets, however, is the challenge still ahead. The best way to do this is to gather marketplace intelligence. Pool information from local resources such as the chamber of commerce, census, search engines, and the department of labor. These are all excellent avenues in which to gather market data, but do not forget to leverage the knowledge of your regionalized team. They are experts in their regions and have on-the-ground knowledge that can simply not be found online. Have them memorialize their insight in a company intranet or CRM tool. Consider spending some of your budget with research companies in order to better understand the competitive landscape. This will no doubt be an investment you won’t regret.
Talent Acquisition
It is imperative to be deliberate when creating localized messages. The more market data you have to thoroughly understand your labor pool and market trends, the better. This will help you accurately create a customized message. The more research done on the back end, the more effective your message will be to your target audience. Based on the market data that is collected, have your talent acquisition team customize your global message. Allowing your team to customize your global message in order to be more relevant for their local market will drive both better and more qualified candidates. Some examples: • Is the organization near a number of large colleges and universities? If so, allow recruiters to focus efforts in university recruitment, creating internship programs and emphasizing their message on training and growth opportunities. • Is it a family-oriented market? If so, highlight work/life benefits, job sharing, or flexible work arrangements. • Does the region have a high volunteer rate? If so, allow your recruiters to adapt your global message to giving back opportunities that your company offers. Social media has made the world a smaller place, and qualified candidates have more options. It is imperative to use social media and technology to your advantage by targeting specific audiences, groups, and locations. FourSquare.com, Google+, and Meetup.com are great examples of social media sites that your talent acquisition team can use to build relationships with potential candidates. Social media is also a great way to drive your glocal message. Twitter, Facebook, and LinkedIn are social media sites that have groups in which your team can drive customized content to their specific markets. Make sure your recruiters are developing and constantly engaging their local talent communities. They should be driving relevant content and creating opportunities for dialogue in order to engage, attract, and ultimately hire the best candidates.
You’ve made it this far, and you have the finish line in sight, but do not ignore the most important element in the creation of a glocal talent acquisition strategy. Track and monitor your results! Is your localized message working? If not, gather more market research, and revamp. Is your social media driving the appropriate traffic? If not, analyze and reassess. How large and active are your recruiters’ talent communities? Are they keeping their talent communities interested and engaged? Your applicant tracking system should have the capabilities to track the various ways, sites, and avenues that candidates use to find and apply on your career site. Analyze this data frequently and make adjustments accordingly. As social media quickly changes and evolves, your strategies will need to reflect those changes and advancements. Knowing where to invest your marketing dollars, specific to location, will increase your output tenfold. Glocal is the new buzzword in talent acquisition and for good reason. When a company’s brand is able to be glocal, more candidates will be interested. When putting together your customized strategy, keep in mind that market research and a properly aligned talent acquisition team will create a strong foundation. Educate your talent acquisition team so that they completely understand your global brand. Make them true brand ambassadors. This knowledge, along with the market research and local insight, will enable them to truly localize your message and attract the best candidates for your roles. At the end of the day, metrics matter. Keep accurate records of activity, talent communities, candidate slates, and candidate quality. You should see an increase in all of them. Bottom line: Measure results. A glocal talent acquisition strategy should enable your team to hire better quality candidates, increase their longevity, decrease their time to fill, and ultimately save your company countless dollars. Trust me, your organization will thank you.
Jill Kuhlman is director of partnership and strategy for WilsonHCG.
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Talent Management Software
Recruitment Deficit
How one debt collection management shop filled its staffing shortfall. By Adam Robinson NorthStar Technologies is in the business of helping companies manage their debt collections. The organization offers a slew of different solutions for companies to collect on past due accounts, loan, card balances, and bad checks. As a primarily people-driven business, they need an in-house team to provide timely service to their clients. NorthStar Technologies’ culture is built on hard work and professional development. However, its talent acquisition process and selection capabilities were not enabling the company to keep pace with its high growth rate. The NorthStar leadership team faced a variety of challenges when it came to its hiring process: • There wasn’t a designated staff member specifically trained to hire employees. • The company lacked a protocol for a structured interview process. • There wasn’t a procedure for pre- and post-interview follow-up, which led to little candidate communication. • Resumes were not organized in one central place. • Turnover was higher than they wanted to be. These roadblocks led to a very time-consuming hiring process. Hours were spent digging through unqualified resumes of candidates in search for a single candidate who showed promise. The management team would also have to dedicate time to writing individual emails to every candidate they were interested in inviting for an interview.Upon completion of the interviewing process, the NorthStar team was still unsure of whom to hire based on their qualifications. They were in need of a solution that would help them select the right person for the job. Elevating the Hiring Process As a collections agency, Northstar was committed to selecting responsible employees for all open positions, so they knew it was time to overhaul their hiring process. They decided to partner with Hireology and implement its selection manager tool for all job families within the organization. The first step was to transform the resume collection process. Prior to Hireology, NorthStar was sorting through resumes that were sent [24]
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to individual email accounts. Hireology revamped the system by providing a hosted career site that would advertise job openings and consolidate candidate resumes. Now, all candidates are housed in one place and accessible by all Northstar users. Northstar was able to lower the cost of their hiring process by making it streamlined and efficient, which freed up valuable time for the organization’s leadership team. Northstar also implemented all of Hireology’s pre-screening tools, including the SmartRank™ survey, which screens for candidates who don’t meet the necessary requirements. In addition, they utilized Hireology’s email templates to decrease the amount of time a user needs to respond to a candidate, and an applicant tracking system to effectively compile resumes for organizational storage. The NorthStar Technologies team also opted to enlist a suite of background and credit checks, to ensure that they would have the right people working for their organization. The results have been very positive. “Hireology’s prescreening process has allowed us to cut our time spent in the hiring process by close to 82 percent,” reports Matt Yeager, vice president of the collections company. “The customizable features make interviewing the right candidates quick and easy. Overall the experience of working with the Hireology website and team has been exceptional.” The tools that are in place have improved the efficiency and organization of the interview and hiring process. This is evident in the conduction and scoring of the interviews as well as the easy accessible verification services. The company has also reported a significant increase in efficiency and success from the use of the prescreening tools. They are able to cut their unqualified applicants by 25 percent based on the results of the Hireology SmartRank™ survey. Yeager says that Hireology’s customizable features have made interviewing for the right candidates quick and easy for Northstar, and it now has complete confidence in its hiring model.
Adam Robinson is CEO of Hireology
RPO
The Beat Goes On From sourcing and screening to vendor management and media planning, the RPO parade keeps marching.
By The Editors Our report on top RPO deals of 2012 was based on research performed by the editorial staff of HRO Today. In some but not all instances, RPO providers themselves provided the information. Data was also obtained from the editors’ market knowledge of bidding processes and their awards. For each listing, we researched the services and the hiring volumes and verified the information through the client or other sources. We have not listed hiring volumes or the division of exempt and non-exempt because of confidentiality agreements. The listings vary from program sizes that involve 500 hires to more than 10,000 hires. Volume is not the only benchmark, however, as we considered the breadth of services and the percentage of the talent pool involved in hard-to-fill categories. The deals are listed in alphabetical order by client.
Client: American Greetings Provider: Pontoon Services provided: Full-service RPO Regions served: U.S.
Client: Avis Budget Group Provider: PeopleScout Services provided: Branding (social media), source, screen, schedule, ATS, offer letter management, background verification, onboarding, new hire care, and exit interviews Regions served: North America and U.K.
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Client: Baker Hughes Provider: AMS Services provided: Full-service RPO including university recruitment Regions served: Europe, Russia Caspian, Middle East, sub-Saharan Africa, and Asia Pacific
Client: BASF Australia & New Zealand; BASF Asia Provider: Hudson Services provided: Full end-to-end recruitment Regions served: Australia & New Zealand; China
Client: BMO Financial Group Provider: Aon Hewitt Services provided: End-to-end recruiting services including technology, sourcing, assessment, screening, interviewing, post offer services, and onboarding support Regions served: North America
Futurestep. Where RPO stands for more. When an organization outsources its recruitment process to us, we take on much more than its recruitment process. You see, our aim is to discover and deliver the talent that has the greatest impact on your business. That means looking beyond traditional RPO. It means providing specialist support in everything from metrics to technology, from developing candidate networks to building an employer brand. And it doesn’t stop there. We’ll also bring you proven industry expertise, an unrivalled global delivery footprint and, through Korn/Ferry, access to some of the most advanced recruitment tools and processes anywhere in the world. If you’re looking for a truly enhanced RPO offering, then watch our short “RPO with impact” film on futurestep.com/solutions/recruitment/rpo.
To learn more, visit futurestep.com To join our exclusive talent management community, register at thefuture500.com/welcome
Talent with impact
RPO
Client: BMW Australia Provider: Hudson Services provided: Talent sourcing and pipelining, employer branding, end-to-end recruitment, and assessment services Regions served: Australia
Client: Chobani Provider: KellyOCG Services provided: Full recruitment process infrastructure implementation to establish a turn-key solution, recruitment and marketing, technology-run reference checks, onsite recruiters and logistic professionals, ATS system, hiring manager toolkit, and program oversight Regions served: Americas
Client: Clear Channel Communications Provider: WilsonHCG Services provided: End-to-end RPO, including process consultation and improvement, employment branding, market research, sourcing and candidate development, pipelining, screening, interview scheduling, offer process management, pre-employment check coordination, reporting and analysis, hiring manager, and candidate satisfaction surveys Regions served: North America
Client: Deloitte Provider: AMS Services provided: Full-service RPO, contingent workforce solutions, executive/talent hiring, and graduate screening Regions served: U.K., Channel Islands and global resourcing projects across China, Australia, Germany, France, U.S., Canada, Netherlands, India, Kenya, South Africa, Malaysia, Russia, Mexico, Brazil, Venezuela, Switzerland, Luxembourg, Vietnam, Japan, and Spain
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Client: Flowserve Provider: Kenexa, an IBM Company Services provided: Recruiting technology, cultural analysis, and employee engagement Regions served: North America, EMEA, Latin America, Asia-Pacific, and India
Client: GE Provider: Futurestep, A Korn/Ferry Company Services provided: Sourcing, screening, applicant tracking, interview scheduling and co-ordination, assessment, and vender management Regions served: Australia and New Zealand
Client: HSBC Provider: AMS Services provided: Full-service RPO, including media management and planning Regions served: EMEA
Client: HSBC Provider: Talent2 Services provided: Sourcing, screening, applicant tracking, interview scheduling, assessment, offer management, background verification, onboarding, and vendor management Regions served: APAC and North America
Client: Irvine Company Provider: PeopleScout Services provided: Source, screen, schedule, offer letter management, background verification, onboarding, new hire care, and exit interviews Regions served: United States
RPO
Client: LexisNexis Provider: AMS Services provided: Full end-to-end recruitment for positions in the U.S., Canada and the U.K. Sourcing and operations support for positions retained by LexisNexis recruiters in the U.S. Regions served: North America and U.K.
Client: Marriott International Provider: AMS Services provided: Full service end-to-end management recruitment and hourly sourcing/screening, and applicant tracking services Regions served: North America
Client: Nike Provider: Pontoon Services provided: Full RPO Regions served: U.S. and APAC
Client: Publicis Provider: Hudson Services provided: Talent sourcing, selection and recruitment, online assessment, and onsite management Regions served: Shanghai, China
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Client: RBS Provider: Talent2 Services provided: Sourcing, screening, applicant tracking, interview scheduling, assessment, offer management, background verification, onboarding, and vendor management Regions served: EMEA
Client: Richemont China Provider: Hudson Services provided: Talent sourcing, selection, and recruitment Regions served: Shanghai, China
Client: Worldpay Provider: Talent2 Services provided: Sourcing, screening, applicant tracking, interview scheduling, assessment, offer management, background verification, onboarding, and vendor management Regions served: EMEA and Asia Pacific
Client: XL Global Provider: Futurestep, A Korn/Ferry Company Services provided: Source, screen, applicant tracking, interview, assessment, offer management, background check, and vender management Regions served: North America, EMEA, and APAC
AD
Contingent Labor
Technology Lending a Hand Take control of your temporary workforce with a VMS. By Debbie Bolla Temporary workers are no longer the redheaded stepchildren of the workforce. They are, perhaps, driving the future of work forward. Consider these statistics. Aberdeen Group’s latest research finds that 26 percent of an average organization’s staff is considered contingent, contract, or temporary. The U.S. Bureau of Labor Statistics reports that temporary workers—nearly 500,000— accounted for 91 percent of total job growth between June 2009 and June 2011. With such great changes in the dynamics of the workforce during the last few years, organizations have been forced to get their ducks in a row for managing temporary workers effectively, and
developing strategies around this business driver. One solution that companies have turned to is a vendor management system (VMS). This technology enables HR executives to gain visibility on the suppliers, spend, and productivity of workers of their contingent labor program. Aberdeen’s new report, VMS Technology and the Next Generation of Contingent Workforce Management, has some influential findings. Organizations are leveraging third-party assistance to take command of their contingent labor management. In fact, 89 percent of best-in-class organizations use a vendor management system (see Figure 1). Chris Dwyer, the author of the report,
Figure 1: Best-in-Class Solution Utilization
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Contingent Labor
notes that organizations “are looking to third parties to drive efficiencies, improve quality, and increase their visibility into contingent labor processes, spending, and suppliers.” So what does a VMS deliver? According to Aberdeen’s research, companies can expect improved onboarding and off-boarding of temporary workers, increased compliance, transparency on spend management, and assistance in future forecasting of need for contingent labor (see Figure 2). Dwyer says, “Automated capabilities can allow users to track the effectiveness of temporary workers, contracts and services. This information can be leveraged in the future when stakeholders are engaging these same services or workers for imminent projects or tasks.”
And many of today’s VMSs go much further than that. “The modern VMS incorporates elements of the social enterprise, recognizing that companies interact with workers and vendors in many different ways,” explains Fieldglass CEO Jai Shekhawat. “A top VMS also has to support the complexities of procuring workers on a global scale, accommodating local laws and languages all over the world. It should be extremely easy to use for lay users, and its complexity is concealed behind a smooth user interface.” Mobile functionality is also becoming part of the VMS lifecycle, notes Edward Jackson, president of Provade. Smartphones and tablets have provided a platform for managers and workers to stay connected 24/7. Provade Mobile delivers an end-to-end VMS for HR
Figure 2: Capabilities enabled by VMS Solutions
Snapshot of the Industry A vendor management solution is an effective way to gain transparency and visibility around contingent labor planning. Here are a few solutions if your organization is considering implementing a program:
Peoplefluent www.peoplefluent.com Pontoon www.pontoonsolutions.com
Fieldglass www.fieldglass.com
PRO Unlimited www.prounlimited.com
IQ Navigator www.iqnavigator.com
Provade www.provade.com
equals
EXCEL
Dominating the race for top talent Striving to excel in next generation talent acquisition
what does www.advantagexpo.com Follow us on:
mean to you?
RPO
Recruitment Process Outsourcing
MSP
Managed Service Programs
SWM
Strategic Workforce Management
BPO
Business Process Outsourcing
Contingent Labor
and procurement managers to be able to create requisitions, review candidates, approve expenses, and access reports on all while on the go. “Mobility has led to significant increases in responsiveness for VMS users, optimizing productivity, and reducing overall cycle times in contingent workforce management,” says Peter Parks, vice president of product management for Provade. “Mobile line-ofbusiness applications promote greater efficiency and performance, and enable workers to stay on top of time-sensitive tasks as they move throughout their workday.”
The Analytics Game Change Analytics are also becoming a game-changer for VMS technology. “Analytics are consistently at the root of the intent to buy, and are becoming the ultimate purchase decision,” reports Holly Erlichman, senior vice president of global strategic services for Pontoon. Dwyer—and his research—agree. “Through automated dashboards and business intelligence capabilities, VMS solutions enable and enhance analytical capabilities for organizations looking to improve intelligence into their contract value,” he says. According to Aberdeen’s report, VMS users are 76 percent more likely than those
Is There VMS Without MSP? Managed services programs (MSP) and vendor management systems (VMS) typically go hand-inhand. Yes, you can have one without the other, but together, they are a powerful source to manage contingent staffing. “Technology is necessary because it automates the process and provides measurement of key performance indicators of service providers,” notes Peoplefluent’s Tisdale. The reach and size of the contingent labor program—especially if global—plays a large role. “A major, global MSP program might have anywhere between 100 and 150 tasks that occur on a quarterly, or even monthly, basis,” notes Fieldglass’s Shekhawat. “That said, almost every MSP would require some sort of technology component in order to manage vendors effectively.” Savvy practitioners are bringing more to the table when establishing a program for temporary labor. “In recent years, we have seen an increased separation of VMS and MSP during the selection process,” said Pontoon’s Erlichman. “The MSP provides experience and expertise in VMS deployment that can be invaluable to establishing a strong program.” Provade’s Jackson notes that these sophisticated buyers are taking more control of their outsourcing engagements. “While we see most MSP contracts having VMS technology in place, the customer often is reserving the right to assign technology to another MSP, should they cancel the contract.” MSP providers partnering or offering their own VMS technology include Staff Management | SMX; Randstad Sourceright; Kelly OCG; Allegis Group Services; Pontoon; Manpower; Guidant Group; Bartech Group; Advantage xPO; Agile 1; Yoh; and ZeroChaos, among others.
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201c2an
YOUR RECOGNIZED LEADER IN OUTSOURCED WORKFORCE MANAGEMENT
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Contingent Labor
who don’t have the technology to be able to configure contingent workforce data for analysis (see Figure 3). “Analytics are the most important,” says Jackson. “To have a world-class program, business intelligence is the engine to program management and business optimization. Additionally, embedded analytics allow for better decision making at the transaction level that can also dramatically drive program savings and effectiveness.” Traditional metrics from a VMS are finance-driven: cost control, cycle time, and compliance. Measurements on any given analytics dashboard are numerous and can provide a pretty complete picture of the contingent labor landscape. Some typical key performance indicators include: • Total department spend • Cost savings achieved through competitive bidding • Actual versus budgeted spend by department • Headcount by department and location • Analysis of contractor costs versus full-time employees
• Contractor time and expense reports • Performance of candidates • Lifecycle of candidates Predictive analytics are now the name of the game. What is being done with that data is the question. “Analytics are now broader than category optimization and are being used to feed intelligence into strategic workforce planning,” says Peoplefluent Senior Vice President Thomas Tisdale. “In other words, analytics don’t just help manage the process but strategically align with business goals.” In fact, according to Aberdeen’s report, VMS users are 67 percent more likely to track ongoing and forecasted trends within their contingent workforce program than non-VMS users. VMS technology allows companies to achieve both organizational and strategic goals. Aberdeen reports that VMS users experience a 70 percent higher increase in total organizational efficiency as a direct result of improving contingent labor program attributes than companies lacking a solution, and 31 percent experienced cost savings on temporary work spend.
Figure 3: VMS as an Analytical Enhancer
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Background Screening
To Screen or Not To Screen? Before running an employee check, decide if it’s a risk mitigator or money waster. By Debbie Bolla How well do you know your employees? It’s a tough question that more and more organizations are grabbling with. One solution that employers are turning to is total workforce screening, which includes both initial and annual backgrounding. According to HireRight’s 2012 Employment Screening Benchmarking Report , 34 percent of respondents perform background checks on current employees, and experts in the field believe the trend is growing. It’s a step toward furthering risk management and maintaining a safe working environment for employees and clients.
appears to be a practice in just over a third of companies, it is most prominent in certain regulated industries such as health care, transportation, and financial services,” notes Diana Acuna, product manager for HireRight. “For example, motor carriers are required to conduct periodic drug and health screenings and motor vehicle records checks, and healthcare organizations are required to regularly conduct sanctions checks on workers who provide patient care.”
“Since a background check is a snapshot in time, employers should be interested in ongoing screening to help identify employees who may commit crimes that would have precluded their initial hire,” notes Steven James, founder and chief operating officer of Background Profiles. “If an employee commits a crime one year after hire, that might pose a problem or threat to the safety of other employees. The employer should have the right to be aware of the change.”
Eric Frehe is in the business of referring and placing registered nurses and healthcare technicians for assignments, and understands the power of ongoing background screening. The chief operating officer for Registry Network works with provider Background Profiles to screen all of its contract employees on an annual basis. “When we started with more travel nursing and bringing nurses out of state, they would come for three months and do an assignment, then come back,” he recalls. “There would be a lapse in employment—it could be six months to a year. That’s when we decided to do annual backgrounds on these individuals.”
Certain industries are more prone to receive the value of investing in annual background screens. “While screening current employees
And the expense has paid off. “We have found somebody that has a bench warrant,” he notes. “It was traffic related and we worked
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Background Screening
esting
Individuals Subject to Drug/Alcohol Tests 89%
90%
Job candidates 66%
Current employees
%
30%
Extended workforce Volunteers and/or unpaid workers
5%
Depends on role, usually safety
3%
Vendors
2%
Employees with issues
2%
Source: 2012 Employment Screening Benchmarking Report , HireRight
with them to get it cleared. We don’t want to preclude hiring them—just help them take care of their problem. It provides peace of mind, proving we are placing the best people possible.” M. Scott Hall, senior vice president and chief operating officer for FirstPoint Information and Background Screening Resources, points out that industries that work with children, such as school systems, also find value in annual screenings. “The employee arrested over the weekend for driving while impaired is the one driving the school bus on Monday morning,” he says. “More often than not, when a work place violence situation occurs, it occurs from the existing employee ranks. How would you know or ever learn of the arrest if you do not monitor your existing employee group?”
Workforce
Drug/Alcohol Teststhinking Typically organizationsPerformed are considering screening that employee
The Negligent Retention Risk Safety and risk mitigation is a consideration—two of the most common drivers of background screening in general. “Companies Urine 67% screen current workers on recommendation from their legal counsel in an effort to create a safe environment, not only for their clients, Breath but also for their employees,” says alcohol Gary Becher, vice president of test (BAT)Screening. sales and marketing of TriCor Employment Avoiding potentially harmful situations from negligent retention Saliva 9% is another benefit of total workforce screening. “Negligent retention is based in part on the premise that employers will do what is reasonably necessary to remain aware of the status
Hair
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HRO TODAY MAGAZINE
and qualifications of their employees,” explains Acuna. “If an employee steals, causes harm to employees, customers, patients, or physical property, and there is evidence that this behavior could have been identified by performing ongoing checks, an employer’s risk could be increased because they ‘should have known.’ Recurring background checks can serve as a solution for mitigating the legal risks associated with negligent retention. It helps reduce a company’s ongoing retention risks by demonstrating reasonable diligence to stay well-informed of employee activity and qualifications throughout the employment lifecycle.”
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Blood
6%
When an employee is considered for a promotion, forward-
for the new role. The position may call for new access to highly sensitive material or information that could cause the company risk if inappropriately used. Or it may require a credential or course credit that needs to be confirmed. “Some companies 95%simply verify the information that made the employee eligible for a promotion is accurate,” says Becher. “For instance, if someone was eligible for a high-level 38% position after they completed a degree or certificate, that information should be verified to make sure the employee is in fact qualified.” The same goes for companies considering an employee transfer. “If a company is transferring an employee to more visible role or to a role of greater potential risk such as working with vulnerable
Background Screening populations, then conducting an up-to-date background screen is good due diligence,” says Hall. Various factors should be taken into consideration if your organization moves forward with annual background screening:
Consent is key. “The same FCRA [Fair Credit Reporting Act] regulations along with applicable state and local laws still apply in a monitoring process of employees as they do in the hiring process of a new employee,” says FirstPoint’s Hall. “First and foremost, the employee must provide their consent for the ongoing monitoring. Employers need to have written policies of what is and is not allowed based on the results of the monitoring process. Then, if a potential issue occurs due to monitoring, the employee must be given the opportunity to address the issue to determine in fact [it is true] and the circumstances behind what was discovered is similar to pre-adverse action in the hiring process.” Keep cost and relevancy in mind. “To keep costs reasonable, a company should determine what information is relevant to the business/position and could put the company at risk,” says HireRight’s Acuna. “For example, if previous employment has been verified, there probably is no reason to check again. However, checking for criminal records would be relevant to most any employer. It also serves as an integrity check. Many employers rely on employees to self-disclose.”
Think about compliance. “We always recommend that you talk to your legal counsel to make sure your background screening program is compliant,” explains TriCor’s Becher. “Your legal team can help you tailor a background screening program that is functional and based on your specific business needs.” Communicate and be consistent. “Clearly communicate that annual background checks will be done on all employees,” says Background Profiles’ James. “Ensure your policies and processes are consistently applied to all employees and do not disproportionately impact minorities or protected classes as per EEOC [Equal Employment Opportunity Commission] guidelines.” Contractors count too. “It’s an industry best practice that recurring screening be conducted on the entire workforce, including the extended workforce, which would include part-time workers, contractors, and vendor and partner employees who have access to an organization’s data, facilities, and personnel. The extended workforce should be screened to the same standards as traditional full-time employees, both before hire and for ongoing screening,” says Acuna. And if every year isn’t in your budget, think about spacing apart total workforce screens. “As a best practice, organizations should conduct background checks on current workers every two years,” she concludes.
Types of Individuals Screened Globally Job candidates
89% 34%
Extended workforce Current employees
22%
Vendors
4%
Volunteers and/or unpaid workers
4%
Source: 2012 Employment Screening Benchmarking Report , HireRight [42]
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¢ The res pro pro Wh bus tale glo cre als law
HRO Today Forum
Nursing a Problem A survey of the largest health profession tells a lot about Obamacare. First of a series, leading to our May 1-2 forum in Philadelphia. By Marcia Faller The 2012 Survey of Registered Nurses: Job Satisfaction, Career Pattern and Trajectories explores current career plans and trends, satisfaction levels, and professional concerns for registered nurses (RNs). In the next one to three years, a considerable number of nurses may pursue employment outside of nursing, shift to parttime roles, retire, or otherwise modify their career paths in some way, according to this report. As the economy continues to recover, issues such as nursing retention and turnover within healthcare facilities will be essential in planning for future nurse staffing.
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Therefore, it is important to know how nurses truly perceive their profession. Their candid feelings, expressed in these survey results, might influence their peers and the next generation of nurses. AMN Healthcare conducted its annual 2012 Survey of Registered Nurses to answer these and related questions. The survey inquiries mirror those asked in the 2011 Survey of Registered Nurses , and include a few new components. Data from previous surveys conducted in 2010 and 2011 are compared to the 2012 data in this report, unveiling some remarkable findings.
HRO Today Forum
The 2012 survey offers a snapshot of current job satisfaction levels among nurses and also indicates how the economic recovery could affect future career trajectories. The data suggest how nurses currently view the quality of nursing care, and whether they believe healthcare reform will help address the predicted nursing shortage. These results are offered as an information resource for healthcare industry leaders, policymakers, academics, staffing professionals, analysts, and others who follow clinical staffing and supply trends.
The following data points provide background describing the current nursing supply and demand situation: • Nursing is the nation’s largest healthcare profession, with more than 3.1 million RNs nationwide. • Of all licensed RNs, 2.6 million or 84.8 percent are employed in nursing. That means about 500,000 licensed nurses don’t work in the nursing field, but potentially could do so.
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HRO Today Forum
The Patient Protection and Affordable Care Act (PPACA) of 2010 is projected to provide 32 million Americans with access to healthcare services. • The nation’s ability to train new nurses to replace retiring nurses is significantly compromised by the limited number of faculty members at nurse training programs. • According to the American Association of Colleges of Nursing (AACN), U.S. nursing schools turned away 58,327 qualified applicants from entry-level baccalaureate nursing programs in 2011 (up from 52,115 in 2010) due to insufficient numbers of faculty, clinical sites, classrooms, clinical preceptors and budget constraints. • Almost two-thirds of the nursing schools cited faculty shortages as a reason for not accepting all qualified applicants. • AACN reported that there was a 5.1 percent enrollment increase in entry-level baccalaureate programs in nursing in 2011, but this increase is not sufficient to meet the projected demand for nursing services. • The Patient Protection and Affordable Care Act (PPACA) of 2010 is projected to provide 32 million Americans with access to healthcare services. • In July 2010, the Tri-Council for Nursing cautioned about declaring an end to the nursing shortage. The economic downturn led to an easing of the shortage in many parts of the country, but the Tri-Council noted that the limitations of the nation’s education system will slow the graduation of RNs. That, coupled with the passage of PPACA, is projected to increase demand for nursing services. • According to the projections released by the Bureau of Labor Statistics (BLS), registered nurses top the list of the 10 occupations with the largest projected job growth in the years between 2002 and 2012. Although RNs have ranked among the top 10 growth occupations in the past, this is the first time in recent history that RNs have ranked first. • The total job openings, which include job growth and the net replacement of nurses, will be more than 1.1 million. This growth, coupled with current trends of nurses retiring or leaving the profession and few new nurses, could lead to a nursing shortage of more than one million nurses by the end of this decade. • Current projections for 2025 indicate a shortage of 260,000 registered nurses according to The Recent Surge in Nurse Employment: Causes and Implications by Dr. Peter Buerhaus, June 2009. A shortage of this magnitude would be twice as large as any nursing shortage experienced in this country since the mid 1960s.
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Key Findings AMN Healthcare’s 2012 Survey of Registered Nurses was conducted following an economic recession and in the midst of an economic upswing, albeit not an aggressive recovery. In addition, the first parts of the PPACA of 2010 were being implemented and more fully understood. The survey reflects how RNs modified career plans due to the recession and how they have begun to respond to the economic recovery. In addition, the survey addresses registered nurses’ perceptions of the impact of healthcare reform on the nursing shortage. • Less than one-fifth (17 percent) of nurses plan to seek a new place of employment as the economy recovers, a decline from the 24 percent who said they would seek a new place of employment in the 2011 survey. • RNs are still more likely to be employed by a hospital where there is permanent employment. However, down by 7 percent (total of 57 percent) from 2011. Thirty-one percent of nurses plan to take steps in the next one to three years that would take them out of nursing altogether (by retiring or seeking non-nursing jobs) or reduce the volume of clinical work they do (by switching to parttime or less demanding roles).
Less than one-fifth (17 percent) of nurses plan to seek a new place of employment as the economy recovers, a decline from the 24 percent who said they would seek a new place of employment in the 2011 survey. • Sixty-six percent report that they will continue as they are, which is a significant rise from 55 percent last year. • A little less than half (40 percent) report they either would not recommend nursing as a career to young people or were not sure that they would. • Ninety-one percent of nurses are satisfied with their careers, up significantly from 2011.
HRO Today Forum
• Yet 44 percent would either hesitate about becoming a nurse or choose another career entirely if they were making such a professional choice today: - 38 percent (age 19-39) in 2012 as opposed to 34 percent in 2011. - 44 percent (age 40-54) in 2012 as opposed to 49 percent in 2011. - 48 percent (age 50+) in 2012 as opposed to 45 percent in 2011. • Four percent plan to work as travel nurses in the next one to three years, compared to 14 percent who said that in 2011. • Forty percent of nurses will pursue further education in nursing in the next 1-3 years. Trends and Observations AMN Healthcare’s 2012 Survey of Registered Nursesis the third annual survey designed to explore how nurses currently feel about their profession and to evaluate their future career plans. Responses to the 2012 survey indicate that roughly nine out of 10 nurses (91 percent) are satisfied with their choice of a career; 27 percent are not satisfied with their particular jobs. Nurses are holding strong overall in their career choice, but consider their current job not a good match for them. That compares to 74 percent who were pleased with their career choice in the previous survey, and 42 percent not satisfied with their particular jobs. Overall, from 2011 to 2012, there has been a significant improvement in both career satisfaction and intent to stay in the current job. Should the economy continue to improve, nearly onethird (29 percent) of nurses said they would alter their career plans, either change employers, work as travel nurses, take steps that would reduce the volume of clinical work they do, or leave patientcare settings altogether. In the 2011 survey, almost half (42 percent) said they would alter their career plans. In addition, 32 percent of nurses suggested that, if they have their way, they will not be in their current job one year from now. That is up slightly from 30 percent in the 2011 survey. The 2012 survey results show a much-improved sense of satisfaction with both career and job, but with a consistent one-third of nurses wanting to move on to something different in the near future. In light of these findings, healthcare facilities should continue their vigilance in the areas of nurse retention and nurse job satisfaction, particularly as the economy begins to improve. AMN Healthcare’s 2012 Survey of Registered Nurses suggests that many RNs today are preparing to make a job move as the economy improves. Seventeen percent surveyed say that will seek a new place of employment as the economy continues to recover. Close to one-third said that during the next one to three years they plan to make a career change by switching to a less demanding nursing
Close to one-third said that during the next one to three years they plan to make a career change by switching to a less demanding nursing position, working as a travel nurse, switching to part-time, retiring, or taking other steps. position, working as a travel nurse, switching to part-time, retiring, or taking other steps. Of significant concern, 5 percent up from 3 percent in 2011, say they are likely to retire now that the economy is beginning to recover. More specifically, 5 percent of nurses permanently employed in a hospital setting indicate they plan to retire in the next one to three years. With the higher levels of dissatisfaction seen in the older age brackets of this survey, this could indicate even larger numbers of defections. Some results indicate certain positive implications such as 66 percent (up from 56 percent) of nurses will continue in their profession for the next 1-3 years. Also, 91 percent are satisfied overall with their choice of nursing as a career. Nevertheless, 32 percent of those nurses—if they have their way—will not be working in their current position a year from now. The following results stand out from the 2012 survey: • Job satisfaction is on the upswing, but still concerning. • A significant number plan to retire or scale back hours. • Many nurses are working due to economic reasons and feel very strongly that healthcare reform does not provide a mechanism that will ensure an adequate supply of qualified nurses. • Nearly half of nurses worry that their current job negatively impacts their health. • One in five nurses plans to change employers. • Almost half of nurses will return to advance their education in nursing. Comparing responses from the 2011 survey to the 2012, continues to point out that nurses have several areas of dissatisfaction, and that healthcare facilities must continue to refine their nurse recruitment and retention strategies as well as consider alternative staffing options in order to meet their patient care objectives.
Marcia Faller, RN, PhD, joined AMN Healthcare in 1989 and currently serves as senior vice president of operations and chief clinical officer.
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The Benefits Package
The Consumer In You
Change the way you treat employees’ relationship to healthcare. The result? Increased satisfaction and decreased costs. By John C. Stoddard Faced with rising healthcare costs, employers are turning to consumer-driven strategies to transform their employees from passive patients to informed and actively involved healthcare consumers. They are doing this to empower employees to make more informed decisions about their care, and to better understand the associated costs. This is worthwhile for employers since empowered employees are more likely to seek and use information, consider different care options, and make choices that meet their preferences. When combined, these behaviors are powerful forces in helping to get more value at a lower cost from the healthcare system, which benefits employees and their employers who together pay for employer-sponsored healthcare. Employers have implemented an array of different tactics as part of an effort to engage employees in their healthcare. These tactics range from implementing consumer-driven health plans with high deductibles designed to connect employees more closely to the healthcare financial marketplace to offering a variety of programs, tools, and information sources designed to engage and activate employees in managing their health and making informed decisions. Other consumerist approaches that employers have adopted include: having nurses call employees at home to educate them about their conditions; using incentives and social gaming to drive participation in wellness programs; and offering health information websites and cost transparency tools to make information more accessible. The reality is that despite these investments, most employers find that the consumer-driven plans they’ve implemented increase complexity and frustration for employees, while the tools and programs they offer are underused. As a result, most employers have fallen well short of achieving their objective of creating informed consumers and lowering healthcare costs. Start Treating Them Like Consumers Benefits leaders can help their organizations avoid these obstacles and achieve their goals by following a very simple, yet profound
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principle: If you want your employees to act like consumers, start treating them like consumers. To achieve this, benefits executives should see their role more as consumer marketers than as plan administrators and mimic the behaviors of great consumer businesses such as Apple or JetBlue. These organizations have transformed their industries by designing products from the consumer backwards, creating great user experiences that simplify unnecessary complexity. Executives who are able to create a great experience around how employees use their health benefits and simplify how they make decisions will be the ones who will reap the benefits healthcare consumerism affords. In order to transform and simplify how employees use healthcare, employers must get a good appreciation for their needs and their current experience. Armed with this information, employers can then apply consumer-centered design principles to offer employees a service that they want, need, and value. In most cases, people do not think about the “product” (their health benefits and the healthcare system) unless a situation arises in which they have to use them. When they do need them, employees find that their benefits are filled with complex terms and provisions. Then they are forced to use them within a healthcare system that is difficult to access and navigate, given how fragmented and unfamiliar it is to most people. Things are made more challenging because healthcare decisions typically need to be made at times when consumers are sick, scared, stressed, anxious, or confused. This complicates their ability think clearly, ask good questions, and effectively weigh options. When employers understand this just-in-time consumer behavior, it will become more obvious why most of the traditional consumerism approaches tried by employers—websites, tools, incentives, targeted outbound calls—have fallen short of expectations. They are unclear, overwhelming, and irrelevant to the specific needs that employees have when they or a family member is sick.
The Benefits Package
Because employees don’t want to make a mistake when they use their benefits, they often turn to their health plan as their initial source of information, which poses two challenges. First, health plans do not provide a good customer experience. The Tempkin Group surveyed 10,000 United States consumers in 2012 and found health plans represented the lowest-rated industry in terms of customer service. Health plans have worked hard to lower costs while meeting minimal thresholds for service as employers have asked them to lower their fees. A key component of this has been moving consumers to self-service via the web. The result is that over time consumers have become more and more frustrated, because getting clear answers to even simple questions has become more challenging and complicated. Second, health plans are not trusted by most consumers. A 2012 Peppers and Rogers Group study found that only two in five people trust their health insurer. Given the role that employers have asked their health plans to play in approving or denying payment for coverage, it will be hard for them to overcome this perception, despite their best intentions to improve service quality, since employees will never see their interests being aligned with insurance companies. Without trust, consumers are difficult to help, as they need to be able to confide what is really going on with their health, and they need to trust the options that they are being given. What Consumers Want What employees really want when a healthcare issue arises is to get the right care for themselves or their families, avoid making mistakes, and save themselves time, money, and hassle. To achieve this, they need information and support that is easy to access, simple to understand, and tailored to their personal situation so that they can make good decisions and overcome the barriers that keep them from acting on good decisions. Above all, this information needs to come from a trusted and credible source. Until just a few years ago, it would have been difficult for employers to come up with different ways of creating great consumer
experiences for their employees and simplify healthcare decision making. Professional health assistants are a newer option. As independent resources, professional health assistants are able to provide the kind of service experience and personalized information that employees need in order to be informed consumers and make informed decisions. They are often supported by a specially trained team of doctors, nurses, pharmacists, psychologists, lifestyle improvement and claims and benefits experts. This team typically has access to the benefits information, claims data, and clinical resources necessary to answer any question or resolve issues for the employee. A number of leading employers have taken this approach of treating their employees as consumers and simplifying their decision making by offering professional health assistants. In addition to lowering costs, employers are finding that employees value the level of service and appreciate their employer for providing this type of support. Benefits of offering professional health assistants include: • Employee engagement. Nearly 60 percent of all employee families and who generate 80 percent of the healthcare spend proactively use the service each year. • Employee satisfaction. Ninety-eight percent of employees are very satisfied with this new benefit and value their employer for providing it to them. • Cost savings. Health benefits costs have been lowered by nearly 10 percent after factoring out plan design changes and other discounts that they’ve negotiated with their health plan. Benefits leaders who are able to redefine their role from managing benefits plans to managing great consumer experiences can empower their employees to become better consumers of healthcare. By providing them with a great service experience, tailored information, and personalized support from a trusted and credible professional health assistant, they will unleash the power of consumerism and stem the tide of growing healthcare costs.
John C. Stoddard is the chief operating officer of Accolade Inc.
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The Benefits Package
How Soon Is Now? It’s not too late to gear up for implementing Obamacare. But it’s getting close. By Karen Frost and Lisa McDougall
Karen Frost
When the President signed the Patient Protection and Affordable Care Act (PPACA) into law in the spring of 2010, the deadline for the full implementation seemed far away. Nearly three years and thousands of pages of regulations later, the most significant provisions of the PPACA take effect on January 1, 2014. For many HR executives, a January 2014 effective date means that they need to have their healthcare strategies, plan designs, and administrative systems ready to comply by fall 2013. It will be here before we know it.
number of covered individuals. The 2013 fee, which is proposed to be $63 annually per covered life (employee, spouse, and dependents), is generally limited to major medical coverage. HR executives will want to be aware of this fee as they set healthcare budgets for the next few years.
The impact on HR executives and employer group health plans include new fees or costs for both the plan and employees, changes in plan design, and additional notification and reporting requirements. Employers need to have a good understanding of many elements as they evaluate, develop, and execute their health plan strategies:
• The additional Medicare tax. Employees will pay additional Medicare tax of 0.9 percent on income over a certain amount, depending on their tax filing status. Employers, however, need only withhold the additional Medicare tax on employees’ income that exceeds $200,000, regardless of filing status (which employers will not know). HR executives should coordinate with their payroll providers to be sure the increased tax is collected and reported. Note that this additional tax is only on the employee portion, and not the employer portion, of Medicare tax.
New Fees and Costs The PPACA contains several provisions that impose fees on group health plans that are intended to improve healthcare delivery or pay for the cost of expanded coverage. These will have a direct cost to employer-sponsored plans starting in mid2013. These fees include:
Changes in Plan Design A number of PPACA provisions that take effect in 2014 have a direct impact on employers’ healthcare plan designs and strategies. HR executives will need to consider how to modify their healthcare plans to comply with these new provisions. A few key ACA provisions will impact plan design:
• The comparative effectiveness fee. This fee is designed to fund comparative clinical effectiveness research. For a plan year ending on or after October 1, 2012 and before October 1, 2013, the fee is $1 times the average number of employees and dependents covered by the plan during the plan year. It increases to $2 for a plan year ending on or after October 1, 2013 and before October 1, 2014. The fee must be paid no later than July 31 of the year following the last day of the plan year. So for employers with calendar year plans, the 2012 fee must be paid no later than July 31, 2013.
• Elimination of preexisting conditions. Preexisting condition exclusions were eliminated for dependents under age 19 for plan years beginning on or after September 23, 2010. Individuals over the age of 19 will generally not be subjected to any preexisting condition exclusions for plan years beginning on or after Jan. 1, 2014.
• The transitional reinsurance program fee. The transitional reinsurance program is intended to minimize adverse selection in the initial years of state exchange operation by funding a reinsurance program in each state, which will run from 2014 to 2016. A fee will be imposed on group health plans based on total
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• The 90-day waiting period. Many employers have plans that • require employees to work a certain amount of time before health coverage is available to them. For plan years beginning on or after January 1, 2014, an employer’s waiting period cannot exceed 90 days. Companies that have waiting periods beyond 90 days will have to make this change to their policy. • Employer mandate. The PPACA provision that could have the most significant impact on group health plan design is the employer
The Benefits Package
Lisa McDougall
mandate, which requires employers with 50 or more full-time employees (FTE) to offer minimum essential health coverage to their employees (and dependent children) or pay a “shared responsibility payment.” The amount of the shared responsibility payment varies. If minimum essential coverage is not offered to employees and/or their dependent children, the penalty is $2,000 per year per fulltime employee (excluding the first 30 full-time employees). So if an employer has 100 full-time employees and does not offer minimum essential coverage, the penalty would be 70 times $2,000 or $140,000 per year. If minimum essential coverage is offered, but considered unaffordable or does not provide minimum value, the penalty is $3,000 per year per full-time employee who enrolls in and receives a premium tax credit from a state exchange. So if the same employer has 100 full-time employees and five receive a premium tax credit when enrolling for coverage in a state exchange, the penalty would be $3,000 times five or $15,000 per year. Guidance was recently issued that provides employers with a safe harbor approach that can be used in determining which employees are considered full-time and, as such, impacted by the employer mandate. Generally, employers may select a measurement period in which they review an employee’s average hours worked. A subsequent stability period follows during which an employer treats the employee (determined to be full-time during the measurement period) as eligible for medical coverage regardless of the employee’s number of hours worked during the stability period. The length of the measurement and stability periods to determine full-time status will be particularly important for HR executives with an hourly or seasonal workforce.
• W-2 reporting. Employers that sponsor a group health plan are required to report the cost of health coverage on employees’ W-2 forms for coverage beginning in 2012. Generally, W-2 reporting is limited to the cost of the medical plan as most other health-related plans are generally excluded (e.g., health savings accounts, health reimbursement arrangements, and most contributions to health spending accounts). For most employers, W-2s must be distributed by January 31 of the following year. If they haven’t already, HR executives need to take immediate action to make sure that the appropriate amount is reported. • Notification about state exchanges. Employers should be aware that their 2013 communication plans must include a notification to employees about the creation and existence of state exchanges. This communication is currently mandated to be provided by March 1, 2013. However, several challenges still exist: 1) additional guidance is needed on the content and format of the notice, and 2) most states that are setting up exchanges are in the midst of implementing the required systems and call center infrastructure, so contact information might not yet be available. HR executives must plan to provide this notice in a timely fashion once additional guidance is provided.
HR executives, if they haven’t already, will need to formulate a strategy for how they determine who is a full-time employee and who is not.
It is likely that 2013 will be a busy year as HR executives get ready to implement the final provisions of the PPACA. While uncertainties in the law still exist and further guidance is expected, employers must focus their short-term efforts on following the healthcare reform-related guidance and making related corrections to their plan. Longer term, however, the changes brought about by the PPACA provide employers an opportunity to take a closer look at their overall healthcare strategies and re-assess the role they want to have moving forward in providing healthcare benefits and influencing the health of their workforces.
Notifications and Reporting The PPACA contains a variety of reporting and notification requirements that begin in early 2013.
Karen Frost is vice president of health solutions and strategies, and Lisa McDougall is health solutions strategist, for Aon Hewitt.
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Institutional Knowledge
Help Polish the Crystal Ball The HRO Today Institute has bold plans for 2013. You can make them bolder. By Elizabeth Boudrie
As we leap into 2013, we’d like to share some of the ongoing, new, and annual research programs we’re working on—or considering—for the new year. We welcome your engagement and input on all of our research, whether you have ideas for new programs, specific questions or concepts you’d like us to address, or you simply want to share your experiences through survey and/or interview participation.
• What are the key impacts of talent scarcity on organizational effectiveness? • What are the most effective ways to achieve global talent acquisition goals? • Which concrete actions really work (and are worth investing time or money in), and which don’t?
We’ve outlined current and planned research programs below, and we invite you to comment on our research, offer new research ideas, participate in our research programs, and get updates throughout the year by visiting us at hrotoday.com/research.
This research program is currently live, and we expect to begin sharing results at our HRO Today Forums in the Philadelphia April 30 to May 2 and in Singapore May 22 and 23.
Research Program: Perspectives on Talent Acquisition and the Changing Global Workforce. Quickly shifting demographics—aging populations, economic insecurity, and population movement, among others—are making talent acquisition an increasingly difficult and troubling endeavor for practitioners responsible for engaging new talent. Because we believe accurate, up-to-date information is the most effective tool you can use to tackle these challenges, we launched the Perspectives on Talent Acquisition and the Changing Global Workforce research program.
Perspectives on Talent Acquisition and the Changing Global Workforce preliminary findings: 77%
of organizations equate market value with quality of talent
74%
of organizations have experienced notable product/service introduction delays as a result of talent scarcity
This research program employs both quantitative and qualitative measures to address key questions in talent acquisition, including: • Where are the current and future shortages most acute (by job type and geographic location)?
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Research Program: Measuring Quality of Hire. Currently in progress, our research program For Good Measure: Measuring Quality of Hire looks at this much-discussed, but still under-appreciated aspect of talent management. According to the folks at research firm Bersin by Deloitte, U.S. employers alone spend more than $124 billion each year on recruiting. But our preliminary research shows at least 40 percent of companies don’t track quality of hire, leaving us to wonder how they know how best to spend their recruiting funds? This global benchmarking survey of quality of hire measurement practices looks at issues such as: • What measures are being used for different job types • Who’s doing the measuring • How the results are being used • Impacts of quality of hire measurement efforts For this program, too, we anticipate sharing early results at our HRO Today Forums in the Philadelphia April 30-May 2 and in Singapore May 22-23.
Research Program: HRprOgression. This ongoing research program, first launched in the second half of 2012, looks at the past, present, and future of HR services. Collecting inputs from both practitioners/buyers and service providers, this program offers a 360-degree view of: • The “health” of HR outsourcing: thriving, surviving, or dying • What’s working in HR outsourcing and what isn’t, and why • Where HR outsourcing is headed • How recent industry trends—M&A activity in particular—are affecting the industry • What practitioners need from providers: the practitioner viewpoint • What providers need to do to stay competitive: the provider viewpoint
Institutional Knowledge
For Good Measure: Measuring Quality of Hire preliminary finding: 40%
percent of organizations do not measure quality of hire
Preliminary results were presented at the HRO Today Forum in Dublin in November 2012, and ongoing results will be presented at future HRO Today events.
This global study will likely engage both qualitative and quantitative approaches.
Research Program: The Blended Workforce. Also still in development, the concept of this study is the targeting of a definition for the “ideal workforce” for a global employer. The goal of this program is to develop an understanding of the interconnected issues of cost, quality and mobility in a globally managed workforce. This study would look to further refine the data by industry, job function, and geography. Specific topics of study could include: • How organizations determine the ideal blend of contingent versus permanent employee in each organization • Balancing quality and cost in the blended workforce • Understanding where strategic value outweighs cost concerns within the workforce This global study will likely engage both qualitative and quantitative approaches.
Research Program: Compensation in the RPO and MSP Industries. Geared toward our provider audience, this is a traditional study of total compensation for various positions within the outsourcing provider community. We expect the first round of this research effort to be complete in the first quarter of 2013, with deidentified, consolidated results shared among study participants.
Research Program: Baker’s Dozens. And, of course, no list of our research would be complete without an overview our annual Baker’s Dozens research and ranking program. HRO Today ’s Baker’s Dozen Customer Satisfaction Ratings, the recognized leader in the HR services industry for many years, are based entirely on user feedback. In fact, in 2012 alone more than 3,500 active HR services buyers participated in our surveys, providing unparalleled insights into their use of and satisfaction with the HR services they purchase.
Research Program: Business Outcomes in Outsourcing. Currently being developed, the plan for this program is to explore the role of business outcomes in the design, purchase, and delivery of an outsourcing engagement. We expect the study to measure the impact of current outsourcing measurements (for example, time/ cost per hire) on an organizations corporate performance. Through this study we will look to illustrate the true business impact of an outsourcing engagement, and understand which items currently measured in an outsourcing program actually support corporate missions and goals.
This year we have seven Baker’s Dozen lists planned: • Talent management technology providers, January/February issue • Relocation providers, March issue • Managed services providers, April issue • Payroll providers, May issue • Recognition services providers, July/August issue • Recruitment process outsourcing providers, September issue • Screening providers, November issue
Potential areas of exploration include: • Key deliverables in your current outsourcing programs • If/how deliverables are tied to specific organizational outcomes, such as sales, retention, safety, etc. • Operational engagement: involvement of the operations team in the development of outsourcing program goals • Reporting: Is reporting ongoing and to what level of detail? • The use of technology in measuring/reporting against goals
We look forward to an exciting year of exploration in the everdynamic world of HR services. Please join us in our journey; visit us at hrotoday.com/research to comment on our research, offer new research ideas, participate in our research programs and get updates throughout the year.
Elizabeth Boudrie is executive director of the HRO Today Institute and vice president of research for SharedXpertise.
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Technically Speaking
A Look Ahead—and Behind Acquisitions, clouds, data, mobility: Your 2013 checklist. By Madeline Laurano
Over the past year, the HR technology market was anything but predictable. With market consolidation, improved analytics, and continued innovation, both traditional providers and startups are looking to differentiate themselves and expand into new territory. Although this dynamic market might bring new opportunities, the majority of buyers are left with big questions and big concerns. Who are the leaders in the market? What should be the key criteria when selecting the right provider? Who will get acquired in 2013?
• Big Data Is Big: Big data is a topic of interest for many organizations considering HR technology. Many data management solutions are available when it comes to HR data, and every organization should carefully weigh their specific needs and budget requirements when selecting one. However, a few providers deserve special consideration, due to their strong correlation with the performance benefits of speed, satisfaction, and scale when it comes to managing big data.
In order to answer these questions, organizations must become smarter and execute better on their HR technology decisions. They must examine the trends of the past year and determine what will dictate the future. Below are a few thoughts organizations might want to consider:
What Can We Expect in 2013? • HR and Finance—Partners. The integration and linkage of financial and HR data has the power to provide organizations with the visibility into, and control over, their financial performance, as well as the talent available to execute on business strategy. Organizations are beginning to make this connection, and providers such as Workday are offering solutions to help integrate financial and HR data more seamlessly.
What Happened in 2012? • M&A Game Change. It would be difficult to discuss 2012 without highlighting some of the most significant acquisitions in the history of HR technology. The most notable included Oracle’s acquisition of Taleo, SAP’s acquisition of SuccessFactors, and IBM’s acquisition of Kenexa. The landscape has shifted significantly, and many smaller providers are reinventing themselves to keep up. Given this level of consolidation, we have yet to see if enterprise resource planning (ERP) will surpass best-of-breed solutions in market share. • Talent Acquisition, Center Stage. The majority of innovation in HR technology can be found in the talent acquisition space, particularly in areas such as social, mobile, and video. As new crops of sourcing, screening, assessment, hiring, and onboarding solutions rapidly enter the market, organizations have multiple options for replacing the resume and job boards. Even leading providers, such as iCIMS, have decided to move away from integrated talent management, and focus primarily on the opportunities in talent acquisition. • Completely Cloudy. The “cloud” has become much more than a buzzword in talent management technology. It is now a key factor in decision making. According to a recent Aberdeen study, 39 percent of “high growth” organizations planned to invest in cloud computing in 2012. This is not surprising, as organizations are looking for stronger integration and better access to data. What is surprising, however, is that these organizations in every industry and every company size are investing in cloud solutions and even looking at their ERPs (thanks to the product leadership of companies such as Workday and acquisitions made by Oracle and SAP). [54]
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• Talent Communities Rising. Organizations have been using talent communities to engage with candidates and build a stronger recruiting strategy during the past year. Yet, the benefits of these communities need to extend beyond talent acquisition and consider the entire employee lifecycle. Brave New Talent is one provider to keep an eye on in this arena. • Mobile Maturing. Mobile has redefined today’s workplace particularly in areas such as talent acquisition, learning, and workforce management. Although organizations are including mobile in their HR technology decisions, other areas of the business seem to be adopting mobile at a greater speed than HR. We are likely to see mobile solutions mature to include a more positive user experience, greater capabilities, and a stronger link to social media. • SMB Market Growing. Human capital management is no longer a privilege of enterprise organizations. Given the shortage of key skills and increased competition for talent, small to midsized companies (SMBs) are rapidly adopting a more strategic process for recruiting, developing, and retaining talent. Solution providers are responding to this demand by moving down market and offering solutions to meet the needs of smaller organizations. Payroll is one example of an industry that is heating up in the SMB market.
Madeline Laurano is Aberdeen Group’s research director for talent acquisition solutions. She can be reached at madeline.laurano@aberdeen.com.
The Employment Report
A Secular Shift A recession—and a recovery—like no other. By Michael Beygelman
The behavior of both the permanent and the temporary employment markets strongly indicates that both have undergone structural change and are not trending within their historical cyclicality. This shift will ultimately impact companies that have ambitious hiring plans, and also HR services providers that might either capitalize on the trend or see their business erode over time. The staffing sector—companies such as Adecco, Kelly, Manpower, Randstad, and such—historically has been countercyclical. But something different seems to be going on this cycle. Since most economists agree that the recession technically ended sometime in the middle of 2009, we are supposedly headed into the fourth year of an economic recovery. In terms of employment, by this juncture, we should be seeing a more pronounced demand shift from temporary workers to permanent employees, because as the economic conditions improve companies have historically tended to start relying more on full-time employees as opposed to temps or contractors. However, even though the permanent employee hiring market has seen upticks in certain industry segments, in general it is not picking up as substantially as expected. Temporary staffing is continuing to perform quite well. The Bureau of Labor Statistics confirms that temporary employment in the United States is growing in the high single digits, even some four years after the end of the recession. If we were to compare this to historical norms, we’d see that in reality the rate of temporary staffing growth should be about half the current rate. This provides evidence that we are witnessing a secular change. Companies have much less appetite to hire permanent employees because of all the uncertainty. Recall that companies got burned during the last economic decline by having to layoff large numbers of permanent employees; it might be safe to say that companies will never go back to hiring permanent employees the same way they did before the most recent economic decline. This secular shift is not merely a U.S. phenomenon. “According to the latest research conducted by Australian Council, nearly 83.1 percent of employers prefer to hire temporary workers for their long-term projects. They also intend to have at least 25 percent of their total work force to be hired on a temporary basis,” states staffing provider Tekniskill. The temp industry is a classic symbol of the unfolding shift in the employment landscape, but some believe that “temping is the quintessential ‘bad’ job.” Erin Hatton, author of The Temp Economy: From Kelly Girls to Permatemps in Postwar America says, “on
average, temps earn lower wages and receive fewer benefits; and they have less job security, fewer chances for upward mobility, and lower morale than those with full-time, year-round employment. What’s more, by increasing the flexibility of the labor supply, the temp industry contributes to downward pressure on wages, decreased employment security, and limited upward mobility for all workers, not just temps.” While Hatton certainly has a biased point of view toward temporary employment, her point about pressure on wages and flexibility cannot be ignored; it is likely at the epicenter of our shift in the employment paradigm. Companies are displaying an insatiable desire for flexibility and scale that cannot be fed by traditional employment. Companies want to pay the absolute lowest possible wage for the absolute maximum amount of work, and as long as people continue to accept these arrangements companies will continue to prefer them. And while an IT contractor arrangement for say $75 per hour might not seem to be so harsh, consider that these arrangements might only last for three to four months. This secular employment shift can also begin to impact HR services providers such as RPOs and payroll processors. RPO firms do not do contingent or temporary staffing because that is what staffing companies do, so RPOs instead focus on options for companies that want to outsource their permanent employee hiring. Payroll processor growth is driven by creation of new businesses that outsource their payroll function and/or companies adding to their internal permanent employee payroll. It is probably safe to say that if companies continue to increase their reliance on temporary labor, that the absolute number of permanent employment openings will decrease over time, thereby creating growth challenges for RPO firms, and the payroll processors will also experience minimal growth because the absolute number of businesses created or permanent employment jobs created is not going to match historic levels. Many analysts are starting to note this shift. Some are trying to help their firms make the right puts and calls on companies that might benefit, while others in the public sector are trying to understand the long-term ramifications. Without question, the HRO space has already been impacted by this shift, as evidenced by the ebbs and flows of HR services providers. What remains to be seen is how this shift will enduringly impact our society.
Michael Beygelman is RPO president at Pontoon. He can be reached at michael.beygelman@pontoonsolutions.com.
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