HR Transformer Blog
HR Outsourcing – the Challenge of Picking Winners
The potential benefits of Human Resource Outsourcing (HRO), have been well documented but not always delivered. These include reducing cost, avoiding HR technology investment, re-aligning HR towards delivering more strategy and improving HR services. (see Top 5 Benefits of HR Outsourcing). Choosing a vendor that matches your requirements and will work with your culture is difficult enough, but it also important to take a view on who the likely ‘winners’ will be in the HRO industry.
HR Outsourcing – Picking WinnersAt the moment, in supporting our clients as they look at their HR Transformation options, we think one of the biggest challenges is that of ‘picking winners’. Whether considering HR Outsourcing for the first time, re-energising an existing contract or simply bringing the whole show back in-house. A wrong decision now could mean you are lumbered with the wrong vendor, solution or the wrong technology platform for the next 7-10 years. This has always been a challenge, yet is more significant now with big changes in the HRO industry. Nothing distracts the vendor’s senior management team more than mergers, acquisitions and a major change in direction.
Lessons have been learnt since the first generation HRO contracts of ten years ago, such as BP/Exult (for an interesting account, see The Great Vendor Bender free login required to HRO Today website) which has renewed its contract with Hewitt, following an ‘about-turn’ of its plans. As David Ulrich, a professor at the University of Michigan’s Ross School of Business reflected, ‘Often the first pancakes or first batch of cookies do not come out well.’
HR Benchmarks – A Government Health Warning
In the UK Civil Service, there is 1 Human Resource professional for every 50 employees. In other sectors with some degree of standardisation, larger organisations should be achieving a ratio way beyond 1 HR professional to 100 employees. The report indicates that HR in the UK Public Sector is about half as efficient as it should be.
The UK Government has presented its strategy for delivering efficiency savings in the Public Sector, Putting the Frontline First – Smarter Government and states that “This plan delivers better public services for lower cost”. The report refers to a range of tactics including strengthening the role of citizens and civic society, accelerating the move to digitalised public services, allowing local authorities to create further commercial opportunities and streamline central government for sharper delivery. The report also highlights the objective of improving back office processes to the standard of the best.
HR Social Networks – UK Trends
Are UK HR professionals the ’social butterflies’ of the online World? Researchers monitored 2000 online conversations in the UK over September and October as part of their research. The conversations included employers, consultancies, and employees discussing HR related topics. The interesting report from CHA, the workplace communications consultancy, was based on research by online specialist Pass It On Media. It found that the tone of conversations was mainly neutral to positive which surprised the researchers who expected more ‘angst’ in the current economic environment. The report is worth a read with innovative research, case-studies from Virgin, E.ON UK and Dell, and some very useful and practical tips for employees and employers alike. Download the PDF “Conversations at your fingertips – How HR professionals score as social networkers”
The findings that stand out for me :-
1. The key venues for conversation are message boards or forums, which account for 54%, followed by social networks such as LinkedIn (23%) and blogs (23%).
Read the rest of this entry »
How to Lead Change by Example – 5 Tips for HR Professionals
This is a summary of an original article published by Strategic HR Review.
In an economic downturn and subsequent recovery, change is inevitable for every organization. Effective Change Management is often a mix of the strategic and the practical. It can encompass everything from ensuring strategies are aligned, to making sure your weekly bulletin goes out on time, on message and to the right people. From a HR perspective, it is important to provide leadership and guidance by example and the following actions can help HR executives to lead the way during the change process. Read the rest of this entry »
Do you need a HR background to be a successful HR Director?
General Motors have appointed Mary Barra as new Head of Human Resources (see article in ‘Workforce’ – General Motors Shakes Up HR Leadership)
Mary does not have a HR background, however has been a top executive with an engineering background. This has raised the question,
“Do you think someone with a ‘non-HR’ background can make a successful HR Director?”
I posed this question to an Institute of Directors discussion on LinkedIn (UK-based members-only group) and within 24 hours had over 20 comments, which brought out a range of strongly-held views on people management and Human Resources.
Some themes, and my commentary from the discussion :-
Can someone with a ‘non-HR’ background be HR Director? Absolutely, they could bring in real experience of the workplace, fresh innovative strategic thinking, strong stakeholder relationships (particularly for internal candidates) and bring in the real thinkers from outside HR.
What about specific HR knowledge on policies, benefits/reward, industrial/employee relations, employment law?
“It’s a positive sign they want to make deep changes in HR and don’t want to draw from the HR community” from the Workforce article.
Naturally this specialist HR knowledge is needed, but it doesn’t all need to be with the HR Director, or in some cases it doesn’t need to be within the organisation. Larger organisations can afford to employ specialist direct reports, and all organisations can go outside the organisation for specialist HR services. The HR Director is still ‘accountable’ for decisions made on employment law, but that doesn’t mean they need to know the latest directives in minute detail.
The context is key. The range of competencies and experience required for a particular HR Director role is varied and will depend on the circumstances. From major transformation to taking over a ‘steady ship’, the skills needed to ‘transform’ an organisation are very different to those needed to ‘manage’ an organisation. (see article HR Transformation Highlights Skills Gaps in HR.)
Who is responsible for ‘People Management’ anyway? Well everyone actually – from the CEOs to managers and employees. HR does have a key role, but it is not their sole responsibility. People solutions come not just from the HR Director, but from a collective team of specialists.
Do organisations need a HR function, if most services can be outsourced? There is a market for HR outsourcing (see article on Top 5 Benefits of HR Outsourcing) which vary in maturity from Payroll and Benefits Administration to end-to-end HR services (for large global players like BP, Unilever etc). If someone else can deliver a particular function ‘better and cheaper’ then why not outsource? My recommendation is not to outsource strategic functions which should be delivered by those ‘close to the heart’ of the organisation. Or better than outsource, why not eliminate unnecessary HR administration or utilise ‘self-service’ software applications where appropriate.
Why are we not having this discussion about Finance and IT, what makes HR different? A great question from @bncarvin on Twitter, and also from the LinkedIn debate. My view is that we are having this debate about HR, simply because in many areas HR is not delivering on ‘talent and people issues’ attracting, retaining and developing employees. In some cases, HR is not responding to the strategic agenda because it is bogged down in important operational work, mergers, restructures etc. In other cases, it is because the transformation skill-set is missing. Many of the Chief Executives current issues are ‘People issues’, for example improving performance of employees, developing the talent pool, fostering innovation. If these are not delivered by HR, then the CEO will look for radical solutions such as bringing in talent from outside HR.
My hope is that HR will develop the transformational skills required to allocate more resources to strategic issues, utilise appropriate HR service providers and benefit from the renaissance in HR software solutions (see article 5 Future Trends in HR operating models). With mounting pressure to deliver, HR has to transform or bringing in HR Directors from ‘outside of HR’ will be more common. However if HR does respond, the current question will change from,
“can people with ‘non-HR’ backgrounds become HR Directors?”
to
“can HR Directors become Chief Executive Officers?” (see for example the article Making the step up from HR to the CEO )
For those in HR who can rise to the challenge, the prizes are high indeed.
Does the shoe have to fit? I would be very interested in your views.
Finally I wish Mary Barra good luck in her new role!
Future Trends in HR Operating Models (Part 2)
This is the second of a two-part discussion on Future Trends in HR Operating Models, click here for Part 1 Future Trends in HR Operating Models (Part 1 with Slides)
(3) HR Outsourcing market will restructure to deliver standardised services
The HR Vendor landscape is evolving all the time (slide 8), we have HR Technology vendors, HR Outsourcing (HRO) providers, single process vendors and HR consultants. HR vendors are also impacted by current economic changes, with cost pressures and streamlining. The market will look very different in two years time with more mergers & acquisitions, see for example Towers Perrin and Watson Wyatt merger. Read the rest of this entry »
HR Survey Highlights Skills Gap in HR
The biggest barrier to transforming Human Resources is the lack of appropriate skills in HR, according to the 2008 Global HR Transformation Report (conducted by HROA in association with ADP). This is the 5th annual survey with 129 executives around the globe in varying stages of HR Transformation. DOWNLOAD 2008 GLOBAL HR TRANSFORMATION REPORT HERE
The survey defines HR Transformation as – “any concerted effort to change and improve HR operations, whether through outsourcing, shared services, internal reengineering, or a combination of these strategies”. Read the rest of this entry »
The ‘Lift and Shift’ comeback in HR Outsourcing – 7 tips to reduce the risks
According to Everest, HR Outsourcing (HRO) buyers are now looking increasingly at the “Lift and Shift” model to provide early cost savings by transferring HR processes to suppliers.
Some points to consider when thinking about “Lift and Shift” for HR outsourcing or offshoring :-
o Strategic vs Non-Strategic processes
o Market competition for services
o Realistic cost and service benefits
o Complexity of the process
o The overall change impact
o Process readiness
3. Do as much process standardisation and policy harmonisation as possible. This will involve extra time in getting your internal customer groups to agree to a standard, common level of service, but will be worth it 6 months after go-live with better service levels and lower costs.
4. Spend adequate time on data cleansing – again this will take more time up front but the payoff will be avoiding the extra ongoing management costs of fixing service issues – which are more expensive when 3rd parties are involved.
5. Expect the length of service stabilisation to be between 3-18 months following ‘go-live’, this will be influenced by many factors including the state of the processes you are transitioning.
6. Think about your longer term HR Operating Model and HR Technology Infrastructure. Have a clear view of what is required from HR in the future – especially in the current environment. Make sure no doors have been closed by outsourcing HR processes.
7. With a lift and shift business case, also develop a more transformational solution alternative in addition to your “as-is” or baseline case. Ask an independent expert (not the HRO vendor) on what the realistic cost and benefits will be.
How to Lead Change by Example – 5 Tips for HR Professionals
This is a summary of an original article published by Strategic HR Review.
In an economic downturn and subsequent recovery, change is inevitable for every organization. Effective Change Management is often a mix of the strategic and the practical. It can encompass everything from ensuring strategies are aligned, to making sure your weekly bulletin goes out on time, on message and to the right people. From a HR perspective, it is important to provide leadership and guidance by example and the following actions can help HR executives to lead the way during the change process.
1. Define and deliver your HR strategy
Make sure that HR strategy is consistent with the overall business strategy, and where necessary provide input and ideas into the overall business strategy. Make sure you achieve buy-in from key stakeholders. This can be achieved by clearly outlining your proposed improvements and delivering on project ideas early on. Part of aligning HR strategy with the overall business strategy will be achieved by sharpening your HR operating model and asking how each HR role will support your organization in the next 12 months. You will be better able to respond quickly to organizational changes with better HR systems, more effective processes and better aligned capabilities in place. This allows HR to deal with the next new change more effectively.
2. Understand HR cost drivers
It is vital to know what drives HR costs. If you know your key performance metrics and what has an effect on them, you can quickly demonstrate that you understand the cost, service and risk implications of any proposed organizational changes on your own department. A good grasp of the cost implications of strategic decisions and the analysis to back it up – really helps when it comes to making changes. By conducting an assessment of the HR department, you get a better understanding of your internal benchmarks. A key metric for HR to understand is the HR “Cost to Serve”of each employee, including staff, systems and third parties. This can vary widely between businesses and geographies and it is important to know why.
3. Take a lead on sourcing options
Take the outsourcing decision to your board – do not let the board take it to you. Be proactive and do the research into how outsourcing could benefit your department (see article Top 5 Benefits of HR Outsourcing)and bring about positive change, as well as cost-savings. Show that you have been actively looking at alternative ways to provide better and more cost-effective HR services in payroll, IT, recruitment, training, HR administration and benefits. Develop your own “build or buy” criteria to help gradually improve HR services. Demonstrate that your business case takes into account the benefits of moving from fixed cost to a more variable cost (that will help in the downturn and the subsequent upturn).
4. Lead by example
There is a balancing act that good HR directors need to master. Often, HR directors are so outwardly focused on supporting the organization that they can neglect the day-to-day workings of their own department. When aligning HR strategy to the wider business strategy, HR directors need to focus on the internal working of the HR department, and most importantly, the people within the HR department. Show leadership through developing your talented team members, and use this as your core team to lead change. Retention strategies start at home, so show the board what you are doing to keep and develop your most talented team members. Be innovative. The organization will look to the HR department to lead on this – secondments, project roles and recognizing excellent service are all initiatives that can inspire people within the organization.
5. Implement change decisively and calmly
All executives in the organization must demonstrate leadership by managing change in a calm and decisive way. HR can stop the organization making “knee-jerk” reactions – more than ever, this is the time to make the right decisions for your organization. Implement changes calmly, effectively and consistently.
HR Transformation Survey Highlights Skills Gap in HR
The biggest barrier to transforming Human Resources is the lack of appropriate skills in HR, according to the 2008 Global HR Transformation Report (conducted by HROA in association with ADP). This is the 5th annual survey with 129 executives around the globe in varying stages of HR Transformation. DOWNLOAD 2008 GLOBAL HR TRANSFORMATION REPORT HERE
Top 5 Reasons HR Projects Fail
HR Project failure usually means increased cost to implement, reduced quality of final outcome, time delays and often leaves a huge dent in morale.
The list below are reasons why HR projects fail based on the number of sleepless nights they have caused HR Execs, and the more scientific approach of research and surveys. The good news is that they are all preventable – by following tried and tested methodologies such as Prince 2, brushing up on your Change Management skills and mixing all of this with a huge dose of common sense.
Top 5 Benefits of HR Outsourcing
The HR Outsourcing market has its problems like every other market right now. On the supply side, there are too many providers, with some running ‘loss-making’ HRO contracts over 7-10 years. On the demand side, a larger range of organisations urgently require HR solutions that allow them to provide better and more cost effective HR solutions. The HRO market is still maturing, 2009 will be interesting with large contracts signed and further HR provider consolidation. Why is there increasing demand from organisations to outsource their non-strategic, transactional HR processes? The benefits of HR Outsourcing include:-
Glass Bead Consulting launches new workshops
Glass Bead Consulting announce ‘HR Transformation Workshop’
Institute of Directors, London – March 5th 2009
Glass Bead Consulting have announced an advanced HR Transformation workshop designed to give HR Executives a headstart in transforming the HR function. The one day course will be held at the Institute of Directors, Pall Mall, London.
HROA World Europe Brussels 2008
The HROA World Europe, now in its 5th year, is the largest and most comprehensive HR Transformation conference in Europe. Held in Brussels with sponsorship from the likes of Accenture, and ADP, and attended by HR Transformation buyers, suppliers and consultants/advisors.
The ‘Lift and Shift’ comeback in HR Outsourcing – 7 tips to reduce the risks
According to Everest, HR Outsourcing (HRO) buyers are now looking increasingly at the “Lift and Shift” model to provide early cost savings by transferring HR processes to suppliers.
