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.

ADP’s CEO Carlos Rodriguez began the company’s annual client conference, Meeting of the Minds, by talking about unprecedented challenges faced, including global talent needs, growing compliance burdens, and rising expectations. And though perhaps not the most original of messages, Rodriguez singled out service as the core differentiator that enables ADP to deliver positive impact on its clients’ business and that differentiates it from software companies. Here I take a look at how ADP’s focus on service as a differentiator cuts across several lines of business.

ADP Comprehensive Outsourcing Services (COS)

COS provides a full range of integrated HR services to clients. Some recent service highlights include:

• With clients using on average ~3 ADP services, an effective governance team process is essential. ADP has taken its operational reviews to the next level, and its value proposition includes 6-month interval reviews to make sure processes are optimized and ROI expectations are met
• Adoption of mobile across all clients has resulted in a reduction of paycheck calls by 14%
• Benefits obtained for a new COS security client included change management workshops and detailed plans to manage organizational change, communication, and people strategy. Plus, process optimization and cost reduction (including pay group consolidation, pay frequency change, go green, and paycard).

ADP DataCloud

Predictive analytics, including Predictive Turnover Probability, are delivering insights including:

• Competitiveness: How much future voluntary turnover might my organization have, relative to others in my industry?
• Hidden Drivers: What combinations of factors are contributing to the likelihood of employees leaving, so I can take action?
• Hotspots: Where are the likely areas of highest voluntary turnover in my organization – within jobs, locations, or teams?
• At-Risk People: Who are the high- and medium-risk employees I need to work to retain?

ADP RPO

Growing from 90 clients in 2015 to 114 today, the majority of new recruitment process outsourcing (RPO) clients are first-time adopters. One of ADP’s competitive advantages is its AIRS Recruiter Training provided internally to ADP staff (who are required to be re-certified every year) and also to clients (for whom 750 classes are held annually, with 10,500 people trained, and 3,600 certified).

2017 investments include:

• Global expansion and capability building in EMEA, APAC and LATAM to support growing U.S. multi-national corporations
• Enhanced RPO analytics and DataCloud Integration, including linking candidate profile data to retention and performance.

Mobile

ADP has 10m+ mobile users, providing capability that includes:

• Accessing and printing pay & W2 statements, access to categorized pay reports, setup of direct deposit, and comparison of pay statements
• Tracking time and timesheet approvals, view, request and approve of time off
• Checking 401k account balances, viewing account performance, and changing contribution rate or account allocation.

Benefits Administration

Providing Benefits Administration for 1 in every 17 employees in the U.S. and 9.4m participants, ADP receives ~850k calls annually to its service center, and first-time call resolution is 90%. Recent client case studies include:

• Upon automating Benefits Administration for its client Areas (including open enrollment), errors were reduced by ~75%, and benefits enrollment was reduced from 2 months to 2 weeks. Client feedback was that this was a smooth experience, the process being intuitive and easy to understand (http://bit.ly/2lB7fBK)
• Sumitomo Electric Wiring Systems turned to ADP for ACA Compliance and automating open enrollment. Feedback from the Corporate Compensation and Benefits Administrator included acknowledgement of ADP’s customer service expertise (http://bit.ly/2hirs9u).

The importance of service

The importance of customer service is hardly a new theme, but it’s worth reflecting on just how much it makes a difference. Consider these statistics:

• Most customers make their decisions on who they will buy from based on service as the most important criterion
• 3 in 5 Americans (59%) would try a new brand or company for a better service experience
• The probability of selling to a new prospect is ~15%. The probability of selling to an existing customer is ~65%
• It is 6.5 times more expensive to acquire a new customer than it is to keep a current one
• 91% of unhappy customers will not willingly do business with you again.

ADP clearly grasps this, and is committed to improved customer service and experience as a core differentiator across its HR business lines.

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

There are a couple of reasons why Payroll and HR/Workforce Administration scored highly:

• Firstly, being highly transactional mature service offerings it is not a surprise that payroll and HR/workforce administration scored well. Important SLA metrics such as accuracy and on-time delivery are > 99% and rarely missed
• Secondly, Payroll and HR Administration are the current core MPHRO service offerings. Aside from the shared service transformation segment (which often includes most of the entire HR service line) the core bundle of HRO services provided as part of MPHRO contracts has retrenched to primarily Payroll and HR Administration.

RPO certainly has many benefits when provided as part of MPHRO contracts. However, the results of this study suggest that RPO within MPHRO has yet to reach the maturity of standalone RPO. Talent is the top HR priority of business leaders today and RPO has become much more than a transactional hiring service. Clients now have high expectations of value-add and expertise from RPO across areas such as talent pool development, employment branding, on-boarding and talent retention. This can be a challenge in MPHRO where the services currently provided are typically highly administrative and/or transactional in nature.

Nonetheless, over the last couple of years we’ve begun to see MPHRO providers begin to rise to the challenge and develop RPO specialist capability either:

• Internally and via partnerships, e.g. Aon Hewitt SourceSprint which keeps applicants in a talent community for possible placement with other opportunities and Aon Hewitt’s digital interviewing capabilities via its partnership with HireVue
• Using M&A activity, e.g. ADP and The RightThing and IBM and Kenexa, to provide RPO specialist capability either as a part of a MPHRO service or as a standalone service.

Therefore I do believe that in subsequent surveys we will see RPO client satisfaction as part of MPHRO services contracts continue to improve.

Elsewhere performance management administration scored 10 points higher than succession planning. The stronger rating for performance management administration is good news for MPHRO providers as performance management is a critical element in talent retention and development, and ensuring that performance management policies are adhered to is a critical hygiene factor for organizations. However, succession planning may be a step too far. Here, there is typically less scope for MPHRO vendors to make a significant impact on the internal mobility decision process, and the lower rating may be indicative of clients needing to be more active and accountable for the succession process.

The MPHRO NEAT tool is available to NelsonHall clients at http://research.nelson-hall.com/service-line-programs/hr-outsourcing/multi-process-hro/ and is also available for a limited period free-of-charge to buy-side HR executives and strategic sourcing managers.

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.

When IBM acquired Kenexa for $1.3bn in December 2012 (with Kenexa integrated into IBM’s Software Group and operationally aligned to IBM GPS), much was written at the time of how this would strengthen IBM's Smarter Workforce strategic initiative by creating an integrated software platform across human capital management, analytics and social technologies. 

Though Kenexa certainly strengthens IBM’s technology offering, as I wrote at the time Kenexa has also strengthened IBM’s talent management services capabilities around consulting, RPO, and advisory services around employee engagement and leadership development.

Per the theme of the conference, in order to have an energized workforce you need to have an engaged workforce, which stems from an organization’s leadership. As evidenced by several client examples, Kenexa has strenghened IBM's ability to improve employee engagement. 

The Kenexa conference featured a session of how Kenexa helped seven clients get smarter about their workforces of which six described improving employee engagement:

• Giant Eagle, leveraged assessments to improve recruiting for ~11-12k hires per year by reducing the workload of reviewing 250k candidate applications per year. Kenexa assessments for cultural fit screened out 30% of the applications.  Results included a 12% decrease in time to fill in the first 6 months, with a 25% decrease after 12 months. There was also a 10 point increase in hiring manager satisfaction
• Pizza Hut wanted to improve the ability of its leaders to engage teams and develop managers. Kenexa helped by:
  • Studying the client’s best leaders to find out what they do every day to get results
  • Identifying key traits that predict candidate success
  • Connecting people with competency models and right positions
  • Building a framework for selection, development and performance and then assessing  and measuring potential
• The Hartford, used Kenexa surveys. Employee engagement results went up 8% in 1 year, with talent development increasing 14% with an 88% response rate
• Monsanto, uses Kenexa organizational survey and engagement survey tools. Kenexa also helped to identify attributes of top leaders and select the right leaders
• Eat’n Park, has used Kenexa to do employee engagement surveys since 2006. Now includes engagement in its incentive plan and has moved the survey to the Fall to coincide with the compensation cycle
• Burlington Stores, uses Kenexa to conduct engagement surveys and Kenexa is in the process of providing recommendations for improvement
• Caterpillar, has used Kenexa for engagement surveys since 2001. Last year implemented its first global engagement survey to include demographic data for its 70k participants, which uncovered previously unknown barriers to engagement. An employee opinion survey was then launched which was a leading indicator of business results and profit.

There were several RPO sessions where clients described their outsourcing journey with Kenexa. Kenexa was a significant boost to IBM’s standalone RPO business. Though IBM has been providing standalone RPO to GM for several years, up until Kenexa, RPO was primarily provided with IBM’s MPHRO services. Kenexa brought in some large global RPO clients including Eli Lilly, Baker Hughes and Ford. Per NelsonHall’s January 2014 RPO market analysis, in terms of revenue, Kenexa, an IBM company, is the largest RPO provider in Latin America and in the top 5 in North America, Asia Pacific and EMEA (excluding the U.K.). For 2014 Kenexa IBM has a strong RPO pipeline including a couple of large global prospects. To enable growth investments are being made including in employer branding.  

General Conference

Havas Worldwide, talked about the implications of workers no longer staying with the same company for life. Lessons include:

• Culture wins, i.e. how you feel at work
• Command and control is obsolete, have to trust people
• Be flexible, one size does not fit all
• Move people around and across the organization, cross pollenate talent
• Don’t be stingy with rewards and recognition, the #1 reason people leave jobs
• Support a healthy work-life balance
• Boost career trajectories, not just on the job training but career development, e.g. send to conferences. Interesting employees become interested employees
• Being the best at one thing is no longer enough
• Hire for passion
• Reward failure (a successful try)
• Build a growth culture
• Stay curious – if think you have it all figured out you are doomed, need to keep employees learning and they will come to you with new ideas, etc.

AMC, which serves 200m guests per year, is in an industry where turnover rates of 200% are common.  A key lesson about recruitment was, to quote Red Auerbach “if you hire the wrong person for the job, all the fancy management techniques in the world won’t help you”. After it deployed a Kenexa screening tool, turnover reduced from 200% within a few years to 90%, with guest satisfaction improving by 25%, which correlated directly to employee productivity and profitability. Kenexa also identified common key talent in the client’s top general managers. Where GMs were in the highly recommended engagement survey rating, unit level cash flows were up 18%, and concession productivity $20 per hour per employee higher than other locations, equating to $300k per location on an annual basis.

Scott Adams, creator of Dilbert offered a few pearls of wisdom, including having complementary skills improves your odds (e.g. he is not the best artist or writer or comedian but has combined complementary skills), and having a positive attitude widens your field of perception.

Summary

During the past year IBM has seen an increase in the number of requests from clients to help improve their culture, including engagement and leadership development. As evidenced by its clients at the conference, Kenexa has complemented and strengthened IBM’s talent management capability.

Pre-acquisition, turnover rates at Kenexa were historically low at around 8% and they have decreased post acquisition, providing further evidence of walking the talk.

• 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