This week is the annual migration to New York for the HRO World Conference. For the first time in 3 years, I have chosen to skip the conference and festivities (client work taking priority).
With the increased chatter around HRO as a failed model, it should make for great conversation during and after the conference. What is disappointing to me after 3 years is that HRO has failed to make any significant strides. Providers have lacked dedication and standardization of process and service delivery and buyers have chosen to place all blame on their HR provider instead redesigning or reengineering their own structure. All we tend to hear about are failed contracts (most recently Starbucks and UBS).
From my viewpoint, the market is very quickly destructing itself and what will appear in 3 years will be very different than today. So what need to happen to fix HRO? A couple of thoughts…
1. Stop throwing everything, including the kitchen sink, into a HRO model. It makes no sense to include areas such as talent management into an HRO model when most companies haven’t even put in place a talent management strategy (more than 50% of companies fall in that bucket based on our recent survey). Talent management + HRO continues the recipe for disaster.
2. Get back to basics. HRO needs to get the core right first. That means payroll, benefits and personnel administration. Focus on transactional excellence. Sounds easy but I have yet to seen someone do it right in an HRO model.
3. The market is desperate for a leader to emerge. Leadership creates competition. Hewitt had it for a blink of an eye but what we see today is alot of “me too” with zero innovation or standardization. All of the providers have jumped into the deep end of the pool, forced to dogpaddle to stay afloat. Yet, no one has proven they can actually swim. A defined market leader will force the market to improve dramatically and competition to either step up or step out.
4. HRO needs to regain its favor. HRO has become the internal cancer that no one want to touch. Two years ago, HRO was nice to have on the buyer resume (just like “SAP implementation” was 10 years ago). Due to HRO failures, HR buyers have moved on to focus on talent management. That has (and will) continue to take favor unless HRO providers can, in the ironic words of IBM, “stop talking and start doing!”
I look forward to hearing the buzz at the conference. Please add any thoughts or viewpoints to the comments of this post.