ADP held its 26^th annual Meeting of the Minds (MOTM) client conference recently, celebrating its 70 years in business. ADP is helping change the way employees work by continuously introducing new and enhanced products and services, and here I focus on three key areas: mobile, how pay is accessed, and recruiting.

ADP Mobile: growth & new developments

ADP has 20 million registered mobile users, with an average growth rate of 500,000 new users per month. Users use the mobile app on average ~10 times per month. There are 413,000 clients globally, with 20m notifications pushed to the mobile app per month, and in Google Pay it has a satisfaction rating of 88% (4.4 out of 5) with 500k 5-star ratings. ADP Mobile is available in 46 countries, in 27 languages.

ADP Mobile usage includes the ability to view and print pay and W2 statements and categorized pay reports, set up direct deposit of checks, view balances, and clock in and out (which is the most widely used feature).

Recently released features include:

• ADP Watch was released in November 2018, and has had 688k app sessions. Notifications can be received on a smart watch, and soon workers will have the ability to punch in and out with their watch
• Siri shortcuts, including ‘show me my pay and benefits’
• Managing notifications by grouping them however you would like
• Mobile federated single sign-on for users to use their own company credentials, so they don’t have to remember new login information
• Employees and manager dashboards to access lists of responsibilities of all the things they need to do. 95k policy approvals were made within 2 weeks of release
• Direct deposit check image capture – the ability to take a picture of your check to make a deposit so you don’t have to go to a bank
• Profile updating, including view/edit business title, preferred name, pay information
• Ability to do group texting to your team
• Wage garnishments and receipt of email notifications, reducing call center calls by 50%
• Viewing benefits, opening enrollment, updating life events, and uploading documents pertaining to your benefits
• Paycard self-enrollment and the ability to transfer money between cards
• Employee scheduling and the ability to swap work shifts via the requestor to the receiver and approval by the manager
• Via ADP DataCloud managers can obtain absence rate information, pin-point where problems are, and act right away by sending an email with a visual depicting data to be discussed.

Future enhancements will include:

• Notification where OT is highest
• Pay on ADP Watch
• Notifications sent to workers forgetting to clock in
• Chat feature, beginning with wage garnishments and benefits
• Learning, including courses you need to take
• Electronic signatures.

In sum, mobile is a game changer as it improves employee satisfaction via ease of use. As evidence, I sat in on several client presentations of ADP products, e.g. Vantage, and three clients specifically stated that adoption of mobile was much easier than deployment of equivalent desktop applications. The clients said that initial adoption was ~70%, 87% and 90% respectively.

New mobile features are released every three weeks by ADP.

Accessing pay

How workers want to get paid is changing, including lower income workers who may require more immediate access to pay. Thus, ADP is offering quicker access and more flexible choices to receive wages.

In May 2018, ADP Launched Wisely Pay following its acquisition of Global Cash Card. Wisely Pay provides individuals with multiple ways to receive, spend and manage money, including fully electronic options such as peer-to-peer transfers, instant pay, and mobile digital wallets by Apple Pay, Samsung Pay, and Android Pay.

In addition to Wisely Pay, employees can receive pay via options including direct deposit, Venmo digital wallet, Amazon, and Walmart money card. Employees can watch a short video to view the different options and benefits of each. Employees can split their choices of how they want to be paid across all options available with any percentage split. Employees can also track spending patterns and receive alerts on how much they spend and save. Employees can also have early access to pay for the current pay period. If they are short on available money to pay a bill, they can click on the amount needed from their current pay period and deposit into their account. Emergency funds can also be set up.

ADP recruiting (RPO)

This will be a big growth area for both standalone RPO clients and multi-process HR clients, as currently ~10% of its newest clients are existing ADP clients and there are thousands of current clients that can be targeted. A couple of immediate areas that will benefit clients are:

• Use of ADP DataCloud, including via mobile, to obtain insights on flight risks to retain talent
• Candidate chat. Since I have been involved in recruiting for ~25 years, candidates consistently complain about the time and difficulty to submit for jobs and then not hearing back on status, with a historic ~70% dissatisfaction rate across all companies/industries. Candidate chat will allow candidates to answer a few basic questions via chat that contain knockout questions; and if the candidate is qualified, they will receive immediate feedback and be able to continue job submission.

As I wrote this blog, I happened to see ADP’s latest TV ad, with a voiceover that says ‘At ADP, we’re designing a better way to work so you can achieve what you’re working for’, which is a neat summary of the ADP approach. Competitors will be sure to follow suit with similar initiatives, but by continuously innovating and improving its products and services, ADP is laying the groundwork for its next 70 years in business.

Now in its tenth year, Neeyamo is hitting its stride as a niche global HR services provider. I recently caught up with the company at its first U.S. analyst and advisor event for an update on its HR service lines.

Strategic focus

Neeyamo aims to ‘address the white spaces in HR technology and services’, including underserved markets and geographies. It positions itself as a specialist long-tail country provider, targeting global organizations which have ~70% of their employee base across five countries, with the remaining 30% distributed in small numbers across multiple locations. In these multiple locations, clients typically have numerous payroll technologies, including legacy technology, often with payroll distributed across several platforms – resulting in poor overall data management, limited helpdesk and language support, and high fixed cost. Neeyamo’s goal is to be able to provide a single-point HR solution for all tail-country needs.

Starting with 50 employees and 30 clients in 2009, today Neeyamo has:

• 1.6k employees globally, serving ~250 customers
• 6 global delivery centers (California, Mexico and three in India) and 17 proximity delivery centers
• 4 lines of businesses: global payroll, multi-process HRO, pre-employment and other screening services, and cloud transformation services.

Global payroll

Neeyamo has~75 global payroll customers in 153 countries, and processes 7 million payslips per year, served by 500 payroll specialists. Its technology, PayNComp, is currently configured in ~30 countries. Neeyamo plans to bring this to ~70 countries within the next three years to handle most tail countries, and will use in-country partners elsewhere.

Neeyamo’s roadmap for PayNComp is focused on delivering real-time payroll results, and is currently capable of processing ~10k employees (gross to net) in ~90 seconds. Neeyamo is striving for three primary experiences from PayNComp:

• Executive experience: A single view of global payroll at a glance with the ability to view all relevant payroll reports for every country and business unit per pay period
• Payroll team experience: Country/BU level view of payroll, a maker/checker process to ensure validation at every level. Includes input validation to catch errors early, variance analysis, dashboards, and a compliance view
• Employee experience: Easy view/interface of payslips, tax documents and other payroll related information, supported in multiple languages.

Helpdesk

Though not a separate line of business, Helpdesk support is a strong area of focus for Neeyamo. Out of its 250 customers, 100 clients utilize helpdesk, supported in 25 languages and used by all payroll clients.

Helpdesk support and ticket creation is built into the process, so users don’t have to log out and log in to a separate system. Users also have the option to take a screen shot to attach to a ticket, add a category. Users can see the most common questions and answers, and can access the helpdesk via phone, email or chat. The following is a breakdown of how inquiries are handled, with two-thirds of inquiries answered via self-service (ESS, MSS), and only 5% requiring specialist support:

• Tier 0: 66% (ESS, MSS)
• Tier 1: 28% (HR Helpdesk)
• Tier 2: 5% (Specialist Helpdesk)
• Tier 3: 1% (Escalated Support).

Global multi-process HRO (MPHRO)

Neeyamo provides MPHRO in 100 countries for ~150k employees and ~24 processes, supported in 25 languages.

One of Neeyamo’s global clients spoke about MPHRO support including payroll, absence management, and leave management. The client runs a ‘topic of the week’ with the Neeyamo Service Center to provide continuous education, therefore minimizing the number of helpdesk calls. The client chose to leave the U.S. running on Workday payroll, with Neeyamo taking over payroll processing in another ~20 countries, serving ~4,200 employees. Implementation of Neeyamo replaced 8-10 other vendors.  

Other recent Neeyamo MPHRO contracts include a global CPG company headquartered in the U.K. with delivery in ~60 countries across six continents.

Global screening services

Neeyamo provides screening services in 190 countries, for 200 customers, providing 21 different kinds of checks (e.g. employment, background, criminal, education, reference, address, identity, drug testing), verifying 5 million elements. Of its clients, 125 U.S.-based companies use Neeyamo for all international checks. Neeyamo claims that they are the largest international verification company, and with a performance level of 80% of all checks achieved within five days.

Summary

In just 10 years, Neeyamo has scaled its geographic presence and its services and technology capability. Earlier this year, Neeyamo partnered with a French-based provider of HR and finance enterprise software, Talentia, to strengthen its global presence. Talentia supports clients directly in France, the U.K., Spain, Portugal, Greece, Italy, Switzerland, Germany, and Canada. Expect to see even more in 2018 and beyond as Neeyamo is opening offices in Argentina, Brazil, Costa Rica, China, Germany, Poland, South Korea, and Taiwan.

Neeyamo also covered its cloud transformation services, which my colleague Pete Tiliakos will cover in a separate blog, coming shortly.

In NelsonHall’s recently published Payroll Services market analysis report, the payroll outsourcing market is forecast to grow from $17.4 bn in 2016 to $21.8 bn by 2020. Growth is across all regions, with the greatest growth coming from multi-country payroll contracts. The multi-country payroll market is growing at three times the rate of the overall market and represents ~15% of total standalone payroll services revenues.

Analysis of multi-country payroll contracts also finds that:

• Global contracts consisting of more than two regions represent 15% of multi-country contract revenues
• Multi-region contracts consisting of two regions represent 50% of multi-country contract revenues
• Multi-country contracts consisting of more than one country within a region represent 35% of multi-country contract revenues.

Multi-country growth is primarily driven by:

• Process efficiency to support increased productivity
• Demand for consolidation of payroll suppliers
• Greater visibility of the global workforce and associated analytics
• Increased control over compliance and risk associated with payroll processing
• Demand for a more comprehensive global technology solution.

Approximately 75% of vendors included in NelsonHall’s market analysis are currently providing multi-country payroll, and continue to invest in this space. The average number of countries serviced is 14, and the average number of client employees being serviced is 7,000. Contracts signed in 2015/16 for multi-country payroll services included organizations with as few as 100 employees and as many as 50k client employees.

What can we expect in the future? NelsonHall predicts that multi-country payroll will grow at four times the rate of single country services to 2020, with a 23% share of the overall market, as the size and scope of contracts will continue to grow. Key trends include:

• Multi-country payroll will more often be combined with HCM. For example, in December 2016 and January 2017, Ramco announced several contracts for its global payroll, including HCM and global payroll contracts by Western International Group, Horizon Hospitality Holdings, LBC Express, Inc. based in the Philippines and Panasonic Group
• Vendors will continue to invest heavily in their integration capabilities and middleware products, with the aim of providing a seamless approach to payroll across multiple geographies and technologies, to enhance speed and delivery of services
• Tail country specialists, such as Neeyamo is today, are likely to emerge in the payroll space to service large global organizations with small and disparate employee populations in several countries and regions
• Vendors will look to broaden both their in-house and payroll partnership network, to continue to increase in-country payroll service delivery capabilities to support the growing requirement for multi-country and multi-language payroll offerings. For example, in December 2016, SD Worx partnered with Ascender to expand its payroll services geographical reach into Asia Pacific and the Middle East. Prior to this, SD Worx boosted its European footprint by acquiring Ceridian U.K., Ceridian Ireland, CTB A&A, and Fidelis HR in Germany, as well as a strategic partnership with Ceridian in the US and Canada. 

To find out about NelsonHall’s extensive research plans for HR outsourcing services in 2017, contact Guy Saunders.

Below is a small selection of the results comparing current client satisfaction with future importance.

Further Cost Savings: the biggest challenge for payroll vendors

While client satisfaction with cost savings is currently only moderately below client expectations, this gap will widen markedly unless payroll service providers can accelerate their ability to drive down cost. Key expectations include cost reduction through consolidation of disparate payroll systems, increased automation of current payroll processes, including the use of RPA tools to support query handling, increased use of technology and self-service, and improved integration of payroll and HR systems, reducing manual effort and duplicate data. Comments from users included:

“For the future of our type of industry, every aspect of the company cost is going to be important

“There is still too much time spent in checking and re-checking what we need done”

“We only got live in April 2016, we are still in stabilization. We are going to be looking at more ways for reductions”

“It is significant as we are constantly reducing the budget”

Improved Reporting: could do better

Similarly, while client satisfaction with reporting is also currently only moderately below client expectations, this gap will again widen markedly unless payroll service providers can enhance their use of analytics in support of reporting. Improved consolidated reporting across the business, to provide business insight and inform strategic decision making, is important here as is the introduction of more predictive and prescriptive analytics. Comments from users included:

“I think that the more user friendly it gets it takes away from detailed reports, it turns it into over-simplified data. I would rather have them more data savvy”

“This is a hot topic just now as we are going through audits”

“It is meeting expectation but it is becoming more important to us”.

Payroll Accuracy & Improved Usability remain areas for focus

Other areas where vendors need to enhance their payroll services include continuing to improve payroll accuracy and usability. As in cost reduction and reporting, the keys to success lie in the introduction of new digital business models incorporating combinations of RPA, analytics, and cognitive technology to introduce improved accuracy, and reduced “customer effort”, alongside improved analysis, and reduced cost.

What does the future hold?

In terms of ability to meet future client needs, areas scoring the highest client satisfaction include:

• Strength of partnership
• Time and attendance
• Vendor service culture.

Areas scoring the lowest in terms of ability to meet their future needs include:

• Ability to be proactive
• Innovation and creativity
• Analytics and reporting.

Clearly, these are opportunities for improvement. Clients are looking for vendors to take the initiative in introducing new ideas, new processes, and new technologies, and not feeling like they are the ones always leading the vendor. Accordingly, it is important for vendors to be proactive and develop new standards and process models based on new thinking and new technologies. RPA, in particular, is starting to become very important to payroll clients as demonstrated by the following RPA-related comments:

“It will drive down the cost and risk”

“Main goal for next three years”

“Very important”

“Some things are still done manually”

In addition, I believe innovation is a joint responsibility, and my suggestion is for the vendor to ensure that thirty minutes is set aside at each governance and operational team meeting to focus on both innovation and continuous process improvement.

For example, in terms of analytics and reporting, the good news is that the single biggest investment area for payroll providers at present is analytics with ~2/3 of vendors making investments in their analytics offerings, including predictive analytics. Vendors need to make sure that clients are fully aware of the new possibilities arising from these new and emerging capabilities.

NelsonHall’s NEAT comparative vendor assessments look in detail at vendors’ ‘ability to deliver immediate benefit’ to their clients, and their ‘ability to meet future client requirements, and assist strategic sourcing managers in assessing vendor capability while cutting the time and cost associated with their sourcing projects.

The payroll NEAT shows how 16 payroll vendors are positioned overall in terms of their ability to deliver payroll services, as well as within four distinct market segments (i.e. areas of focus designed to meet specific payroll requirements): these are Analytics and Reporting Focus, Technology and User Experience Focus, HR Cloud Integration Focus and Multi-Country Focus. The NEAT online tool also enables buy-side organizations to input their own weightings and tailor the payroll dataset to their specific requirements across over 50 individual vendor evaluation criteria. In this way, sourcing managers can configure the NEAT evaluations in accordance with their own priorities and business requirements for service offerings, delivery capability, customer presence, benefits achieved, and other criteria.

NelsonHall’s recently published Payroll Outsourcing market analysis reveals that the Asia Pacific market is forecast to grow at 11% CAAGR to reach $1.2bn by 2020, which is approx. twice the rate of the overall market. Along with Latin America, APAC is the region seeing the highest growth, with increasing demand for outsourcing solutions in relatively immature markets. Growth is also due to demand for multi-country payroll in these regions, together with an increased focus on compliance. It’s therefore no surprise that half of all the vendors included in our market analysis are targeting clients in APAC.

APAC is typically supported from service delivery centers in Manila, India or China. China is becoming increasingly popular as a delivery location, not only for onshore clients but also for nearshore clients based out of Japan.

One of the leading vendors in the region, achieving double-digit growth, is Excelity Global, which has delivery locations in Singapore, India (Bangalore, Gurgaon, Noida, Hyderabad, Pune, Chennai, Mumbai), China (Shanghai, Beijing, Shenzhen) and the Philippines. In addition, China is also used as a nearshore center for all Japanese service delivery.

Growth in APAC is evidenced by a wealth of market activity from Excelity and several other vendors, including:

• Excelity onboarded a number of new countries including Bangladesh, Macau, Cambodia and Pakistan in 2016. Excelity will focus on expanding its presence in Malaysia, Japan and Australia
• Neeyamo provides payroll globally from six  global delivery centers including four delivery centers in India (Chennai, Pune, Gurgaon and Madurai), with an additional presence in Manila and Mexico. Its APAC clients are typically supported through the service centers in India and Manila as well as in-country presence. Neeyamo has also created a niche for itself in long tail country support. Neeyamo’s partner network enables it to support payroll services in ~100 countries
• Ramco began offering managed payroll services to China, Australia and New Zealand in 2015, and will continue to develop its presence in the ANZ market. Following recent wins in the Philippines, Ramco is expected to build a delivery center in the region
• MHR has opened legal entities in Australia to support growth in its international business in 2015/2016
• NGA HR is looking to develop its Australian market share by leveraging its onshore service center in the region
• Infosys is continuing to build its presence in the ANZ and APAC region, where it has recently won new clients
• Ceridian is looking to expand its presence in ANZ
• ADP, the leading provider in the region by revenue, has service centers including in India, Singapore, Philippines, China, and Australia
• TMF Group acquired KCS Group in 2014, a leading business services provider in Asia, significantly increasing its scale across APAC, with growth plans including China, India, and Hong Kong.

Vendors will continue to invest in developing cloud technology solutions to address the growing demand from the APAC market. For example, Excelity’s first cloud services product, Payroll on Demand, was launched in Q2 2016 – and it will be launching a fully unified regional payroll platform and SaaS capability in eight additional APAC countries in 2016, including Australia, New Zealand, Taiwan, and Japan.

With the evolution of its cloud-based payroll offering, Excelity has the chance to make further inroads into organizations needing a payroll solution initially in single country. As its experience and product offering strengthens over time, with localized client wins, Excelity is likely to gain multinational clients seeking a standardized payroll platform across the entire APAC region. Excelity’s certified partner relationship with Workday will help to accelerate its growth, particularly given Workday’s roadmap to increase its own APAC presence. Its cloud payroll offering will appeal to fast-growing companies due to its relatively low cost and quick implementation times.

The company has a history of aggressive growth, including mergers & acquisitions, and wanted to centralize and standardize its payroll services across its new entities being established, all on one platform. Excelity was chosen in 2004 due to its ability to scale and quickly deploy, and its ability to partner, which has remained a key renewal criteria for the client throughout its journey with Excelity.

Contract Scope & Expansion

The contract began with only China in scope in 2004, and Excelity became an approved global vendor. In 2013, Hong Kong was added, as was Taiwan in 2015. In Q3-Q4 2016, Korea will be added. Although there are some countries still providing payroll in-house, the company is exploring more opportunities. In China, Hong Kong, and Taiwan there are ~15,000 employees across ~48 legal entities in scope. Korea will be an additional ~1,000 employees.

Services in scope include:

• Multi-country payroll administration
• Gross to net payroll processing and delivery for all employees
• A hotline service where employees can call Excelity if they have a payroll question (both China and India support payroll administration, with China providing employee call support)
• An employee self-service (ESS) portal where employees in Taiwan and Hong Kong can access pay statements online. This is a future scope expansion opportunity for China. All employees in China, Taiwan, and Hong Kong receive their pay via wire transfer/direct deposit
• Customized reporting for the HR leadership team
• Mandatory benefits regulation research in ~50 cities, plus Hong Kong and Taiwan
• Individual income tax regulation research, calculation and filing in ~40 cities
• Pricing of the contract is based on a fixed fee per employee per month.

Governance, SLAs & Benefits

Governance includes quarterly leadership team reviews and monthly operations meetings which includes review of metrics/SLAs and process improvement opportunities.

Metrics include timeliness and accuracy of pay and tax filing, issue resolution response time, and compliance with local tax laws. To date, SLA targets are being met, including accuracy of 99.9% and timeliness of 99%. Additional benefits obtained include:

• Regulation compliance across ~50 cities
• Standardized reporting system across ~48 legal entities and customized reporting specific to different business unit requests
• Standardization of payroll processes and employee experience.

Lessons Learned & Best Practices

These include:

• Building a successful working partnership. This was important when the company first outsourced to Aon Hewitt and is equally important now with the rebrand to Excelity, which came with new management changes. This requires many regular meetings between the parties, and commitment to achieve working best practices around requirements and priorities
• Effective communications, reviewing contacts and connections, including the escalation process for any service issues
• Focus on continuous process improvement and service excellence. As the company grows, adds new entities, and outsources payroll in additional countries to Excelity, process improvement, including continuous improvement of communications and development of both parties’ teams, is imperative.

Outlook

This Excelity client’s global strategy is to expand payroll outsourcing, so I expect to see additional countries added in 2017 and beyond. As Excelity currently supports ~450 client organizations across 17 countries in Asia Pacific, I expect Excelity to continue to meet the client’s needs by paying particular attention to best practice processes and effective governance.

Excelity Global is one of the leading Asia Pacific providers of payroll and HR outsourcing services, and Everstone, an India and South East Asia private equity and real estate investment company, plans to invest in Excelity Global for further growth in Asia Pacific and globally. Though a new name and brand, Excelity is an established provider with ~600 employees and ~400 clients across 17 countries in Asia Pacific. Formed in 1997 as Hewitt Associates, the company’s development in the region has seen various transformations, including:

• Hewitt forming a JV with India Life, creating India Life Hewitt in 2003
• Hewitt completing the acquisition of India Life in 2004, consolidating payroll processing centers, and starting payroll operations in China
• Further expansion to Singapore (2005-8)
• Aon Hewitt broadening its product portfolio for the APAC market in 2010, adding Workforce Administration as an offering
• Signing its first WFA client in India in 2011, a leading chain of fast food restaurants
• Expanding HRO services in 2012 to add regional payroll as an offering
• Launching the myPay app for accessing payroll on mobile, and being certified as a Workday Global Payroll Cloud partner (2013-14).

Excelity’s service offerings extend beyond payroll administration, also including tax processing, benefits administration (including mandatory, supplemental and flexible benefits), employee data management, learning, performance management, and recruitment.

Excelity targets single-country, regional and global companies. Service delivery locations include Singapore, India (Bangalore, Gurgaon, Noida, Hyderabad, Pune, Chennai, Mumbai), China (Shanghai, Beijing, Shenzhen) and the Philippines. China is also used as a nearshore center for 100% of Japan’s service delivery. Based on NelsonHall analysis, Excelity is one of the largest payroll service providers in Asia Pacific in terms of payroll revenue. Excelity processes over 1 million pay slips per month across the APAC region, with a value of $5bn per annum.

Clients are across several industries, including a multinational pharma company in China for payroll, a local bank in Singapore for payroll administration, a large restaurant chain in India for workforce administration, and a business processing center in the Philippines for automated time tracking and leave system.

Payroll in Asia Pacific is proving to be a very active HRO market. NelsonHall’s 2015 global payroll market analysis study reveals that the multi-country payroll market continues to grow at ~3X the rate of the total market, and the highest growth rates are in Asia Pacific and Latin America.

Meanwhile, HRO M&A activity continues unabated, with four acquisitions in 2016 already. NelsonHall believes this is a trend that will continue, including acquisitions of all sizes of companies, though we expect to see mostly mid-size companies acquiring to expand their geographic footprint and their ability to deliver multi-country, regional and global services. We will also continue to see acquisitions by private equity investors. Another very recent Asia Pacific example is Talent2 agreeing to sell its managed services business to private equity partners 5 Value Capital, rebranding to Ascender, providing payroll and learning services. Both Ascender and Excelity Global are in the top 5 payroll providers in Asia Pacific by revenue.

Excelity’s first Cloud Services product, Payroll on Demand, will be launched in Q2 2016. Excelity will be launching a fully unified regional payroll platform and SaaS capability in eight additional countries in the APAC region in 2016. NelsonHall expects Everstone to invest in Excelity's Hire-to-Retire HCM platform, enhance its service offering, and expand regionally and globally within the next 1 – 2 years. 

As a result, the merchant banking division of Goldman Sachs and funds advised by Park Square Capital will become the primary shareholders, owning 95% of the business. Until the transaction is approved (expected in early Q1 2016), KKR will keep 100% ownership and then retain 5%.

Adel Al-Saleh, NGA HR and Northgate Information Solutions CEO, confirmed that over the past four years, the company has been “on a journey to streamline our portfolio, which included selling the Northgate Managed Services and Northgate Public Services businesses, and building strong foundations to grow NGA Human Resources.”

An area of growth announced in June 2014 is enhanced multi-country payroll capabilities via its Payroll Exchange, which connects cloud-based HRMSs including Workday, SuccessFactors, SAP, euHReka, Oracle, and PeopleSoft with NGA’s managed or comprehensive payroll services – which can be provided in 145 countries. Around fifteen clients supporting ~250,000 employees are being scheduled for deployment with these technologies between H1 2015 and H2 2019, and several more clients are in the pipeline. New client industries now using Payroll Exchange include pharma, transportation, food and beverage, financial services, and consumer services.

NGA HR’s strategic priorities in support of growth include:

• Delivery:
  • Build scale via its seven global delivery centers and ~30 local delivery centers
  • Provide consistency in delivery across all centers, as well as increased automation and quality including usage of Lean Six Sigma and Robotics.​
• Technology platforms & offerings: Process improvement of platforms and service offerings including Payroll Exchange, Service Center Tools, and increased localization

• Strengthening partnerships:
  • Certified Payroll connectors with Workday & SuccessFactors, integrated into Payroll Exchange
  • BPaaS: BPO service wrappers around Workday & SuccessFactors
  • Expand network of local payroll partners for selected geographies.
• Target areas for growth & expansion:
  • Enhance mid-market capabilities and growth in select markets, including the U.S., U.K., Western Europe, Australia and New Zealand
  • Seek growth in new markets.

NelsonHall believes the outlook for growth at NGA HR is very positive, as it has been making the right investments to quickly deploy and integrate HR solutions in the cloud (including HR Cloud Accelerators, announced Q4 2015). Plus, NGA HR has been enhancing its multi-country payroll capabilities via the Payroll Exchange, and is one of only a few companies that can deliver payroll and HR globally, via on-premise and cloud technology service and/or BPO and BPaaS payroll & HR outsourcing focused on workforce administration.

2014 was a busy year for HRO with ~60 partnerships, mergers and acquisitions combined. We now take a look at what to expect in 2015 and beyond for each HRO service line, including service offerings, market developments, and growth.

MPHRO driven by continued shift to cloud-based platforms

• The Multi-Process HRO (MPHRO) market will grow with a mid-single digit CAAGR through 2018
• In terms of revenue, North America will be the largest region, and LATAM will grow the fastest
• Offerings will continue to be structured around a core model, including payroll and HR administration; benefits and recruitment services will continue to be the most popular add-ons
• Workday use will increase in MPHRO contracts; other cloud-based platforms such as Employee Central will penetrate as well. Momentum among existing MPRHO clients for cloud-based platforms will pick-up significantly by 2017
• Partnership activity will far exceed acquisitions, with partnerships primarily focused on cloud-based platforms and analytics (in 2014 ~3/4 of all HRO contracts were platform-based, of which the majority were cloud-based)
• The proportion of mid-market clients will outnumber large market activity by 2016 (in 2014 the mid-market represented 45% of the market, up from 35% in 2012)
• Demand for end-to-end MPHRO deals will be almost non-existent, as buyers continue to seek specialists for some of their services (e.g. learning) and reduce risk by not having one vendor provide all HRO services.

Benefits Administration exchange offerings will be key

• The benefits administration market will grow at an upper single digit CAAGR through 2018, with the majority of activity coming from the private sector
• The U.S. market will be driven by a need to control costs and be compliant with legislation; the U.K. market will be driven by auto-enrolment legislation
• Within Health & Welfare (H&W) services, private health insurance exchanges, reimbursement account admin, and leave of absence offerings will grow the fastest through 2018
• The main emphasis for vendors will be to develop or enhance exchange offerings (e.g. launching an exchange geared towards the mid-market, adding extended lines of coverage); other efforts will focus on enhancing existing Employer Shared Responsibility offerings
• Technology updates will continue to focus around expanding portals with additional features, and improving the user experience, in an effort to further engage participants
• Multi-country benefits admin activity will take one of two approaches: leveraging existing benefits brokerage and consulting relationships, or focusing exclusively on a technology platform.

Learning key to attraction, development and retention of talent

• The Learning BPO (LBPO) market will grow at mid-high single digit CAAGR through 2018, with Government being the largest sector with growth led by Healthcare
• Selective LBPO contracts will continue to outpace full LBPO, led by content development, including the conversion of instructor-led training (ILT) to e-learning
• Client learning spend will accelerate for job skill training and professional development for purposes of attraction, development and retention of talent
• Vendors will continue to strengthen and integrate their talent management service and technology offerings with learning, both organically and via M&As and partnerships
• Clients will seek the help of LBPO providers to select and implement social learning platforms. Vendors who can help clients monitor and measure their effectiveness will have a competitive advantage
• Vendors will explore adding Corporate Massive Open Online Courses (MOOC) capability as clients seek to further reduce costs and reach a wider net of learners
• E-learning will continue to exceed ILT, though ILT remains important, including for hands-on learning and role-playing, e.g. performance management.

Payroll outsourcing driven by multi-country and platform integration

• The payroll market will show solid mid-single digit global growth. Primary growth is driven by demand for multi-country services and for integrated HCM/payroll cloud integration and/or interfaces
• There will be increasing uptake of employee access to payroll information via mobile, particularly in the U.S. Half of clients globally have self-service, and access pay statements online
• Payroll consolidation will continue to support geographical expansions
• Payroll services will develop by greater focus on technology and automation, including integrating with HR-cloud offerings and using platform-based outsourcing
• Retail, manufacturing, and financial services will continue to be the largest purchasers of payroll services
• Cost and compliance will remain fundamentally important requirements of payroll outsourcing.

RPO and MSP (Contingent Workforce Outsourcing) the fastest growing HRO services

• RPO and MSP are the fastest growing HRO services, expected to continue with mid-teen CAAGR through 2019, in a market driven by increased demand for talent
• Vendor consolidation and partnerships will continue to expand into new geographies to meet demand for global RPO / MSP services
• In the candidate-centric market, services will develop to support greater capability in analytics, improved visibility of labor market supply data, and workforce planning processes to address growing talent shortages. Candidate engagement and a streamlined process will remain a fundamental focus
• Technologies to support mobile marketing and video interviewing will be increasingly popular
• Vendors will continue to invest in onboarding services that go beyond the initial hire to support year 1 retention, and are expected to play a larger role in recommending employee progression and career advice for candidates to support retention
• Contingent workforce management services will grow in Statement of Work (SOW) programs and direct sourcing services to ~28% by 2018
• Requirements for diversity sourcing will be reinvigorated following the new legislation in the U.S. on veteran hiring
• Blended RPO / MSP services will increase in adoption, driven by a focus on developing optimal workforce strategies and bringing greater value to engagements through single governance and reporting and broader analytical insights on the total workforce.

We look forward to an exciting year!

Amy Gurchensky, Liz Rennie, Gary Bragar

Inuit provides business and financial services, including accounting services to small and mid-size U.S. companies. Prior to the acquisition Intuit provided payroll solely to the U.S., and it will now be able to provide payroll to its U.S. clients with international employees.

Acrede’s cloud-based technology processes payroll for employees in 30 countries, including in Europe and Asia. Acrede has offices in Jersey, U.K. and Singapore. All 80 Acrede employees are transferring to Intuit and Acrede’s CEO Karen Paterson will become Intuit's Payroll Platform Director. Prior to Acrede, Karen was the founder of Patersons, now CloudPay, which achieved success with its SaaS-based multi-country platform.

Though Inuit payroll is a sizeable business (for fiscal year 2014 Inuit’s online payroll revenue was $144m, with 345 subscribers and its desktop payroll services $506m with 1,017 customers), payroll BPO has been a small percentage of its payroll business which has historically focused on its core market of small businesses with 1 - 20 employees. However, given the size of Intuit with ~8,500 employees and ~$4.5bn revenue and Acrede’s global capability, larger companies will likely be targeted.

Acrede presents Inuit with significant growth opportunity in its payroll business. Per NelsonHall's Q2 2014 HRO confidence index, 75% of all HRO contracts were platform-based and ~one third of HRO contracts signed were for services in multiple countries, with the highest number being for payroll and RPO service lines.

Per NelsonHall market analysis, demand for multi-country payroll is one of the top drivers to outsource payroll. A key feature of these contracts is clients looking for consistent multi-country payroll processes and a common view of payroll data across geographies, integrated with their wider HR systems to provide common employee and management information. Vendor selection criteria include the provider having an international footprint in the geographies where the client has operations, the ability to scale, and multi-lingual employee support. In addition, clients desire a single contract with one vendor and one set of SLAs.

In terms of revenue, in 2013, multi-country contracts signings represented ~12% of the market. In Q1 2015 NelsonHall will be conducting its fifth global payroll market analysis, which will include the size and growth of the payroll outsourcing market for single-country, multi-country within a single region, multi-region and global (which includes three or more regions).

Per NelsonHall’s 2014 payroll market analysis, half of all vendors are currently providing multi-country payroll, with a few focused solely on multi-country. Providers are continuing to enhance their multi-country capability and with Acrede, Inuit becomes the latest example to have global payroll capability.

The NEAT tool for Payroll Outsourcing is part of NelsonHall’s “speed-to-source” initiative.  The NEAT tool sits at the front-end of the vendor screening process and consists of a two-axis model, assessing vendors against the following:

• Their ability to deliver immediate benefits to clients
• Their ability to meet clients' future requirements.

The vendors are scored against a wide range of criteria, establishing a number of scenarios, each representing a different business situation or client business need. In addition to a comparison of overall vendor capabilities, the tool evaluates their capabilities in a number of payroll client buying behavior market segments including:

• Employee experience improvement
• Multi-geography payroll
• Payroll cost reduction.

To add further value in applying the NelsonHall analysis to their specific business situations and requirements, buy-side organizations can input their own weightings and tailor the payroll outsourcing NEAT tool to their requirements against 37 vendor evaluation criteria. So they might say: "This set of weightings for multi-geography payroll looks about right to me but I want to place more emphasis on application of payroll platform technology and support for new country entry." This enables sourcing managers to use NelsonHall's payroll outsourcing NEAT as an interactive tool via the web and tailor the criteria used to meet their own specific sourcing requirements.

The NEAT analyses are based on a combination of vendor and client interviews. The vendors are scored against a wide range of criteria, establishing a number of scenarios, each with different weightings to represent a different business situation or client business need.

Suppliers of payroll outsourcing services covered by this NelsonHall Vendor Evaluation and Assessment Tool (NEAT) include ADP, Aon Hewitt, Capita, Ceridian, Cloudpay, Genpact, HP, Infosys, MidlandHR, NGA HR, SafeguardWorld International, SD Worx, Sopra HR Solutions, and Talent2.

Talent2’s cloud-based HR SaaS with integrated payroll services offering now represents 25% of the company’s HR/payroll revenues. Its revenues have been growing at ~10 % per annum and NelsonHall expects cloud based HR SaaS with payroll services to represent 30% of Talent2’s HR/payroll revenue by 2015.

Talent2’s HR/payroll platform, PeoplePay, is based on .NET technology and is designed to offer a single HR/payroll platform to meet the various legislative requirements across APAC. This is further supported by in-country personnel that can provide advice on the management of organizations’ HR and payroll functions across 11 APAC countries including: Philippines, Malaysia, Australia, Singapore, New Zealand, Thailand, Dubai, China, Vietnam and Taiwan.

The service includes:

• SaaS-based HR software
• SaaS-based payroll processing, or managed payroll operations based on a SaaS platform
• Service desk for super user queries and to assist organizations in change management.

PeoplePay also incorporates consolidated reporting as well as a user reporting tool, called Diamond.

This example of provision of cloud-based HR SaaS with integrated payroll services is part of a growing trend since it begins to address some of the following issues that can arise if entirely separate HR and payroll SaaS-based services are used:

• Achieving data consistency across HR and payroll platforms
• Achieving consistency of local country compliance and support
• Moving to unit-based pricing across HR and payroll.

Achieving data consistency across HR and payroll platforms

NelsonHall’s Payroll Market Analysis has identified that traditional bureau payrolls are being replaced by SaaS based cloud payrolls as SaaS based payroll products enable data to be more readily entered at source and payrolls can be executed and processed remotely. NelsonHall expects 80% of vendors will be running Cloud based SaaS payrolls within 2 years.

Indeed, SaaS means that organizations no longer need expensive infrastructure to support their HR and payroll, and SaaS is a key mechanism for enabling central controls and ready access to information in distributed organizations. However, SaaS-based payroll is unlikely to be available across all countries in the short-term, and aggregators, local payroll systems and enterprise systems will continue to be key for the medium to long term in support of part of the organization’s payroll requirement.

However there are dangers of lack of data consistency if separate HR and payroll platforms are used. Accordingly 49% of payroll vendors already provide payroll services alongside a HR system and this proportion is likely to grow as organizations look for improved HR/payroll compliance. In particular, data quality can be eroded where required fields in the payroll system (e.g. religion) cannot be configured as required fields in the HR system, giving rise to interface errors. As another simple example, the absence of data validation for localized fields such as post-codes across countries in the HR software can give rise to potential data errors later in the process when the payroll systems validate the data. In a similar way, if field lengths cannot be limited in the HR system, interfacing may lose data as it passes information to the payroll. According, payroll needs to be synchronous with HR.

In addition, it becomes necessary to have an understanding of the business and service sensitivities and the impact on the payroll of HR system changes. Clients using cloud technology may lack the ability to choose when and what changes are applied to HR or payroll processes and to keep these systems synchronized. Accordingly, the inclusion of integrated payroll should reduce the need for interface management as well as improved reporting capability across a consistent set of payroll and HR related data.

Achieving consistency of local country compliance and support

Compliance is always a potential issue in HR and payroll, and it is critical that compliance is achieved across both systems. However separate HR and payroll SaaS systems may lack consistent compliance to local legislation in some countries and due diligence may identify that work-arounds are needed in individual countries to support data privacy, e.g. in July 2014 The Russian parliament has passed a law to require internet companies to store the personal data of Russia users inside the country’s borders. Accordingly, it is important that the SaaS supplier(s) possess local knowledge, preferably in-country, of compliance across both HR and payroll.

At the same time, cloud technologies may offer many languages and roles (e.g. manager, HR administrator and employee). However, the depth of language support may vary from country-to-country and buyers need to check, for example, if the language for all the fields are translated and whether for example the role of HR administrator or manager is supported in all the languages offered. In some instances language capability may just be deployed in support of employee self service. Similarly, organizations that are already live in a particular country with the product might just have a “business English requirement” for employees and not have requested full language capability. So consistent language capability across HR and payroll is again an important consideration.

Moving to unit-based pricing across HR and payroll

Ideally organizations are looking for greater commercial agility using consistent transaction based pricing rather than the subscription based licenses that HR SaaS providers may offer. Again this might be easier to co-ordinate with a single contract for supply of HR SaaS and payroll services.

Overall, a cloud based HR SaaS provider who is also responsible for delivering the payroll can help meet some of these challenges. Where the vendor owns the HR product roadmap as well as the payroll roadmap they may be able to bring a longer term and closer alignment between HR and payroll, potentially resulting in richer reporting, data consistency and improved compliance.

There were ~1,100 HCM professionals at ADP’s Meeting of the Minds last week, most being ADP clients. The conference began with ADP CEO Carlos Rodriguez stating the company's desire to be the market leader in global HCM. To address this goal, ADP is engaged in:

• Providing a suite of cloud based HCM, benefits, talent management and payroll platforms and services, assisting organizations in achieving a more standardized and integrated end-to-end HR platform environment and making it easier to manage international employees. According to the ADP Research Institute, the average global company has 22 HR and payroll systems making unification a top priority of HR leaders
• Focusing on providing an improved and more seamless user experience; a system demo was given of a new user experience covering pre-board, on-board, benefits enrollment, etc.
• Investing in platforms and processes to scale HR BPO
• Leveraging ADP’s global presence to offer organizations HCM, benefits, talent management and payroll wherever they do business.

The following are highlights of some meetings and sessions I attended.

US Comprehensive Outsourcing Services (COS)

• In 2013 ADP added 17 new clients (combination of new ADP clients and ADP single HRO service clients who became COS) with y-o-y growth of 15% from 2013 – 2014. The majority of clients are U.S. headquartered
• Across all of ADP’s ~98 COS clients, average client size is 12k employees, with newest clients averaging 15k employees
• All COS clients use both managed payroll and employee call center, most purchase time, 40% purchase benefits, and 3 clients use RPO services
• ADP's clients are primarily supported onshore though most also have a hybrid model that includes some offshoring of back-office administration from India and Manila. A few clients have chosen to be supported primarily from India
• No client employees are rebadged to ADP to support a newly awarded contract. However, where opportunities are available supporting other COS accounts, ADP will take some employees as requested by the client.

National Accounts Benefits Administration

The following are statistics on Annual Enrollment provided by ADP:

• Concurrent client annual enrollment open windows during the week of 11/8/13: 485
• Total annual enrollment projects over 19 weeks: 946
• Participant call center calls: 368.6k
• Overall enrollments for participants and dependents: 15m
• Enrollments per hour at peak: 3k

In pursuit of offering a more seamless user experience, ADP is focused on real-time integration between Benefits and HR including:

• Providing an improved user experience, with a greater range of tools to support employees
• Integrated cross-application reporting
• Increased compliance effectiveness

RPO

• The RightThing’s client retention is 98% and 2014 revenue growth is in the high teens
• The RightThing is experiencing growth in the financial services sector where ~45% of new hires are millenial's
• Approximately twelve of The RightThing’s clients are provided RPO in two or more geographies, including McGraw Hill, who started as an EMEA client and has expanded its use of RPO into the U.S. and LATAM. In addition, Ricoh, a U.S. client since 2012 has expanded into LATAM and Europe Ricoh’s vacancy rates previously ranged from 5-10% and are now <2%
• Approximately half of The RightThing’s contracts in Q1 14 were new clients to ADP and half were existing ADP clients adding RPO
• In LATAM The RightThing is growing at 100%. Its clients here are primarily U.S. headquartered with hiring needs in LATAM. However The RightThing recently signed its first Brazilian headquartered client to deliver RPO in Buenos Aires. The Buenos Aires office provides onshore services to LATAM clients, including in Portuguese for its new client
• In Europe The RightThing serves clients onsite (including in France and Italy) and onshore from its London office (~20 employees), and from ADP’s office in Prague
• Offshoring services provided from Hyderabad and Pune India are primarily for sourcing 24x7 in support of North America and Asia Pacific
• A few employees are also located in Japan and China.

Recruiting in a Mobile / Digital Age

• The RightThing performs ~200k hires per year and LinkedIn is the number one source of hires. Approximately ~14m people found their last job using social media and ~89% of all candidates use social media to look for a job. Industry-wide the top social sites are LinkedIn, Facebook, Twitter and Google
• It is becoming increasingly important for companies to provide mobile recruiting and for candidates to be able to receive text notification of job openings as well as to apply for jobs: 32% of candidates have applied for a job on a mobile device. With mobile, speed and responsiveness are imperative as ~40% of job seekers have abandoned mobile processes that are too slow
• Millenial's need instant gratification and instant feedback when submitting for a job or they will discount the employer. In addition, employment branding is becoming increasingly important for millenial's who need to be able to understand what it is like to work for a company
• Talent Communities are the “holy grail of recruiting”. Indeed, the top reason (81%) why global companies use social media for recruiting is in support of the development of talent pools.

Some interesting statistics on recruiting from the ADP Research Institute included:

• 73% of job seekers prefer weekly communication
• 58% believe a reasonable time between first interview and job offer is 1 - 2 weeks
• 1.7 is the average number of phone interviews job applicants believe is reasonable number
• 2.2 is the average number of in-person interviews that job applicants believe is reasonable.

Indeed social media is a key focus for the ADP Innovation Lab, which is focusing on using social media to strengthen the onboarding process by:

• Building social capability as part of the onboarding process with the goal of new hires becoming engaged before their first workday. Upon offer letter acceptance new hires can log in, learn about ADP and meet the team they will be working with, including their guide/buddy when they start, and get a jump on completing first day paperwork, etc.
• Enabling new hires to build a profile and import LinkedIn data to get started. Upon entering skills and interests they are pointed to similar people in the organization to enable them to start to integrate with communities of interest.

• Multi-process HR BPO services.
• Payroll Services
• Benefits Administration
• Recruitment Process Outsourcing
• Learning BPO.

The new Managed Services Program (MSP) demonstrates NelsonHall’s commitment to the HR field and in combination with the other HR programs, will provide the most comprehensive HR analysis on the market. Growth in the Recruitment Process Outsourcing is the highest of all the service lines. The scarcity of key talent and the increasingly global nature of employment markets has seen a market develop to even serve director and interim management positions. NelsonHall’s MSP program will evaluate:

• What is the market size and projected growth for the global MSP market by geography?
• What are the top drivers for adoption of MSP?
• What are the benefits currently achieved by users of MSP?
• What factors are inhibiting user adoption of MSP?
• Who are the leading MSP vendors globally and by geography?
• What combination of services is typically provided within MSP contracts and what new services are being added?
• What is the current pattern of delivery location used for MSP services and how is this changing?
• What services are delivered from onshore and which from offshore?
• What are the challenges and success factors within MSP?

The NEAT (NelsonHall Vendor Evaluation and Assessment) tool will be applied to the MSP service line. NEAT is part of NelsonHall’s “speed-to-source” initiative.  It sits at the front-end of the vendor screening process and consists of a two-axis model: assessing vendors against their “ability to deliver immediate benefit” to buy-side organizations and their “ability to meet client future requirements”.

The NEAT analyses themselves are based on a combination of vendor and client interviews. The vendors are scored against a wide range of criteria, establishing a number of scenarios, each with different weightings to represent a different business situation or client business need.

To add further value in speeding up the sourcing process clients are able to input their own weightings and tailor the tool to their requirements. So they might say:  “This set of weightings for this business need looks about right to me but I want to place more emphasis here". With this interactive tool, they can tailor the weightings to meet their own specific sourcing requirements.

If you would like to participate in or join the MSP program, please contact Guy Saunders. 

MPHRO

• We predict the Global MPHRO market will grow at mid-single digits CAAGR through 2017
• The Shared Service Transformation segment will continue to grow mainly as a result of contract expansions and renewals with existing clients, but the Multi-Country Standardization and Core Business Focus segments have the highest growth rate 
• MPHRO offerings will continue to be structured around a core model with recruitment services as the most popular add-on as companies focus on adding back talent; in the near-medium term, demand will increase for learning, performance and compensation administration
• Increased partnership activity, primarily for technology, with acquisitions focused on strengthening existing standalone HRO offerings (typically by vendors with $400m+ in HRO revenues)
• Higher levels of multi-shoring from offshore vendors as clients demand onshore and nearshore support; Philippines and China will grow as preferred offshore locations
• Workday use will increase as MPHRO providers such as Aon Hewitt market this platform as part of its offering
• Proportion of mid-market clients will continue to grow making up the greater share of new contracts and MPHRO pipelines

Benefits

• The global benefits administration market will grow at mid-high single digits CAAGR through 2017
• Demand for DB and DC core services will primarily consist of second generation contracts and beyond; H&W administration as well as additional H&W services, specifically health insurance exchanges and health and wellness services, will grow as a result to control costs and comply with changing legislation
• Vendors will increase headcount and add chat services from onshore centers to enhance delivery strategies
• Multi-country benefits admin activity by MNCs will continue to grow moderately with providers that can leverage existing benefits brokerage and consultant relationships

Learning

• Learning BPO (LBPO) market will grow at mid-high single digit CAAGR through 2017, led by the Government sector
• Selective LBPO contracts continue to outpace full LBPO, led by content development, including the conversion of ILT to e-learning. However, full LBPO continues its resurgence as clients re-invest in learning but do not want to rebuild their internal learning organizations and instead seek greater value by outsourcing a larger share of their learning if not in its entirety
• Client learning spend accelerates for job skill training and professional development for purposes of attraction, development and retention of talent
• Vendors continue to strengthen and integrate their talent management service and technology offerings. SaaS talent management continues to accelerate combined with LBPO and across all HRO service lines
• Clients budget for social learning and seek LBPO vendors for collaborative technology. Within two years, clients will also seek help to monitor and measure the effectiveness of their social learning programs
• ILT continues to remain important but e-learning delivery continues to exceed ILT, including increased usage of VLT for geographically dispersed workforces and m-learning to access content for self-paced e-learning on smartphones and tablets

Payroll

• Solid mid-single digit global growth, led by Latin America and Asia Pacific
• Compliance is increasingly important to reduce risk by ensuring adherence to ever-changing tax laws and regulations, for both domestic and multi-country payroll
• Multi-country payroll continues double-digit growth as MNCs look to standardize and consolidate onto one global platform with one vendor for consistency of process, technology and service for increased efficiency
• Mid-market outsourcing continues high growth due to demand for platform-based payroll
• Pricing is per payslip or per employee per month and is expected to decrease due to pricing pressures from payroll buyers
• Where MPHRO services are provided, payroll will continue to be the initial footprint

RPO

• RPO will continue to be the fastest growing HRO service, with mid-teen CAAGR through 2017
• Vendor consolidation and partnerships continue to expand into new geographies to meet demand for global RPO
• Talent shortages deepen resulting in increased employer branding and talent pool development. Vendors increasingly help their clients with a more robust on-boarding process that includes new hire and employee engagement, employee surveys, and retention strategies. More vendors perform internal hiring of employees for their customers and also play a larger role in recommending progression of employees
• Blended RPO and MSP, including temporary hiring, increases to develop optimal workforce strategies
• For deeper insight, please see NelsonHall’s Targeting RPO market analysis published soon

• Processing of gross to net
• Data entry, both manual and electronic
• Provision of automated or manual calculations
• Checking of input, validation, sensibility checks, investigation and resolution
• Employee payments by BACS, EMTs subject to customer authorization
• Provision of interfaces
• Production and distribution of payslips
• Provision of employee self service
• Employee help desk, etc.

Several key drivers for this outsource were included in NelsonHall's Q2 2013 payroll BPO market analysis:

• Compliance and risk management: remaining fully compliant with current and changing legislation. For example, UK General Insurance stated Real Time Information (RTI) compliance and transitioning has not been an issue as it was automatically included as part of the outsourced service. In sum clients are able to remove the risk of payroll accuracy, timeliness of payments, data security, legislative compliance and system and infrastructure issues
• Strength of the payroll solution, including technology, in this case MidlandHR's iTrent platform. As is common in most payroll outsourcing contracts, UK General Insurance was looking to automate paper-based processes and provide employee self-service, allowing employees online access to their pay statements and associated data. Additional self-service aspects of iTrent modules selected by the client include absence management and holiday requests, travel and expense forms, updating of employee data and access to learning
• Freeing HR resources by saving time on administrative functions, enabling the client to focus on its strategic objectives. In the case of UK General Insurance this means focusing on strategies aligned to organizational business goals, including workforce optimization and employee engagement.

Additional client drivers identified in Nelsonhall's study include:

• A multi-country / global payroll platform managed by a single vendor
• Standardization and centralization of processes and technology, leading to increased efficiency; applicable to single and multi-country payroll and applicable to all clients, including those who have recently gone through an M&A
• Reduction and control of costs.

If you are a buyer or provider of payroll services, what were the primary drivers that led to the decision to outsource in your contract?