The Global Human Resources Outsourcing (GHRO) team thought we’d share this insightful article on HRO developments during the past five years.
HROToday.com recently took a look at “The last five years in HR outsourcing.”
The HR outsourcing market has endured growing pains and enjoyed maturation. Misperception, followed by consolidation and reformulation has led to a new understanding between practitioners and providers.
Oh, and there was the small matter of a financial meltdown and a global recession, fallout from which has not stopped even now. Where does it leave the marketplace? HRO Today asked a trio of thought leaders for their views.
Jill Goldstein, Accenture HR BPO offering lead
The evolution of HR BPO over the past five years has largely come about as a result of market maturity. Those clients and providers that can widen their focus beyond just transactional processing and lower costs to leverage HR BPO to drive business insight and innovation stand to leapfrog the competition.
Companies need partners that can help create competitive advantage by forecasting and fulfilling talent requirements, and aligning talent plans, workforce capabilities and employee performance with business strategy. As the HR BPO market has matured, buyers want industry-specific expertise and deep-process knowledge from their outsourcing partner.
Over the past several years, interest in HR BPO has been particularly strong in consumer goods, retail, and industrial companies as well as the financial services, communications, media and technology sectors.
Providers who possess deep industry and functional knowledge can apply analytics to create insights and drive real business value.
Linda Merritt, NelsonHall research analyst
Today’s HRO is more customer-focused, adaptable, operationally efficient, and offers more choices in pricing and services. The HRO community has successfully adapted to the new business environment and is ready for the future.
Client willingness to use HRO service provider systems and processes with multi-shored back offices (has) increased, as did the acceptance of standardized service offerings.
HRO service providers needed to continue to invest in building efficient global client service delivery networks, introduce new technologies, and add smartphone and multi-device mobile accessibility.
Software-as-a-service (SaaS) with subscriber-based pricing and multi-client platforms is making inroads in HR applications and basic HR administration systems.
HRO has finally arrived for the small and mid-market, and they are buying. Now the advantages of HRO, including self-services, are available to more than the enterprise market, thanks to new lower-cost technology and service platforms.
Phil Fersht, founder and CEO of research analyst firm HfS Research
Outsourcing is entering a new era—one where organizations can no longer afford to ignore its benefits.
As these radical and secular changes to many of our core industries take hold, business leaders simply cannot overlook the competitive advantage outsourcing offers: enabling them to focus on developing competitive advantage.
These secular shifts are threatening the survival of many businesses, but at the same time are opening up major opportunities to build smarter, more globalized and leaner organizations. Business leaders can no longer afford to cling to many of the methods of yesteryear to steer their organizations, and this data points to a more bold, radical approach to embrace the benefits of global sourcing.
However, most smart organizations are no longer evaluating shared services and outsourcing strategies in silos; while these initiatives are singularly successful at providing benefits to that individual function, our research has shown that these initiatives have failed, in many situations, to improve comprehensively the broader corporate strategic objectives of these organizations.
All-in-all, the last five years have seen buyers figuring out where to focus their outsourcing plans to benefit their core businesses.