I recently attended Korn Ferry’s RPO Client Advisory Forum, which was all about talent management. The theme was ‘unplugged’ and featured frank discussions about the RPO industry, including the challenges faced by the clients and service providers who attended from every region.

Beyond RPO, Korn Ferry offers many complementary talent management services, including those from its Organizational Consulting practice. One of the emerging talent trends of 2019 presented by Byrne Mulrooney, CEO, Korn Ferry RPO, Professional Search and Products, is rethinking performance management, and here, discussion topics included: engaging talent to create solutions that transform, helping people to see brilliantly, and building value through people.

Korn Ferry’s goal is to be the preeminent organizational consultancy, specifically regarding talent and the importance of articulating the right relationships.

Partnering with Qualtrics

As a step towards its goal, Korn Ferry and Qualtrics partnered earlier this year to build a global delivery and advisory service to improve employee experience. The partnership combines Korn Ferry’s Organizational Consulting services with Qualtrics’ Experience Management (XM) platform, to be applied throughout the employee lifecycle.

By joining the Qualtrics Partner Network (QPN), Korn Ferry is going to market by combining its organizational methodologies and expertise with Qualtrics’ XM platform to provide organizations with the expertise and technology they need to achieve breakthrough results at every stage of the employee lifecycle.

Korn Ferry has standardized on Qualtrics as its technology platform and will become a global strategic consulting partner for Qualtrics, providing end-to-end delivery and advisory services for clients globally. Through the QPN, Korn Ferry will also offer consulting and advisory services to Qualtrics EmployeeXM customers in more than 50 countries globally.

The partnership will enable Korn Ferry to go to market with offerings that include its platform, employee engagement and culture surveys, 360-degree reviews, and social listening tools, to enable employers to better manage talent and the associated talent management systems.

Impact for RPO buyers

Per NelsonHall’s recent RPO market analysis, including interviews with end-user buyside clients, one of the top drivers for outsourcing recruitment today is to gain better access to expertise, insights, technologies and tools. This is an area Korn Ferry has excelled in according to client satisfaction data. Recent interviews with Korn Ferry clients conducted by NelsonHall revealed high client satisfaction scores for their partnership capabilities in particular. And, having now attended three events with Korn Ferry RPO providers and buyers, my observation is that Korn Ferry does have a very strong relationship with its clients.

In terms of what will be driving buyers to outsource recruitment in the future, the research indicates that this will include requirements for talent management services that are complementary to RPO, such as internal development of existing employees through upskilling and reskilling.

Last week I attended PeopleScout’s annual client NEXT Talent Summit 2019. In the keynote address, President Taryn Owen noted that this event marked one year since its acquisition of TMP to strengthen its global RPO and talent advisory capabilities. TMP, which operated in the U.K. under the brand name TMP Worldwide, provides employer branding, recruitment marketing, and RPO services through its Yocto brand. The acquisition expanded PeopleScout’s global RPO capabilities and EMEA client base, and its London office became PeopleScout’s EMEA headquarters. TMP expanded PeopleScout’s talent advisory offering by adding services such as employer branding, recruitment marketing, assessment services and talent acquisition strategy.

PeopleScout has also been growing organically, adding over 45 RPO contracts in 2018, and now has over 215 RPO clients with over 300k annual hires. In addition, there were around two dozen contract extensions. PeopleScout continues to be the largest RPO provider in terms of revenues in North America and they have continued to grow globally, across EMEA, APAC and LATAM. Half of PeopleScout’s employees are now based outside of the U.S.

Taryn Owen stated that a major priority for PeopleScout is its Affinix technology to enable a better user experience for candidates. Affinix is built on Amazon Web Services (AWS) cloud infrastructure, integrates with all ATS and VMS systems, and has a single sign-on. Its capabilities include:

• Digital and social recruiting, including the creation of job ads, job descriptions and career portals
• Artificial intelligence, including for immediate sourcing of passive and active candidates when a job requisition is opened
• ‘Mobile first’ platform for both the candidate and the hiring manager throughout the application, scheduling and screening process
• Video interviews and digital assessments to reduce time to hire using data analytics and machine learning to identify and rank the best candidates to communicate with hiring managers faster
• Predictive analytics and machine learning throughout the hiring process to better understand top talent behaviors and predict factors such as cultural fit, willingness to change companies, and future tenure potential.

One of the presentations by Andrew Wilkinson, PeopleScout’s Group Managing Director of Europe and APAC, was on creating a compelling brand experience across the employer lifecycle. Per NelsonHall’s RPO Market Analysis published last week, employer branding has elevated in importance as the global talent shortage has worsened. And in recent interviews with PeopleScout RPO clients, this was seen as an area where PeopleScout is excelling, as these two examples indicate:

• For a U.K. grocery chain, PeopleScout created a campaign featuring videos of a diverse group of people sharing stories about managers who inspired them. The video was viewed 484k times with positive feedback, resulting in exceeding the client’s goal of hiring 3k people for a new type of role
• For Virgin Media, PeopleScout focused on increasing employee referrals, updating its referrals website to elevate employer branding, and helped to communicate the Employee Value Proposition to current employees so they could identify the kind of people Virgin Media wants to hire. Within one year, referrals increased external hiring by 10% to 25%, employee participation increased to 40%, quality of hires increased, and Virgin Media saved $9k per hire on average.

Having attended these events four years in a row, I’ve observed that PeopleScout has a very strong and collaborative relationship with its clients, reinforced by achieving high customer satisfaction marks for quality of partnership in our most recent RPO NEAT vendor evaluation.

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.

Last week, I attended Cielo’s annual analyst event, held at its service center in Buenos Aires, Argentina. Here I round up the latest high-level developments at the RPO vendor, then take a closer look at its Latin American business.

Latest developments & 2020 roadmap

Cielo performs ~157k hires for ~154 clients in ~92 countries in 36 languages. Clients are served by ~2k employees in 34 countries and 9 service centers in every major geographical region.

Judging by 2018 activity YTD, Cielo is well-positioned to continue double-digit revenue growth. So far this year there are 44 new clients (including in healthcare, hi-tech/engineering, life sciences, financial & professional services), 24 significant scope expansions with current clients, and ~90% reoccurring revenue via multi-year contracts.

Key areas of investment in 2017-2018 have included:

• Chatbots/live chat to qualify candidates in 6 questions
• High-volume hiring. This is a mobile-first platform for hourly positions where candidates can apply for jobs in under 7 minutes, be notified immediately if they qualify, and schedule interviews right away. This could be a game changer for clients with high-volume hourly hiring; results for one client include triple-digit improvement in the volume of offers accepted, double-digit increased offer rate, double-digit reduced overtime, reduced time to offer, and lower cost per offer accepted.

Cielo’s 2020 roadmap includes:

• Global footprint, including adding employees in 6 new countries, taking its total country count to 40 by 2019
• Building total talent acquisition capabilities to hire both permanent and temporary talent for its clients. To date, Cielo has total talent clients in financial services, including banking, managed services, and with a multi-national tobacco company. Per NelsonHall’s Q3 Total Talent Market Analysis, growth is expected to be ~24% globally.

Cielo in Latin America

Cielo began serving clients in LATAM from Buenos Aires to support the hiring needs of a large U.S. multi-national corporation (MNC) in the region. Today, Cielo supports the hiring needs of both MNCs and LATAM-only companies in a variety of industries including medical, pharma, consumer products, manufacturing, transportation, and energy. Over 150 recruiting staff, including ~60 in Buenos Aires, support ~24 clients with hiring needs in fifteen different LATAM countries. Cielo has hired talent from across LATAM, as well as from the U.S. and the U.K. Languages supported include Spanish, English, Portuguese, Swedish, French, Russian, Armenian, and German. Recruiters outside of the Buenos Aires center are located at client sites.

Buenos Aires was chosen as the prime location for supporting clients in the region for reasons including:

• It represents ~23% of Argentina’s GDP, has a population of ~14m within the metropolitan area, and ~3.5m in the city
• Prime cultural location, and strongly English-speaking
• A reputation for talent competitiveness (Global Talent Competitiveness Index)
• 400 technology centers, 41 universities, 574k college students and ~50k foreign students. ~70% of BA students study careers/take courses in BPO, equating to ~60K graduates each year educated in BPO disciplines
• It is ranked #10 globally as an outsourcing destination. In 2017, total BPO exports were $4.25bn, second in LATAM after Brazil.

Mexico, served in-county, has the biggest need for RPO services in LATAM, followed by Brazil in Rio and Sao Paulo (also served in-country). In South America, Buenos Aires, Rio and Sao Paulo are the largest RPO markets. Growth in LATAM is strong, with Cielo planning to double the size of its Buenos Aires service center by next year.

RPO contracts in LATAM are typically:

• In the region of $0.5m in contract value, with between 300-700 annual hires (though for one large client in the region, Cielo performs 2k-4k annual hires)
• 8-9 countries in scope, and this usually includes Colombia, Brazil, Argentina, Peru, and Chile
• With MNCs (90%) that are familiar with the RPO model in other regions, and want to replicate it in LATAM.

Last week, I visited the recruitment and talent management vendor Alexander Mann Solutions’ Global Client Service Center (GCSC) in Cleveland. Here I take a quick look at the growth of the operation and at recent initiatives.

Cleveland as a location

Alexander Mann Solutions (AMS) has seven GCSCs, the fourth of which opened in Cleveland in September 2012 to support AMS’ vision of providing global capability with in-country/region presence. AMS’ other GCSCs are in Bracknell (U.K.), Belfast (N. Ireland), Krakow and Gdansk (Poland), Manila, and Shanghai.

AMS was attracted to Cleveland for several reasons, including being a lower cost area than other major U.S. cities. Cleveland also has a stable workforce and effective partnerships with colleges and universities for hiring new graduates. The average age of recruits is 27, and there is an attrition rate of 18% (12% voluntary), lower than the average millennial attrition.

AMS does hiring for its clients in all major regions globally, and ~40% of its RPO clients are headquartered in the U.S. However, it was a European automobile manufacturer with hiring needs in the U.S. that led to the creation of the Cleveland GCSC to support clients in-country. This was followed by a need to support a long-standing U.S.-headquartered investment bank, a client of AMS since 2006 for whom AMS performs thousands of RPO hires annually. 

The Cleveland GCSC started with just 14 employees supporting four clients. Today, over 200 employees support 14 clients in four languages across Eastern and Pacific time zones with services including recruitment, sourcing, administration, business intelligence, branding/marketing and internal operations. The GCSC’s clients are from the banking and financial services, insurance, retail, hospitality, and sales sectors.

Automation initiatives

AMS has nine bots that automate and streamline processes for repetitive manual activities. Three of the bots it uses are:

• DORIS: used to automate document administration. Implemented in 2015, what used to take 10 weeks’ worth of work can now be done in 36 hours
• ISAAC: automates interview scheduling, using robotics to automate processes and interface with candidates. ISSAC automates 90% of interview scheduling; the other 10% is done by employees when last minute changes need to be made to interviews scheduled and candidates need to be contacted via phone
• HANA: automates help currently provided via text chat (though voice capability can be activated where needed).

Talent development initiatives

Recent talent development initiatives include:

• Defined career paths and internal mobility programs for employees (in 2017, ~10% of the Cleveland GCSC was promoted)
• A global internal mentoring program (after nine months on the job, any employee can volunteer to be a mentor)
• Ability for employees to become virtual trainers after nine months
• Use of Yammer social networking to share best practices
• Pulse-point surveys.

In 2017, AMS was recognized by NorthCoast 99 as a ‘Best Place to Work in North East Ohio’ for the fifth consecutive year. The Cleveland GCSC is also certified as ISO 9001 Quality Management and ISO 27001 Information Security.

Looking ahead, though Cleveland supports all of the Americas, anticipated growth in Latin America (currently supported by ~50 people working in-country) means that AMS is likely to open a GCSC in Latin America within the next three years.

At its recent Talent Summit, PeopleScout announced the expansion of its service centers in the U.S., Canada, Europe, and Asia Pacific, plus the acquisition of TMP Holdings, a provider of employer branding and RPO services operating in the U.K. via Yocto, the RPO division of TMP Worldwide.

Already the largest RPO provider in terms of number of hires (~300k annually) and the largest RPO provider in terms of revenue in N. America, this acquisition makes PeopleScout one of the major RPO contenders in the U.K., moving from ~20^th largest in terms of revenue to ~5^th.

This acquisition expands PeopleScout’s EMEA client base and strengthens its global RPO capabilities. TMP’s London headquarters will become PeopleScout’s EMEA headquarters, and its Bristol delivery center also joins PeopleScout’s global delivery center network, which supports clients in ~70 countries. Bristol and London will continue to support TMP’s current clients.

In addition to expanding PeopleScout’s EMEA and global RPO capabilities, the acquisition adds a talent advisory offering which includes employer branding, recruitment marketing, assessment services, and talent acquisition strategy. Andrew Wilkinson, TMP CEO, will join the PeopleScout executive leadership team and report to President Taryn Owen as Group Managing Director of EMEA.

This latest acquisition continues PeopleScout’s global expansion, with Owen stating that just under half of all their clients have been involved in an acquisition. Previous significant acquisition activity on its expansion path includes:

• U.S.-based RPO and MSP provider SeatonCorp in 2014, which also expanded its presence in APAC
• RPO provider HRX in 2015 to expand its presence in Australia and New Zealand as part of the One Global PeopleScout initiative to increase its global footprint
• Aon Hewitt's RPO division in 2016, another One Global PeopleScout initiative, bringing 650 employees based in the U.S., Canada, Poland, and India
• The addition of MSP services transitioned from Staff Management|SMX, another TrueBlue company. With this addition, PeopleScout expanded its ability to provide total workforce services, with RPO and MSP services being blended into one overall service under one brand, while still offering RPO and MSP as stand-alone programs. This move enhanced its global capability (global MSP contracts account for ~19% of the market, with another 28% of the market represented by multi-region or multi-country contracts).

Putting PeopleScout’s continued geographic expansion into context, NelsonHall’s RPO market analysis shows that ~31% of RPO contracts are in two or more countries, with 16% in two or more countries in a single region, 7% in two or more regions, and 8% global (in three or more regions).

Approximately 34% of PeopleScout’s contracts encompass two or more countries, which is 3% more than the industry average. In 2018 and beyond, NelsonHall expects the proportion of single-country contracts to decrease and all other multi-country categories to increase to ~35% by 2021, and PeopleScout’s share to increase to ~40%.

Last week, I attended and presented at Futurestep’s second annual client event, themed Talent Disruption: What’s Next? with clients attending from Asia Pacific, Europe and North America. Below is a round-up of the event’s main talking points.

Key talent acquisition & retention challenges

The following summarizes some of the key challenges presented by Futurestep’s clients, which align with what NelsonHall is seeing across vendor clients globally:

• Talent shortage will only increase. Per Korn Ferry’s Global Talent Crunch study, there will be a possible talent deficit of 85.2million workers by 2030, with India being the only country to have a talent surplus
• Having the right talent, including the right cultural fit. To achieve this, you first have to determine the best talent more quickly, including being able to demystify resumes and match candidates faster
• Creation of talent banks, talent pipelining and talent communities are more important than ever before
• More automation will be needed. However, there is a false expectation that all technology means better and that it will eliminate manpower, and this is not always the case as businesses always want to do more with less
• Once you determine the candidates you want, they need to be given a standout experience.

Another challenge that featured strongly was that companies need to have an effective employer brand. Consumers and candidates have evolved. Twenty years ago, it took three impressions for candidates to decide on which employer they wanted to work for; today that number is 7-10 brand exposures. See also Employer Branding: An Essential Talent Management Strategy.

And the subject of cultural challenge was also covered, with one presentation on the world’s most admired companies citing the following challenges: the importance of culture supporting your strategy, the need to measure the impact of culture, and also to reward desired behaviors.

Perhaps the biggest challenge, however, is that leaders do not spend enough time on people-related aspects of the business, and would do well to follow the example of the most admired companies (whose leaders spend an average of 30% of their time on talent management, including talent acquisition and talent development).

So what is next for talent disruption?

NelsonHall research based on interviews conducted with end-user RPO clients in 2017 showed that candidate communication ranked highest in terms of future client importance at 96%, yet client satisfaction with candidate communication was only 82%, a big delta. Chatbots/virtual assistants were, not surprisingly, one of the most talked-about disrupters at the event. And, importantly, they are able to address the big issue of candidates not hearing back from potential employers.

Chatbots can complete up to 80% of candidate communications, e.g. understanding and evaluating candidates’ responses to job descriptions, sending job postings to candidates, scheduling interviews, answering questions, and providing updates (e.g. when a position is filled). They use NLP and machine learning to chat with candidates in their preferred language, and they also increase the speed of applicants to interview and the ratio of applicant to hire. In the case of Mya from Mya Systems, there is a 4:1 applicant to hire ratio vs. the industry average of 10:1, and it takes less than 72 hours to get candidates to the interview stage.

You can read more about talent acquisition virtual agents in a recent blog by my colleague Nikki Edwards.

At ADP’s annual Meeting of the Minds client event this past week, what caught my attention most were the initiatives geared towards improving employee engagement/satisfaction and retention. Clearly, ADP has identified these areas as key, with its own research institute finding that ~2/3 of all turnover is voluntary – i.e. employees are leaving because they have not been given a reason to stay. Here I look at some of ADP’s engagement and retention initiatives currently in play.

Improving the user experience in benefits administration

ADP manages benefits for 15 million employees – that’s 1 in 8 employees where employer benefits are provided. Not only is providing employee benefits important for the attraction of talent, but also in providing a positive employee experience and for retention of talent.

NelsonHall’s most recent Next Generation Benefits Administration market analysis report reveals that one of the top client drivers for outsourcing benefits is improving overall support around the employee/participant experience, including increasing employee participation via self-service and improving communications. A critical success factor here is incorporating convenience features into the user experience to reduce user frustration. Vendors need to add convenience features for participants, such as the following features offered by ADP Benefits Administration:

• Ability to receive continuous client feedback, including from annual enrollment
• Of ADP’s 160 Participant Service Center (PSC) annual enrollment clients, 91.5% of callers receive an answer to their inquiry in less than 45 seconds from the point at which they elect to speak to an agent. This has resulted in 95.9% customer satisfaction
• Option to receive a scheduled call-back
• Saturday call center hours
• Spanish call center (the center in Guadalajara, Mexico is also a top performing center)
• 24/7 email query capability and 24/7 live chat (live chat to be fully implemented by end of year)
• Concierge service option, with a dedicated support team
• Where clients use more than one of ADP's services, client executives are assigned to own the entire relationship across all services. The client executives add value in many ways, including hosting internal calls to discuss how to best facilitate client delivery across all services.

​Addressing employee retention: client case

Employee attrition has been increasing. Per the bureau of labor statistics, median employee tenure was 4.2 years in January 2016, down from 4.6 two years earlier. An example of an ADP client facing a significant challenge with retention was Developmental Disabilities Institute (DDI), who had a turnover rate of 36% for several entry-level positions, with 41% of staff terminating within the first year of hire. Key initiatives deployed to address the situation were:

• Focus groups with employees who have stayed longer than a year to talk about why they remained. Output from this was then added to the Employee Value Proposition (EVP) on the employee portal
• A custom 3-day classroom training course for all frontline managers on how to better engage employees
• Monthly program for new managers to come together and learn strategies and techniques from one another
• A better and faster onboarding experience, ensuring new employees are fully connected to all company resources and communications on day one
• Based on employee feedback, introducing events like holiday parties and picnics for associates and their families.

Results of these initiatives included:

• Reducing new hire time by 45%, from 51 days to 28
• Increasing exit interview participation by 20%
• Reducing turnover in 2017 by ~42%.

Summary

Success in initially attracting talent is not much of an achievement if an organization fails to retain that talent. Hence, initiatives for providing an enhanced employee experience, such as the ones implemented by ADP, are essential to avoid unwanted attrition.

However, it’s also essential to analyze and measure the effectiveness of those initiatives. NelsonHall’s most recent interviews with the clients of benefits administration vendors reveal that use of analytics for process improvement and employee insight was one of the highest rated vendor attributes sought, with a future importance score of 90%. And yet client satisfaction in this area, across all vendor clients interviewed, was just 62%, which should provide food for thought for HR services vendors.

Here I look at how working with candidates has emerged as the top area for improvement. Below is a small selection of potential benefits sought by RPO clients, each one related to the candidate process, showing current client satisfaction levels compared to future importance.

Candidate communication is considered to be of highest future importance, but current satisfaction levels lag some way behind, indicating that vendors have work to do in enhancing the ways in which they engage with candidates.

Similarly, targeting of passive candidates is considered to be highly important in future, but current satisfaction levels fall short by the same amount. Clients are expecting vendors not just to engage with active candidates, but to leverage a much wider talent pool that includes passive candidates. This was also reflected in the importance and satisfaction levels recorded for vendors’ ‘capability to deliver across diverse candidate populations’.

All of this tallies with the top client driver for RPO identified in NelsonHall’s market analysis report, which is ‘leveraging vendor expertise to better attract candidates’.

When asked about their expectations related to the candidate process, comments from clients included:

“… scheduling interviews, liaising with the candidates and hiring managers, booking local facilities, and making sure that everything is available that needs to be available – video conferencing, psychometric testing, etc. Also, sitting in at the interview, as a representative of the company.”

“I definitely think there is room for improvement… most of the time they reach out to active candidates only.”

“We have more work to do with hiring managers in working with external candidates… with the candidate experience, sometimes we lose control over the hiring managers when they come into the equation.”

Another related area that showed a large gap between satisfaction and importance was use of social media. Client comments on vendor performance in this area included:

“This is an area where we have struggled, there has been a gap in terms of their presence on social media and this is something they have started to look towards now, understanding the importance of a cohesive approach.”

“We have a model that does not provide for active pipelining. So, the only way they can engage candidates today is by email campaigns, which aren’t as effective as if they were keeping talent pipelines warm and talking to folks (via social media) to keep them interested in us.”

The big picture is that RPO providers are meeting client expectations in a number of areas, including reduced time to hire and cost reduction. These were the primary areas of vendor focus when RPO began, and that focus has clearly paid off. However, vendors need to turn their attention to areas related to candidate handling, where there is a clear opportunity to raise their game.

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 RPO NEAT shows how RPO vendors are positioned overall in terms of their ability to deliver recruitment services, as well as within three distinct market segments: these are Global/Multi-country Focus, Candidate Experience Focus and Innovation Focus. The NEAT online tool also enables buy-side organizations to input their own weightings and tailor the RPO dataset to their specific requirements across over 40 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. To find out more, Contact Guy Saunders.

Recent NelsonHall interviews with the clients of the top ~20 global RPO vendors revealed that candidate communication was rated the most important vendor characteristic, with an importance score of 96%. However, the satisfaction score for candidate communication across all vendor clients was 82%, falling some way short of client expectations.

Recognizing the importance of candidate satisfaction as integral to attracting and retaining talent, PeopleScout recently launched a new technology, Affinix, to improve candidate communication and the overall candidate experience.

Embedded within PeopleScout’s offering, Affinix is built on Amazon Web Services (AWS) cloud infrastructure, integrates with all ATS and VMS systems, and has a single sign-on.

Affinix capabilities include:

• Digital and social recruiting, including the creation of job ads, job descriptions and career portals
• Artificial intelligence, including for immediate sourcing of passive and active candidates when a job requisition is opened
• ‘Mobile first’ platform for both the candidate and the hiring manager throughout the application, scheduling and screening process
• Video interviews and digital assessments to reduce time to hire using data analytics and machine learning to identify and rank the best candidates to communicate with hiring managers faster
• Predictive analytics and machine learning throughout the hiring process to better understand top talent behaviors and predict factors such as cultural fit, willingness to change companies, and future tenure potential.

Though only recently launched, PeopleScout is already working to implement Affinix with several dozen clients, and preliminary results include:

• Increased capture of candidates by ~40% via a fast and user-friendly application process, and automatic calendar interview scheduling with hiring managers, including the ability to do so via text
• Reduced time to hire, with candidate scheduling time reduced by 8-10 days.

In summary, Affinix has the ability to engage candidates and communicate quickly to identify, screen, and assess the right talent for the job with the best likelihood of long tenure – which should go some way to meeting clients’ high expectations for the candidate communication process. 

Sevenstep RPO held its second annual analyst event last week. In addition to analysts, advisors, vendor leadership, and key service providers, practitioners/buy-side clients also attended for the day, including Commonwealth of MA, Amazon, and CVS. Here I discuss a few key take-aways.

Sevenstep RPO overview

With ~300 employees, Sevenstep RPO has global delivery centers in three countries, and onsite and remote employees delivering RPO in 47 countries across 6 continents.

Clients use Sevenstep services at a number of levels, including Enterprise RPO (e.g. Aetna), Project RPO (e.g. Amazon), Blended RPO (e.g. Toshiba), Data Analytics (e.g. CVS Health), Employer Branding & Talent Attraction (e.g. Equifax).

The company has 94% staff retention, and 97% management level retention. ~60% employee growth has come from internal staff promotions. Client retention is >85%, and >80% of clients have had their SOW expanded.

In 2017, Sevenstep will achieve 25% all-organic revenue growth, more than double the 11.4% overall RPO market growth rate forecast by NelsonHall for 2017.

Employee care focus

~20% of employees work remotely from onsite or at home. Sevenstep created a new position, “flexible workforce”, to scale clients quickly, using staff working flexible hours. This not only meets client needs (an example being quickly scaling a client from 12 to 80 hires), but also in meeting employees’ lifestyle needs (as in the case of an employee needing to take care of an elder).

There are ~160 specialized training courses and four certifications for employees, with recruiters receiving an average of 60 hours’ training annually.

Employee benefits include a low-cost family medical plan, 100% salary for 3 months’ maternity leave, and unlimited PTO at a certain level, where vacation does not need to be approved and tracked.

The working environment is geared towards optimizing productivity and collaboration. Features include:

• Account teams sit together in pods, and phone systems are linked so that managers can listen in on candidate calls for training, coaching, and learning from each other, with the effect of increasing time to competency
• Each account team holds a morning “daily spotlight” review, looking at metrics, and identifying who needs help, etc. Each day, the team documents its key objectives, including hiring goals and achievement levels
• Service providers have formed various clubs, e.g. fitness, and often collaborate outside of work
• Yammer social networking is used to engage across each service center.

YTD employee attrition is just 2%. Sevenstep does not lay off employees, but scales up and down by moving employees between accounts.

2018 focus

Sevenstep RPO’s key focus areas for 2018 include:

• Geographic growth plans – e.g. Australia, where Sevenstep now has six people based on client site
• Reducing cost and increasing quality (i.e. value-add beyond simply filling the recruitment brief)
• Continuing to be technology agnostic, working with any platform (though SevenStep has its own Talent AI recruiting analytics platform)
• Recruiter training focus to include strategy, onboarding, how to treat candidates.

At the end of the event, Sevenstep also encouraged attendees to brainstorm and create a SWOT analysis of their own on the organization, from which additional opportunity areas emerged including  consulting and total talent. 

randrr is a free career opportunities platform focused on providing individuals with insights to take control of their career development by helping them to identify and align with the opportunities they are best suited for. randrr’s goal is to be the only resource that people need to manage their career objectives. Here I take a closer look at the randrr platform.

Why the need for change?

randrr stands for ‘reinventing and revolutionizing recruiting’ and was developed to place the job-seeker at the centre of the job search process rather than the company, and to help people to take control of managing their careers. From their market research, feedback randrr learned from job-seekers included:

• Marketability: Having a career path was identified as the most important factor by younger job seekers in the job search process, but with key questions around marketability. For example, how do candidates know if they’re looking for jobs in the right location, in the right industry, or even in the right pay grade? Which jobs are they most qualified for? How does their compensation compare to others with similar experience in their industry or geography?
• Time: The job search process can be a long and drawn-out ordeal
• Effort: Searching for jobs is a job in and of itself
• Access: Candidates only being able to conduct a job search from their desktop greatly hinders the amount of time they can spend applying
• Uncertainty: Candidates not knowing where they are in the application process can create unnecessary stress and disorientation
• Relationship: Candidates can feel disconnected from companies
• Stagnation: Job searches have gone from paper resumes getting lost in stacks of paper to digital resumes getting lost in an email inbox.

~72% of respondents indicated that online job search technology was not intuitive or transparent. Online job searches and applications registered negative feelings, with the words ‘frustrating’, ‘disappointing’, and ‘depressing’ often being applied. In addition, job-seekers indicated that they want more feedback during the application process, more relevant and up-to-date jobs visible online, and an easier process to find jobs.

randrr aims to address these concerns by connecting people and companies in a better way – for example, using Zillow as an analogy (which allows you to see how improvements made to your home should increase its market value), the same principle can be applied to careers. Education, acquired skills and experience all increase a job-seeker’s personal value and marketability to prospective employers.

randrr approach & capabilities

The randrr approach puts the candidate at the center of things, providing the knowledge to help candidates feel confident regarding the career choices they make. This can include changing jobs, as well as exploring and taking actions to support their long-term plans and objectives. Recent recruitment process outsourcing (RPO) research conducted by NelsonHall shows that improving candidate engagement and satisfaction is of paramount concern, is one of the top drivers for companies seeking help from RPO specialists, and is also a key criterion by which vendors are ultimately selected. In NelsonHall client interviews, candidate satisfaction scored 80%. This might seem a high rating, but when asked about future importance of candidate satisfaction, clients scored it 90%, so there is clearly still an expectation gap to fill.

Phase 1 (closed beta release) of randrr started in May 2017. randrr is built to run on mobile first (>75% of all people searching for a job today do so using a mobile device); however, it also runs on other devices.

randrr allows individuals to discover their career potential and explore options for defining career paths that will help them achieve their goals. This is all done privately, so that no one else will be able to see jobs being considered, changes to job-seekers’ resumes, etc. randrr capabilities include:

• Ability to define what type of job you want to do, which may be your dream job (e.g. Sales Director), what are the steps to get there, including experience/positions needed, the top 5 skills you need to acquire, and how long it will take to get there
• randrr will recommend an occupation/job based on your experience, skills and salary – i.e. pointing to the next step in your career. Up to 50 career paths can be saved at one time, for those who are thinking of multiple career options
• Using proprietary system intelligence, randrr will match individual job experiences to desired occupations, and the algorithm will provide candidates with insights to understand available options. For example, if you have been in sales the last 5 years, what job options are available if you remain in sales, or what alternative career options are there?
• Based on your salary, randrr will compare where you are positioned relative to the market salary range across major U.S. geographies (global capability to be added). Comparisons can be done for multiple jobs by industry and geography
• By identifying job opportunities on randrr, candidates can link to the hiring company’s website and make applications
• Notification of job availability: candidates can determine the frequency of job alerts and how they wish to receive them, e.g. in app, email
• Users are able to upload their resume, or randrr can generate a tailored resume based upon the information that they provide
• Users can define and add in additional skills and other information any time, including education updates, courses taken, performance appraisals, and achievements (e.g. certificates, recognition received, articles written, conferences presented at, etc.). All this information is private and unknown to others (unlike LinkedIn, where others connected can see changes you make). Another key benefit is having a single place to store all this information
• Companies will also benefit by being able to share their job postings and an informative company profile with randrr users at no cost.

Looking ahead

The following randrr enhancements are planned:

• Ability to rate the interview process, including whether you heard back on the job application, if you were not interviewed, or interviewed but not hired (and why not)
• Additional career guidance
• Employer branding and culture: obtain information on company culture from job applicants, current and past employees, and provide feedback to the hiring company. Based on demand, consultants could be deployed to work with senior leaders to review results and work on improvement plans
• Anonymous interaction and direct connections between companies and individuals
• Global capability.

Summary

randrr helps job-seekers discover their career potential and identify the next career move to make. It also lets individuals set career goals and provides a path for achieving them. randrr helps candidates to understand their marketability based on skills, education and experience compared to others in the same position. randrr then identifies gaps to be filled (e.g. the main skills to be acquired) to enhance marketability and make progress on the job-seeker’s career path.

While built for the job-seeker primarily, a key benefit for employers is that companies with job openings will have a wider pool of the right talent available to them by reaching candidates identified as having the right skills and experiences.

The anticipated go-live date is early fall, 2017. Users can register for early access by visiting https://randrr.com/.

~3-4 months after go-live, I will interview users of randrr to get their feedback on benefits obtained and gather feedback on what enhancements they would like to see in the future.

Last week, Randstad Sourceright (RSR) held its annual client forum. Amongst the many topics discussed was Randstad’s and RSR’s commitment to invest in and transform its clients’ recruitment technologies, with a focus on innovation. Here I look at some of their initiatives in play.

Reviewing new recruitment technology

Per NelsonHall research, access to improved technology is one of the top recruitment outsourcing drivers. Talent acquisition technology is improving the delivery of recruitment services, resulting in higher quality candidates. New recruiting technology is continually being released, and some vendors, including RSR, have dedicated groups who review and evaluate new technology on an ongoing basis, and provide recommendations on which technology to incorporate. Not surprisingly then, the top buyer vendor selection criterion is recruitment service capability, which includes recruitment processes that leverage the latest and best technology.

In 2015, Randstad Sourceright interviewed ~250 clients to understand their challenges and goals and identified ‘technology innovations to manage talent solutions’ as the greatest need with a score of 71%.

Randstad Innovation Fund

Innovation is also one of the top vendor selection criteria, which includes vendors providing sourcing creativity, including in technology, and continually introducing new ideas and recommending new services. Buyers are looking for a vendor focused on continuous process improvement and innovation, with a partner that is future focused and understands and incorporates the latest trends and tools.

In 2014, Randstad Holding launched the Randstad Innovation Fund to identify, evaluate, invest in, and collaborate with, HR and talent technology companies. The innovation fund continuously evaluates the market for developments in social sourcing, recruitment marketing, talent assessment, freelancing platforms, mobile solutions, virtual solutions, gamification, and analytics. There are ~2,000+ HR tech ventures tracked globally by the Randstad Innovation Fund to date, with investments made by the Randstad Innovation Fund including:

• Twago: European freelancer marketplace with more than 255k experts in 190 countries
• Gigwalk: mobile workforce management platform for large distributed workforces
• RolePoint: online employee referral platform
• Vonq: European provider of online recruitment marketing services
• RiseSmart: technology driven career transition services and outplacement platform, acquired by Randstad in September 2015
• Brazen: allows organizations to host online recruiting and networking events and leverage real-time ‘many-to-one’ chat interactions
• Checkster: automated reference checking and other talent decision tools
• Gr8 People: comprehensive recruiting platform
• Crunchr: analytics platform supporting workforce planning, succession, talent management and employee preferences
• Pymetrics: job recommendations using big data, neuroscience, and gamification to identify best talent job fit
• Monster: In Q4 2016, Randstad completed its acquisition of Monster Worldwide Inc. to leverage Monster's digital, social, and mobile solutions for talent acquisition
• Wade & Wendy: a fully-automated chatbot to interact with candidates and clients using AI. Wade helps applicants introduce opportunities and shape their careers, and Wendy can assist hiring managers to build their teams
• Joberate: crawls public social media daily, looking for people’s job seeking activities
• HackerRank: an online recruitment community and assessment tool, using coding challenges in a variety of programming languages to source, rank, and match top programmers.

Also, important to note is TalentRadar, RSR’s proprietary technology platform which analyzes all aspects of the talent acquisition and retention process. It combines data from multiple sources in a single dashboard view, automates alerts on critical recruiting operations metrics, and provides predictive analytics.

Continued investments

RSR will continue investment in technology via the Randstad Innovation Fund and incorporate selected solutions into its technology offering to provide greater efficiencies and value for its clients, and improved candidate experience. RSR will also continue to make ongoing investments in its global Talent Innovation Center, which provides thought leadership, innovation and overall expertise in recruiting strategies, employer branding, diversity, and new practice areas surrounding talent and market analytics, technology enablement, and veteran recruiting.

PeopleScout held its annual Client Forum last week, with discussion groups covering employee engagement, diversity and inclusion, employer branding, the talent landscape, total workforce solutions, the impact of industry disruption on best practices, and improving the employee experience.

All these HR themes are important, but here I look specifically at what PeopleScout is doing to prepare for the changing world of work in three areas:

• Global expansion
• Offering total workforce solutions
• Enhancing its technology offering.

Global expansion

Globalization is changing how we access the workforce, and at the same time HRO contracts are becoming more global and multi-country in scope. For example, ~43% of all RPO contracts include hiring for more than 1 country, ~10% are global with hiring in 3 or more regions, 11% are multi-regional in 2 regions, and 22% are multi-country within 1 region. Steps in PeopleScout’s expansion include:

• In 2014, Seaton Corp acquired HRX, an RPO provider in Australia and New Zealand. In 2015, HRX integrated and rebranded as PeopleScout to expand its global capability, including in Asia Pacific
• In 2016, PeopleScout acquired the RPO division of Aon Hewitt, whose clients include Fortune 500 companies primarily in hospitality, banking, industrial, retail, government, and service industries.

Today, PeopleScout services clients in ~70 countries from delivery locations including Chicago, Charlotte, Sydney, Krakow, Beijing, Toronto, and Montreal. For one of its Healthcare clients, PeopleScout performs ~5,000 annual hires across ~70 countries.

Total workforce solutions

Most companies’ workforces are becoming more blended, including a combination of permanent, temporary, contractors, freelancers, FT and PT workers. Many of the new jobs being created are for contingent workers. NelsonHall research indicates that today, ~10% of RPO and MSP contracts are blended, supporting both permanent and contingent workforces. NelsonHall estimates that this will rapidly increase to ~15% of all contracts being blended within 3 years.

To meet client needs, in January 2017, PeopleScout added MSP to its suite of talent services. MSP services were transitioned from Staff Management/SMX, a TrueBlue company, to PeopleScout, along with its entire service provider teams. With this addition, PeopleScout expanded its ability to provide total workforce services, where RPO and MSP services are blended into one overall service under one brand (while offering RPO and MSP as stand-alone programs).

Technology enhancement

By the end of summer this year, PeopleScout plans to have a new integrated technology that sits on top of existing applicant tracking systems and will have candidate experience as its core focus. This includes:

• Mobile first, to apply for jobs, and for recruiters to schedule interviews
• Chatbots and messaging to engage with candidates
• Artificial intelligence and RPA to identify top talent more quickly, decreasing time to hire
• More personalized experience, aimed at treating candidates like customers.

I anticipate that PeopleScout will continue to have high double-digit growth attributed not just to its global service offering, but to the way the company engages with its customers. This was the second straight year I spent two days with PeopleScout and its clients, and what I observed is a partnership that is genuinely communicative and effective.

In NelsonHall’s 2016 RPO market analysis, recruitment capability and cultural fit were identified as the top two vendor selection criteria. With a 98% client retention rate, and with 94% of those retained expanding their business on renewal, PeopleScout is evidently delivering against clients’ most important priorities.

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.

Seven Step RPO recently held its first analyst event, which featured a select group of analysts and recruitment SMEs, two clients, and six members of the Seven Step leadership team. This made for an engaging dialogue around Seven Step RPO’s services, strategy, and best practices, with both clients (CVS Health and engineered product firm TriMas), contributing to the discussions throughout the day. Here I take a look at some of the main RPO themes that emerged.

The importance of company culture

Both CVS Health and TriMas identified the importance of company culture when working with an RPO provider. This includes:

• Leading on values – e.g. CVS Health recognized that Seven Step RPO shared its own belief in recruiting on values first
• Willingness to learn – the RPO vendor may not know everything on day one, but a willingness to learn and adapt is essential, particularly if the environment the vendor is recruiting for is constantly changing
• Quality and strength of the vendor team – e.g. TriMas identified the seven-step career path of Seven Step RPO’s recruiters as one of the reasons they chose to work with them
• A ‘can do’ attitude – something that both CVS Health and TriMas attribute to Seven Step’s rigorous training. There are ~160 specialized training courses and eight certifications, with recruiters receiving an average of 60 hours training annually
• Openness – e.g. in allowing direct access to the vendor’s senior leadership, as well as knowing the Seven Step delivery team on a first name basis.

Scalability

TriMas stressed the importance of wide country coverage, with Seven Step now delivering RPO in ~45 countries across North America, Latin America, Europe, Middle East and Asia Pacific. However, as TriMas is an acquisitive organization, scalability is just as important. According to NelsonHall’s recent RPO market analysis study, scalability and agility to meet business needs is the top driver for RPO.

CVS Health also highlighted scalability as a key capability. Seven Step currently hires ~3,500 personnel annually for CVS, and is capable of scaling up or down quickly. This is evident in the floor plan Seven Step uses for its recruiters, with client-dedicated pods designed with flexibility in mind so that recruiters can move quickly between clients as needed.

Predictive capability

Seven Step RPO’s Talent AI (Actionable Insights) predictive analytics platform allows it to make proactive and insightful suggestions to improve the quality, quantity, and timeliness of talent acquisition decision-making. The reports library is extensive and fully customized to the SLA/KPI strategy for each client, giving clients a high level of recruitment visibility.

Predictive decision-making is one of the key tenants of CVS Health’s talent acquisition strategy, and it is the first client to use Seven Step’s Talent AI directly themselves (at manager level). It also plans to extend this to their own recruiters.

Outlook

The company has been selective in choosing the right clients they can grow with and transform, while at the same time not growing so fast that they have difficulty meeting client needs. Its delivery centers are currently in the U.S. (Boston and Denver) and in the U.K. (Reading and Devon). To date this has worked well in terms of meeting client needs, as they are prime locations to attract recruiter talent. However, as they are higher rent locations, Seven Step is also now looking at offshoring opportunities, possibly in India and Manila, for some of its back office administration as well as in-region support.

ADP’s recent annual Analyst Day was held at its new Innovation Lab in Pasadena, California, with CEO Carlos Rodriquez and others articulating ADP’s strategy and vision for its clients. Top of Rodriquez’s list of priorities was the ability to meet the global talent needs of clients, the importance of which was underscored by several client presentations, including one from Irma Long of Follett Corporation, the focus of this blog.

Rodriquez’s opening remarks reflected ADP’s strong focus on talent management, including:

• Recognizing that the job of the CHRO has changed, and is now focused on attracting the best talent
• The importance of focusing on the user and associate experience
• The objective of solving clients’ business problems seamlessly and completely (including via ADP’s HCM solutions).

Addressing Follett’s requirements

Follett Corporation is the world’s largest source of books, entertainment products, digital content, and multi-media for libraries, schools and retailers. Follett has 10k associates and averages 18k employees during its busy season.

Amongst Follett’s HR requirements was the need for a recruitment system that was configurable and simple to use, and that alleviated their store managers from the burden of recruitment. Follett also wanted to improve the candidate experience.

Follett is an ADP Vantage HCM client, with services that include HR, Payroll, Benefits, Recruitment, Onboarding, Talent Management, Background Screening, and ADP DataCloud. To help fulfill Follett’s recruiting needs, ADP held a 2-day brainstorming session with the client. As a result, ADP was able to significantly improve the candidate experience for Follett, with initiatives including:

• Employment Branding, with the objective of treating candidates as individuals, and not just as a set of résumés. An interactive website was implemented, which gives candidates the ability to chat instantly with recruiters. In addition, to maximize candidate engagement, the website includes fun facts about Follett in the form of a scavenger hunt. When one question is completed, candidates move forward in the maze
• Thank-you emails to candidates visiting the website, including links to a tool to help candidates with their job search
• Talent Communities, which includes the ability for the CMO to talk to the candidate audience with a video presentation of what it’s like to work at Follett
• Social distribution of job openings, including via Facebook and Twitter, were used to improve visibility (as a lot of the candidates were not familiar with Follett).

Quantifiable results

Results to date include:

• Candidate satisfaction improved by 80%
• 90% of candidates said they would refer other candidates to Follett (even if they did not get the job)
• Candidate traffic on the Follett website increased by 90% (>200k applicants YTD)
• Process optimization reduced hiring manager workflow from 12 to 2 steps.

In NelsonHall’s recent interviews with the clients of RPO vendors, improvement of candidate satisfaction was ranked as the third most important expected benefit, after improved scalability and improved quality of hire. Although Follett is an ADP Vantage HCM client and not a full RPO client using ADP recruiters, it is still a good example of how an outsourcing provider can greatly improve a client’s recruiting process via an effective combination of service and technology. 

Employer branding has become an integral component of an effective talent strategy. It is synonymous with a company’s reputation as an employer, portraying the image of what the company is like to work for. The purpose of properly conveying and clearly communicating an employer’s brand is essential to attract, engage, develop, and retain the best talent for an organization. Here I take a look at an example of employer branding that has worked well, producing quantitative results: IBM and its real estate client Waypoint Homes.

Employer branding is already evident in ~48% of RPO contracts today, and NelsonHall’s recently published RPO market analysis reveals that employer branding is increasing in future importance to clients by 10%.

RPO critical success factors include providing consulting services that include talent pool development and employment branding, and convincing clients of better results through candidate engagement, including developing employer brand messaging to attract candidates with cultural fit and improved retention.

Waypoint’s Decision to Outsource

Prior to outsourcing to IBM Kenexa, Waypoint Homes used internal recruiters, contract recruiters, search firms, and placement agencies, which Waypoint found to be ineffective. The principle reasons for deciding to outsource were to:

• Reduce costs
• Attract top talent
• Improve the recruiting and hiring process
• Reduce screening and interviewing time by hiring managers, and focus on its core business
• Grow from a small to mid-sized public company, be able to rapidly scale up as well as down (given the uncertainty of a start-up), and not have to worry about hiring recruiters and downsizing them should a reduction in staff be required.

Services In-Scope

IBM Kenexa was chosen from among four potential RPO providers, with employer branding in-scope, which includes:

• Culture research 
• Employee value proposition creation
• Career website development, replacing an inadequate career site.

One of IBM Kenexa’s first projects completed was quantitative and qualitative research to assess Waypoint’s organizational culture. An IBM Kenexa Organizational Cultural Insight Survey was conducted, as well as stakeholder interviews and a review of company data. In eight weeks, Waypoint realized benefits from using IBM Kenexa Recruitment Services and IBM Kenexa Employment Branding, including being able to more clearly articulate company culture, and to provide input to the development of a new career website to help candidates better understand what it’s like to work at Waypoint.

Also delivered early on, IBM Kenexa rewrote existing job descriptions to be better suited for external job postings, with clearer language, and including a description of the impact these jobs have on the company.

Managers were trained in behavior-based interviewing skills, and interview guides were created for all common job types, including guidance for managers on how to assess candidates for cultural fit.

In addition, the IBM Kenexa recruitment manager was located at the client site to better understand Waypoint’s culture and to build effective relationships with hiring managers.

According to Andrew Bartlow, VP HR at Waypoint Homes, “the cultural work provided by employment branding was a huge value-add that IBM Kenexa brought to the table, in a very short time; their support helped us to more effectively source and select the kind of talent we need to be successful.”

Results Achieved

Tangible results arising from the outsourcing arrangement were:

• Cost Per Hire reduced by ~20%
• Within seven months, reduced ‘time to fill’ by ~35%
• Reduced turnover by ~22%
• IBM Kenexa RPO was able to immediately source 100% of Waypoint’s targeted hiring needs in year one, scaling up and down as needed
• Reduced administrative burden. Bartlow commented, “From IBM, we’re getting candidates with a higher hit ratio. When a candidate is presented, they are more likely to be hired than they used to be, and they’re much more likely to stay with us, and we are getting great quality candidates now. Our managers used to spend a lot of time screening and onboarding new people, when we really want them to be servicing our residents”.

NelsonHall’s RPO NEAT client survey reveals that, overall, vendors are doing well regarding clients’ employer branding expectations: satisfaction with improved employer branding exceeds current importance by 8%. In the case of IBM’s own client ratings, satisfaction exceeded importance by 20%, confirming IBM’s ability to add value in this area.

Given that future importance of employer branding is increasing, I expect employer branding to be included in ~60% of RPO contracts within three years.

We interviewed RPO vendor clients in North America, Europe, and Asia Pacific, looking at over 50 specific RPO service criteria. In each case, we ascertained importance and satisfaction levels, plus a measure of future importance. Below is a small selection of potential benefits from RPO showing the levels of importance and satisfaction for each.

Areas where vendors are under performing against client expectations are scalability, quality of hire, and hiring manager satisfaction.

Scalability: the biggest challenge for RPO vendors

While client satisfaction with scalability is high at 80%, it still falls 10% short of the importance placed on this performance measure. Our latest research identifies scalability and agility to meet business demands as the top driver for companies outsourcing recruitment today, and this has become the biggest challenge for RPO vendors. Comments from vendor clients included:

“That was one of the compelling reasons to outsource”

“Great job for effort, but only a good job for delivery”

“They are able to scale down well, but not able to scale up fast enough”

“There is an inability to bring in the right resources when scaling up”

Quality of hire & hiring manager satisfaction: could do better

Quality of hire also falls into the ‘could do better’ category, with clients pointing to issues such as:

• Need for improved quality in the selection process
• Poor cultural fit of candidates
• Lack of metrics to demonstrate quality of hire.

Similarly for improved hiring manager satisfaction, where clients asserted that vendors need to:

• Be more proactive
• Provide more of a high-touch and relationship focus
• Be more realistic and manage expectations better
• Make better use of data related to available talent to hire.   

Doing well, keep it up, and even more please

Vendors are exceeding client expectations by a healthy margin in the areas of support for new regions/countries/languages, predictive analytics, diversity, candidate retention, and employer branding. However, the increased levels of importance placed on future service delivery make these the main areas where vendors need to maintain momentum and look to deliver even more in the future.

In addition, while improved candidate experience and ability to tie results to business outcomes are meeting current expectations, future importance shows a 10% increase in both cases, while the future importance of reduced time to hire and reduced cost of recruitment both show an 8% increase. These too are areas where vendors need to continue improving.

In summary, client satisfaction with RPO across a range of service criteria is holding up well, and exceeding expectations handsomely in some cases. However, there is never a good time for sitting on laurels, and future client expectations demand that vendors redouble their efforts to satisfy clients across the board. Meanwhile, addressing those areas showing a significant delta between expectation and performance must be the priority for RPO vendors.

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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 RPO NEAT shows how 19 RPO vendors are positioned overall in terms of their ability to deliver RPO services, as well as within three distinct market segments (i.e. areas of focus designed to meet specific recruitment requirements): these are Candidate Focus, Talent Management Focus, and Global/Multi-Country Focus. The NEAT online tool also enables buy-side organizations to input their own weightings and tailor the RPO 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.

RPO provider PeopleScout recently held a client forum to discuss key recruitment themes, one of which was a discussion around Diversity and Inclusion (D&I) led by Dr. Arin Reeves. This focused on the importance of D&I, including the tendency for diverse groups to outperform non-diverse groups in solving problems, and how D&I can support the hiring process.

Tips on how D&I can support the hiring process included:

• Video interviewing – this is still valuable, and can actually reduce selection bias so long as interview guidelines/questions are issued beforehand
• Talent acquisition needs to be connected to talent development – every time there’s attrition, it makes it harder to retain others. Insist that talent acquisition is part of the onboarding process, including following up quickly with new hires after they have joined to make sure they are getting what they need
• Talent acquisition also needs to be part of the exit interview process to find out why people are leaving, and to feed data back to leadership for improvement opportunities, and to help talent acquisition teams in recruiting talent that is more likely to stay. Exit interviews are best conducted by third parties, as employees tend to be more honest and open regarding reasons for leaving than they would be with their own employer
• Talent acquisition teams should also conduct ‘stay’ interviews to find out why people remain with the company. This is helpful in determining how to improve employee engagement, and in turn helps with employer branding (see my earlier blog on Employer Branding: An essential Talent Management Strategy)
• The resume (CV) stage can be the most biased part of the process, as someone reviewing a resume may start to make judgments before having spoken to the candidate. Good practice includes simple actions such as taking notes separately during a candidate interview rather than annotating the resume
• Obviously, but importantly, don’t make hiring decisions until you see sufficient candidates. This can be a challenge, as RPO vendors try to put forward the best, but fewest, candidates for hiring managers to interview to help the business save time. Talent acquisition needs to be part of workforce planning with the business, and engage in discussions around the optimum number of candidates to be interviewed.

As part of NelsonHall’s recent RPO market analysis, interviews were conducted with clients of ~20 leading RPO vendors, which included a question on the vendors’ ability to ‘improve diversity of employees’. PeopleScout’s customer satisfaction score was 10% higher than the overall RPO industry average, which indicates that its focus on getting D&I right is paying off.

More widely, all RPO providers need to continue improving the diversity of their clients’ workforce. In our survey, clients rated the ‘future importance’ of diversity to be on average 18% higher than ‘current importance’.

In July, I will publish a blog on overall RPO client satisfaction, along with current and future importance in key areas such as diversity, quality of hire, and employer branding.

Yesterday, the people of the U.K. did what many thought unlikely, and voted the nation out of the European Union (EU). And while the wider political ramifications surrounding ‘Brexit’ start to unravel, what might be the impact on talent acquisition and the related outsourcing industry? 

It’s still unclear what kind of agreement Britain and the EU will negotiate post-Brexit, but the options are that Britain could become a virtual associate member (like Norway) and participate in the single market, pay budget dues and open its borders to EU workers, or it could choose a more drastic and estranged relationship, taking back full control of its borders and reducing the number of people who are able to come and work in the U.K.

Free movement is one of the most important principles of EU membership, allowing individuals from any EU country to live and work in another EU country without the need for a visa. And if the U.K. takes back control of its borders, this would mean the flow of individuals both into and out of the country would be limited to those who are able to obtain visas. 

U.K. skills shortage & the impact of border control

This is likely to impact U.K. companies and their ability to attract talent into the country. There are currently ~2 million EU nationals working in the U.K. (as referenced by the latest ONS statistical bulletin, U.K. Labour Market 2016), and U.K. companies are used to employing people from across the EU because of a lack of qualified talent with the skills and experience businesses need. By imposing restrictions on those wishing to move to the U.K., this could compound the issue and make it a less attractive prospect for the best talent to relocate there. An obvious consequence of closing its borders is that the U.K. would increase the number of jobs available to U.K. citizens, but what happens in industries where those skills simply don’t exist?

If the U.K. imposes visa restrictions, not only might the U.K. be a less attractive work destination, it could also restrict the freedom of movement of U.K. workers seeking opportunities abroad; this is at odds with the new world of work, with more and more workers wanting to travel, and wanting the ability to work from anywhere, any time. If the U.K. were to close its borders, it may put a premium on in-demand skills and will certainly cost businesses time and money in order to recruit and retain talent. There are some who also believe that foreign companies may scale back their operations in the U.K., and whilst this may have a negative impact on the jobs market, there is also the question of how many jobs this would create in the wake of the U.K.’s exit.

Considerations for talent acquisition teams

It is unlikely that we will see many changes immediately, as the U.K. will need to continue to abide by EU treaties and laws for at least the next two years. One thing is for sure: now that the U.K. has chosen to leave the EU, talent acquisition teams, whether in-house, outsourced, or even agency side, will need to watch the developments closely to understand the impact it’s likely to have on their working practices, their underlying processes, their pricing mechanisms, and their compliance responsibilities.

Those vendors in existing outsourced relationships will need to consider the cost implications to themselves and the client associated with recruiting and processing candidates on visas, the likely increase in time to hire, the impact on SLAs and any risk/reward pricing, and the additional complexity this may add to their recruitment process.

On the other hand, the U.K.’s exit could create opportunities for outsourcing companies to support new businesses who may not have the in-house skills and capabilities in sourcing, hiring and retaining staff, and also in upskilling and training existing employees to fill the skills gap. Companies may require additional support in managing recruitment processes that involve visa applications, and there will be opportunities for outsourcing vendors who provide L&D services to help with training and upskilling existing employees.  

Quite what the full implications of the vote to ‘Brexit’ are, no-one yet knows. The only certainty right now is uncertainty.

KellyOCG is the outsourcing and consulting group of Kelly Services Inc., and represents the largest growth segment of Kelly Services. In 2015, Kelly Services reported revenues of $5,518m, down 0.8% y/y (or up 4.7% in constant currency), while KellyOCG’s revenues were $674m, up ~15% y/y from $587m in 2014 and +16.6% in constant currency. KellyOCG’s operating profit in Q4 2015 was $14m, up 44.3% y/y, while gross profit was $48m, up 13.5% y/y. The largest profit and revenue growth came from MSP followed by RPO.

Within MSP, KellyOCG has 4,600 registered and active suppliers with $7.2bn total spend under management, which according to NelsonHall, puts KellyOCG among the top tier of global service providers. There are ~232 MSP clients across the Americas, EMEA and Asia Pacific with a 99% client retention rate.

KellyOCG has ~50 RPO clients, including ~14 new clients since January 2015, and in 2015 performed ~47,000 hires in the Americas, EMEA and Asia Pacific. Its longest running RPO client has been with them for ~20 years. A recent trend has been clients starting with project RPO for a specific number of hires and then, once benefits are realized, expanding into full RPO clients. 

Talent Management Consulting

KellyOCG began providing talent management consulting services in Q1 2015. Services are typically provided with RPO and MSP and include:

• Talent Strategy Advisory, which includes: Strategic Workforce Planning, Process Optimization, Business Care Development, Talent Strategy Alignment
• Talent Attraction and Engagement, which includes: Specialized Career Events, Employer Branding, Candidate Experience Measurement, Talent Community Management
• Workforce Governance and Execution, which includes: Program Structure & Governance, Market & Competitive Intelligence, Program Performance Management, Change Leadership
• Talent Counseling, which includes: Career Transition, Outplacement, Executive Coaching, Leadership Development
• Workforce Analytics, which includes: Labor Market Intelligence, Talent Supply Chain Analytics, Business Process Analytics, Predictive Analytics.

Talent Supply Chain (TSC) Analytics

KellyOCG’s TSC Analytics Portal helps to give clients insights to drive change, and focuses on:

• Rate analytics: providing insights on current spend and competitiveness by supplier, geography, and marketplace
• Supplier optimization: providing insights on supply chain attributes of time, cost, and quality
• Order efficiency: providing insights on cycle type, benchmarking on efficiency of the supply chain, and on risk due to aging orders
• Workforce planning: providing insights on percentage breakdown of workforce, trends, alignment to workforce plan, how sourcing aligns and compares, where changes can be made to optimize cost, and where talent pools can be implemented. This includes the ability to view attrition by region, country, state, client, vertical, etc. and also compare how a particular client compared to all other clients. Scatter diagrams can also be used to view tenure and attrition rates for FT and temp workers.

Predictive analytics are also provided, e.g. clients can predict when aging orders are going to cancel, and also predict cycle times, and recommend what can be done to improve performance.

Over the last year, KellyOCG has focused investment on delivering analytics to support its MSP offering and has recently deployed its offering across RPO and is now focused on enriching the data. New clients will have the toolset implemented within 3 to 6 months. All clients get the analytics portal included with the program and can do their own analysis or, if they prefer, can pay extra for help with analysis.

In Summary

In NelsonHall’s latest RPO Market Analysis published last week, we report that the key client drivers for RPO adoption include the ability to improve performance and meet business demands, and clients are looking for providers with broader talent management consulting capability and talent analytics for improved decision making. In this regard, KellyOCG is addressing the right client issues.

Future market needs will include more upfront strategic talent consulting and longer term workforce planning. Service offerings are expected to develop in the areas of consulting services, analytics, and assimilating labor market data, to support better planning and sourcing choices. Increasingly, RPO contracts will be bundled with consulting services as RPO clients expect higher quality and more value.

NelsonHall has just published a comprehensive global RPO Market Analysis report, plus associated RPO vendor profiles, including KellyOCG. For more details, contact Guy Saunders.

However, of all of this, I believe a key ingredient to Cielo’s success is its strong candidate focus, something that was highlighted on a tour of their Impression Center and Bridge Center.

Impression Center: A High Touch Candidate Experience

The purpose of the center is to ensure a high touch experience with the candidate and not tie up recruiter time (with a resulting 96% reduction in unnecessary calls to recruiters). Satisfaction is immediately evidenced upon entry to the center with a bulletin board displaying notices of candidate accolades relating to Cielo’s performance throughout the recruitment process. Scorecard data includes first call resolution of 96% and candidate satisfaction of 96%.

When candidates call into the Impression Center with an inquiry about a job opportunity with a specific client, they do not know they are speaking with Cielo. For example, Comcast has Cielo recruiters dedicated solely to candidates applying for Comcast jobs. Every client has a specific phone number which connects to Cielo recruiters trained on serving that client. Recruiters know who is calling and then log into the system for that account, prepared to answer the candidate question. On an average day there are 1,435 client interactions, of which 85% are calls, 13% are email and 2% are live chat. The high percentage of phone calls is an interesting and important statistic given that there is an upward industry trend in usage of live chat, but given the high touch and positive experience candidates have with Cielo recruiters, the vast majority would rather call than chat. The Impression Center is a service clients do not have to pay extra for and is a value-added service.

Bridge Center: Elevating Candidates’ Pre-Employment Experience

After a candidate is offered a job and accepts, there are pre-employment background and drug screens provided by the Bridge Center. Formerly, recruiters used to perform these screens but then would not have time to follow up with candidates on their status in a timely fashion. Now, upon being offered a job, each candidate gets a welcome call and email with an explanation of the process from the Bridge Center. Results include:

• 100% of new hires receive a welcome call
• 30% average reduction in time to clear
• 100% compliance with organization, local, state and federal regulations
• 98.6% of hiring managers surveyed agree that “my candidates’ pre-employment experience is elevated through their interactions with the Bridge Center”
• >50,000 candidates were processed through the Bridge Center in 2015.

The process has been so successful that Cielo has three standalone Bridge Center clients and three in the pipeline.

Per NelsonHall’s latest RPO research, clients’ top vendor selection criterion is recruitment capability, with expectations of high candidate engagement and satisfaction. Hence, it’s easy to understand why Cielo has been successful, growing revenue at ~25% CAAGR since 2011. Given its global expansion and its strong focus on candidates, including building and managing talent pools, I expect that Cielo will continue to have double-digit profitable growth.

On 23rd June, the people of the U.K. will have the opportunity to vote on whether or not to stay in the European Union (EU). But while the wider political debate surrounding a possible ‘Brexit’ rumbles on, what might be the impact on talent acquisition and the related outsourcing industry? 

It’s still unclear what kind of agreement Britain and the EU would negotiate post-Brexit, but the options are that Britain could become a virtual associate member (like Norway) and participate in the single market, pay budget dues and open its borders to EU workers, or it could choose a more drastic and estranged relationship, taking back full control of its borders and reducing the number of people who are able to come and work in the U.K.

Free movement is one of the most important principles of EU membership, allowing individuals from any EU country to live and work in another EU country without the need for a visa. And if the U.K. were to take back control of its borders, this would mean the flow of individuals both into and out of the country would be limited to those who are able to obtain visas. 

U.K. skills shortage & the impact of border control

This is likely to impact U.K. companies and their ability to attract talent into the country. There are currently ~2 million EU nationals working in the U.K. (as referenced by the latest ONS statistical bulletin, U.K. Labour Market 2016), and U.K. companies are actively seeking to employ people from across the EU because of a lack of qualified talent with the skills and experience businesses need. By imposing restrictions on those wishing to move to the U.K., this could compound the issue and make it a less attractive prospect for the best talent to relocate there. An obvious consequence of closing its borders is that the U.K. would increase the number of jobs available to U.K. citizens, but what happens in industries where those skills simply don’t exist?

If the U.K. leaves the EU and imposes visa restrictions, not only might the U.K. be a less attractive work destination, it could also restrict the freedom of movement of U.K. workers seeking opportunities abroad; this is at odds with the new world of work, with more and more workers wanting to travel, and wanting the ability to work from anywhere, any time. If the U.K. were to close its borders, it may put a premium on in-demand skills and will certainly cost businesses time and money in order to recruit and retain talent. There are some who also believe that foreign companies may scale back their operations in the U.K., and whilst this may have a negative impact on the jobs market, there is also the question of how many jobs this would create in the wake of an exit.

Considerations for talent acquisition teams

If the U.K. does decide to leave, it is unlikely that we will see many changes immediately, as the U.K. would need to continue to abide by EU treaties and laws for a minimum of two years following the decision. One thing is for sure: by choosing to leave the EU, talent acquisition teams, whether in-house, outsourced, or even agency side, will need to watch the developments closely to understand the impact it’s likely to have on their working practices, their underlying processes, their pricing mechanisms, and their compliance responsibilities.

Those vendors in existing outsourced relationships will need to consider the cost implications to themselves and the client associated with recruiting and processing candidates on visas, the likely increase in time to hire, the impact on SLAs and any risk/reward pricing, and the additional complexity this may add to their recruitment process.

On the other hand, an exit could create opportunities for outsourcing companies to support new businesses who may not have the in-house skills and capabilities in sourcing, hiring and retaining staff, and also in upskilling and training existing employees to fill the skills gap. Companies may require additional support in managing recruitment processes that involve visa applications, and there would be opportunities for outsourcing vendors who provide L&D services to help with training and upskilling existing employees.  

Quite what the full implications of a possible Brexit are, no-one knows. As with almost every aspect of the Brexit debate, the only certainty right now is uncertainty. 

Xerox focused on the importance of ensuring the right job fit for candidates. Aside from reducing recruiting time and improving retention, ensuring the right job fit is important from a cost perspective. Data revealed that the cost of a bad hire can be ~30% of an employee’s first year salary, and to replace an employee can cost ~150% of salary.

Ideally, companies should be using assessments to determine both job fit and cultural fit. However, only 30% of organizations use cultural fit questions when assessing candidates, which is surprising, as poor cultural fit is one of the top reasons why employees leave. It is important for candidates to know about the values of their prospective employer, their views on work-life balance, and so on.

An increasing number of companies have contracted to evaluate candidates prior to onboarding using Massive Open Online Courses (MOOCs) and ~75% of organizations using MOOCS say they have had a positive impact on hiring and recruiting. However, the downside of MOOCs is that completion rates are very low. Also popular are Small Private Online Courses (SPOCs), but whether companies use MOOCs, SPOCs, or other forms of candidate evaluation, the fact remains that companies can’t afford to make wrong hiring decisions. Allowing candidates to self-opt out of the application process during assessment is an effective way of enabling hiring managers to focus their time on more suitable candidates and improve quality of hire.

RPS and K4 presented data to further support the case that organizations need to hire the right talent the first time. The global workforce is aging, and more people are retiring: the median age of the workforce increased from 39.4 years in 2000 to 42.3 years in 2012. However, at the same time, tenure has decreased from 4.6 years in 2000 to 3.5 years in 2012, with millennial tenure at only 2.3 years.

While there were ~5.6 million unfilled American jobs at year-end 2015, 41% of organizations report that the labor pool does not meet their hiring needs. So, in addition to needing to hire the right talent, it is imperative to ensure an effective onboarding process to retain talent at the start. However, 30% of organizations rate their onboarding process as ineffective, and 54% rate onboarding as only somewhat effective. But for those organizations who rate onboarding as effective, 84% say best practices include instructor-led training, shadowing, and short-form content. In summary, effective learning starts at the very beginning of the employee life cycle with pre-employment, then progresses to onboarding, knowledge capture, and knowledge transfer.

Given the skill set shortages faced by many companies, there will need to be tighter linkage between recruiting and learning to ensure that any new hire skill gaps are addressed by immediate learning plans. I will look more closely at the connection between recruiting and learning in an upcoming blog.

Capita

In December 2015, Capita acquired the consultancy and resourcing operations of Work Group to strengthen its employer branding and employee engagement consulting capability. Earlier in 2015 Capita also acquired ThirtyThree to expand its recruitment services and employer brand consulting capability. Combined with Work Group, who have offices in the U.K., New York, and Hong Kong, Capita Resourcing will be able to expand its service offering to MNCs in North America and Asia. Initially the New York office will provide consulting services for employer branding, candidate communication and employee engagement. Growth plans in the short-term include sourcing services to include talent search and talent pipelining as well as locally delivered pre-employment screening services. In the medium-term, Capita plans to deliver RPO services from New York to clients with operations in North America. In addition, Capita recently established a sourcing operation in Krakow. Capita’s next target for global delivery expansion is Singapore, to serve clients in Asia Pacific along with Hong Kong. Via the acquisition of Work Group, Capita also acquired its candidate management and assessment business in Colchester, U.K. which is heavily focused on graduate recruitment.

Capita’s recent acquisitions expand its geographic capability and broaden and strengthen its service offerings. Capita will target U.K.-based MNCs, while emphasizing its focus on employer branding, employee engagement and the employee value proposition.

RTM

Upon completing its acquisition of Consort Group, Rethink Talent Management rebranded to RTM on February 10. In 2015, Consort Group was acquired to expand and strengthen RTM’s RPO and recruitment consulting capability, with services including:

• Employment branding and attraction
• Talent pooling and talent profiling
• Onboarding
• On-demand services
• Permanent and contingent hiring using RPO (the predominant model) and MSP.

The acquisition expanded and strengthened RTM’s RPO services, including in the financial services and retail sectors. RTM is now able to provide Consort’s RPO and talent management offerings to existing clients and vice versa. RTM had already been providing employer branding and MSP services, but Consort strengthens RTM’s offering, the primary focus of which will be on talent acquisition.

RTM is targeting U.K.-headquartered organizations with a global presence. RTM already has global contracts, including clients with employees in Canada and South Africa served from the U.K. and in Asia Pacific served from Melbourne and Singapore. RTM provides service employees onsite and also utilizes recruitment partners in its aforementioned hubs. European client locations, including Germany, are serviced from the U.K. and Ireland, specifically from its Dublin and Cork offices. Client locations in South America will be serviced via partners.

The above expansions and enhancements of service offerings are more important than ever as clients seek to attract the right talent for the right jobs, and with high retention rates. In addition, there continue to be more and more MNCs looking to expand RPO to additional countries. NelsonHall research shows that currently ~ 1/3 of all RPO contracts are multi-country, and we forecast this to increase to ~ 50% within four years. We also expect further vendor consolidation and partnerships, as providers continue to strengthen their service delivery and geographic capability.

• TrueBlue’s acquisition of Aon Hewitt’s RPO business
• The completion of the merger between Pontoon and its sister company, hyphen
• Orion International’s acquisition of Novotus

TrueBlue acquires Aon Hewitt’s RPO business

TrueBlue, via its PeopleScout RPO business, acquired Aon Hewitt’s RPO business and also announced a broader, ongoing relationship to connect PeopleScout’s recruiting services with Aon Hewitt’s assessment, employee engagement and analytics talent services. Prior to the acquisition, PeopleScout had ~1.5k employees and local presence in 14 countries across North America, Europe and Asia Pacific. It provides services to ~70 countries for ~60 RPO clients, six of which have >10k hires per annum each.

The acquisition expands PeopleScout’s global delivery capabilities, and brings in 650 Aon Hewitt employees based in the U.S., Canada, Asia Pacific, and Europe. In 2014 Aon Hewitt provided RPO services to ~100 clients across 64 countries, supporting nine languages.

In NelsonHall’s 2015 RPO market analysis, PeopleScout was ranked 9th globally by revenue, with Aon Hewitt ranked 5th in global standalone RPO revenues (4th including RPO as part of MPHRO contracts). NelsonHall is in the process of conducting its seventh global RPO market analysis, but even based on 2014 revenue estimates, the combined company would have been ranked number one.

Though not an acquisition of Aon Hewitt’s selection and assessment business, via the broader relationship, PeopleScout will have access to Aon Hewitt’s strengths including in:

• Specialists in selection and assessment, with ~125 employees, including ~30 I/O psychologists, involved in the development, management and administration of tests and assessments
• Aon Hewitt’s proprietary pre-employment assessments and platform, used to assess ~10m candidates annually covering sixteen languages and five continents: North America, South America, Europe, Asia and Africa.

Pontoon and hyphen merger completes

Pontoon and its sister company hyphen completed the merger first announced in October 2015, with hyphen's ~300 U.K. employees joining Pontoon's workforce. The combined brands will operate under the Pontoon name. Pontoon is now the global HR outsourcing brand for Adecco Group. 

The merger consolidates Adecco’s MSP and RPO providers into a single business unit with ~ 1,500 employees, and 150 clients operating in 92 countries. Hyphen, headquartered in London, also has offices in Singapore and Sydney. Pontoon opened its Manila office in 2012, and leverages Krakow as a nearshore center for European languages. Pontoon RPO delivers services to 40 countries in 20 languages and plans to expand across countries in Latin America.

In NelsonHall’s 2015 RPO market analysis, Pontoon was ranked 10th in North America and 5th in Continental Europe. In our 2015 MSP market analysis, Pontoon was ranked 3rd in 2014 global MSP spend under management, 3rd in North America, 2nd in EMEA, 2nd in APAC and 1st in Latin America.

Though NelsonHall had not previously estimated hyphen’s revenues separately, hyphen strengthens the Pontoon brand. Prior MSP contract awards included  Bank of America, Merrill Lynch, Experian, Tesco, Credit Suisse, Lloyds Banking Group, Jaguar Landrover, Prudential and National Grid. Prior RPO contract awards included CGI.

We previously noted that hyphen’s MSP brand in the U.K. competes with the Pontoon brand, with a lack of business alignment, but the merger of the two companies will eliminate the internal competition. In addition, hyphen’s local presence in London, Poland, Singapore and Sydney will strengthen Pontoon’s geographical reach to provide both single-country and multi-country contracts for clients. Multi-country contracts represent ~36% of all RPO contracts, with 6% being global contracts covering three or more regions, and NelsonHall estimates multi-country contracts will represent ~50% of all contracts by 2019. Global MSP contracts account for ~15% of the market, as significant contract expansions and global awards were undertaken in 2014; with another 22% of the market representing multi-region or multi-country contracts. NelsonHall estimates Global MSP contracts will increase in importance and will account for 25% of spend under management by 2019, with another 25% of the market taking the form of multi-region or multi-country contracts.

Orion International acquires Novotus

The third M&A deal in January was Orion International (a specialist in U.S. military recruiter) acquiring Novotus, a provider of RPO and recruiting services. The acquisition will see Novotus leveraging Orion’s sales team and providing a military recruiting offering to its customers, and Orion leveraging Novotus’ RPO capability.

Orion International is headquartered in North Carolina and has five other regional offices in the U.S. Based in Austin, Texas, Novotus expanded to Houston in 2013 to accommodate growth. Houston is used to service RPO, sourcing services, temporary staffing and contingency services along with executive search services.

In the last few years, RPO providers have increasingly focused their recruiting efforts to include military veterans, a subject I’ll be looking at in a future blog.

By properly reflecting a company’s image and what it is like to work for, higher quality talent will be attracted and be more likely to stay. Bad hiring decisions can be attributed in part to improper alignment of potential candidates and organizational values and culture, which often results in high employee turnover. However, if an employer’s brand is in alignment with what a candidate is seeking, employee turnover can be reduced by ~2/3, saving time and money from the cost of re-hiring, lost productivity, and potentially lost revenue.

Employer branding enables recruiters to attract talent since it makes it easier to approach candidates. Organizations with a best-in-class employer brand will experience better responsiveness to emails, application rates, confirmation of interviews, acceptance of offers, and employee referrals – all contributing towards improved talent attraction and retention.

Organizations can take several steps to improve their employer brand, including surveying and hosting focus groups of recent graduates, candidates, and recent hires to find out why they are looking at certain companies. This could delve into the recruitment process itself, including the onboarding process. Internal surveys can be conducted to understand why top performers stay and what is key to keeping them. Customer surveys can help drive what consumers think about the brand versus competitors. Organizations can also analyze data to gain insight into website effectiveness and traffic: how candidates link to the career website, how many pages are viewed, and when candidates opt out. 

WilsonHCG recently published 2015’s Fortune 500 Top 100 Employment Brands. Criteria I thought noteworthy included employee reviews and candidate experience, which deservedly were given a higher weighting this year. Candidate experience was measured objectively through the use of Glassdoor and Indeed’s company ratings data. Recruitment marketing, including use of talent communities, was also an important criteria used, among several others.

NelsonHall estimates that in 2015 ~60% of RPO contracts will include employer branding. WilsonHCG is one of the RPO providers offering employment branding services including assessment, design, delivery, management of the employment brand, and measurement of its effectiveness. Client-branded satisfaction surveys of hiring managers and candidates are conducted, including survey creation, distribution and analysis. WilsonHCG’s employment brand practice enables its recruiters to more closely align candidates with company culture during the recruiting process.

RPO vendors help to convey employer branding through the marketing of recruitment campaigns, including campus recruiting and communicating the brand in advertising. Employer branding is an opportunity for organizations to identify and promote their employee value proposition through social media, search engines, networking sites, and the company’s own employment and career sections.

Recruiters align their strategy with the company’s employee value proposition when speaking with candidates, and can provide answers to why they would want to work for their organization based on company values, culture, career path, compensation, and benefits. And RPO vendors help with high-touch responsiveness to all candidates, something that many companies are not good at.

NelsonHall RPO research reveals that employer branded career sites are the third top sourcing channel, behind employee referrals and LinkedIn. The ability to provide broader HR services, including talent management services and employer branding, is one of the top drivers of RPO. And developing a talent pool and improving a client’s employer brand are top critical success factors for a successful RPO engagement.

Contributing to the bottom line… the impact of increased focus on employer branding will be the ability to attract the right talent who will then be engaged, leading to increased employee satisfaction, customer satisfaction, productivity, sales, and reduced attrition. This leads to ever-important cost savings for the company, which is something the business continually asks HR to contribute towards. 

• Sourcing
• Recruiting
• Selection & Assessment
• Administration
• Onboarding.

During the last few years vendors have added additional capability focused on helping clients improve their talent management capability, including:

• Talent strategy/planning
• Employer branding
• Internal recruitment/mobility
• Post onboarding, including:
  • New hire/employee engagement
  • New hire & hiring manager satisfaction
  • Retention, including employee surveys & exit interviews
• Creation of talent pools and talent communities.

And some providers, though not all, have added career transition services to their portfolio. The latest example is Randstad recently acquiring California-based RiseSmart, who provide career transition services to employees impacted by restructuring, downsizing, and M&As. RiseSmart has a cloud-based technology that supports mobile and utilizes social networks. This is combined with one-on-one coaching to help transitioning employees identify job opportunities, network with professional contacts and develop and promote themselves. RiseSmart claims to be able to accelerate the time to place transitioning employees 60% faster than the national average.

Other recruitment providers that have added career transition services to their portfolio include Adecco via Lee Hecht Harrison, ManpowerGroup via Right Management, KellyOCG via The Ayers Group, Allegis Global Solutions including via its Talent2 acquisition, Futurestep including via Korn/Ferry, and Cielo.

Career transition services are a logical extension to RPO. And by helping transitioning employees to find a new job, companies can also greatly improve their employer brand by demonstrating their willingness to take care of their people, whether it be candidates, new hires, experienced hires, those getting ready to leave the business, or retirees. According to Career Builder, before applying to work for a company, prospective candidates, including millennials, will look at 18 different sources of data on their potential next employer. Companies with a reputation for looking after their people to the point of helping with future career transitions will be considered more favorably.

The portal has the ability to propose the optimal number of suppliers for a job category, based on supply chain modelling that has identified correlations between the number of suppliers and cycle time. Using predictive analytics, the system indicates where additional suppliers are needed in the case of long cycle times; similarly, it can identify areas where it may be better to reduce the number of suppliers, to help cut cycle times.

The tool is available to KellyOCG’s clients as well as suppliers. Clients (and MSP service teams) can:

• See employment demographics, including hires by job category and by country
• Assess wage differentials of employees and contractors as well as the average service years for each, as well as looking for outliers. This enables metrics to be set to (for example) help convert a proportion of contingent workers to full employees where they have been in the company more than a certain number of years. One client was able to convert 10% of its contingent workers, saving the company $11m per year
• Perform rate analytics and see benchmark data for a job category –  the data feeds that are used to build benchmarks include PeopleTicker, Kelly Services, and EMSI (Economic Modelling Specialists), and the KellyOCG practice.

Suppliers can see what share of a job category they are currently supplying and compare their performance to the benchmark of suppliers in that category, such as average cycle times. Hence, the tool is designed to motivate suppliers.

The KellyOCG analytics team is resourced with labor economists and statisticians. Its vision is that suppliers will send KellyOCG full benchmark data, which in turn can be used to help attract recruiters and encourage clients to use those suppliers.

The technology has been in development over the last two years and is now rolled out to all of its MSP clients, delivering on average 25% productivity improvement by the operations manager.

The KellyOCG Talent Supply Chain Management results are easy to view via the portal, and underpinning the reporting are:

• A KellyOCG proprietary methodology based on the defined supply chain methodology known as SCOR (Supply Chain Operational Reference), GTSC Model 2.3, which has been further developed over the last 12 months to incorporate inputs, activities, and outputs; build in lead times; and look at process levers and metrics through each of the phases of the talent supply chain
• A newly launched talent management consulting team to support companies looking to conduct strategic talent reviews. The team has built a standardized methodology to assist companies in defining and executing talent strategies.

With only ~13% of organizations having strategic workforce planning functions, tools like this are likely to attract attention in the world of HR and procurement. And KellyOCG is one of the first MSP providers to offer an online analytics tool for suppliers, clients and MSP service agents alike.

Over the coming year, NelsonHall expects KellyOCG to build and refine more SOW structures in their analytics to facilitate greater insights in SOW workings. KellyOCG is seeing a 300% pipeline growth in SOW activity, mostly in EMEA, as it gains momentum in a market that is less than a couple of years old.

Overall, based on NelsonHall’s 2014 MSP report, the growth in the global market was expected to be ~16% CAGR until 2018, with ~60% of this market representing a vendor neutral model. As visibility of supplier spend increases, and benefits become more visible through analytics tools like the one offered by KellyOCG, a greater market uptick can be expected in coming years.

However, an effective EVP can go even further. In a candidate-driven world, where talent shortages are clearly visible for hard-to-fill roles, EVP should also look at future career options and the company’s broader employment offering to maximize an individual’s ability to grow and develop in that organization. Companies don’t hire for life anymore; however, having candidates who stay less than three years because they don’t see clear options ahead and are being enticed away by competitors is disruptive and costly.  

How can this be better managed?

As recruiters get more attuned to the EVP and career development options of candidates, it makes sense that discussions that take place at the beginning of the candidate’s engagement should be maintained and developed during the employment lifecycle.  For example, wouldn’t it be nice if, when a vacancy appears, the hiring manager can see a list of potential employees who are interested in an internal transfer and given the opportunity to pick from this list, before necessarily hiring from outside?  Shouldn’t all companies be doing this more?

It is logical that recruitment and talent acquisition should morph into wider talent management services, and by ongoing engagement with the talent pool, recruiters should be encouraging passive candidates to consider the question “where next for me?” Over the last year, RPO organizations have been recognizing the importance of wider talent strategies to address workforce management and retention issues by building their talent consulting services. For example:

• WilsonHCG, through its acquisition of Sumner Grace in March 2015, added talent strategy and design, HR transformation and workforce planning capability
• Cielo launched a talent consulting organization in November 2014, which includes leadership and talent program design
• Futurestep launched its Futurestep Pathways solution in July 2014, offering organizations a platform to help employees manage their next internal career move, whereby recruiters can contact employees to facilitate transfers
• Alexander Mann Solutions acquired Talent Collective in February 2014, enhancing its consulting capability in talent acquisition.

Another area that can help strengthen the corporate brand is continued engagement with an organization’s retiree population; for example, leveraging their abilities to help coach and develop staff as they navigate their careers. KellyOCG is an example of an RPO provider who offers this service.

And, over the next few years, we can expect ongoing career discussions and ‘check-ins’ with employees to be a growing part of RPO companies’ service offering.

Key to success in getting more out of recruitment services, and going beyond EVP, will be a willingness to invest in this broader approach that allows career planning to become a networked discussion across talent pools and recruiters.

Vendors are making moves to improve their HCM delivery to address these and other issues, and in 2015 the race is on to make HCM systems fully cloud-based, global, compliant, and futureproof.

There are three types of vendors in the HCM cloud market competing to convince buyers that they are best placed to deliver on this goal. They are:

• New-to-market HCM vendors (e.g. Workday)
• Traditional HCM vendors (e.g. Oracle, SuccessFactors/SAP)
• Heritage payroll vendors who have invested recently in HCM offerings.

Let’s take a quick look at each in turn and evaluate their chances in the race for the cloud. 

New-to-market HCM vendors

New-to-market HCM vendors have the advantage of going straight to the cloud for end-to-end processing, potentially stealing a march on more traditional vendors who rely on client-server technology stacks to support the payroll piece.

However, new-to-market vendors still have to prove that they can deliver true out of the box multi-country capability without the need for teams to create localized fields and validations at country level.

Not having payrolls in key country markets will disadvantage these vendors as legislation changes often impact data fields shared by payroll and wider HR. Not having visibility across both will impede the ability to respond to new legislation. As a result, new-to-market HCM vendors are starting to drive payroll into their products as they strive to deliver integrated HR/payroll cloud capability supporting as many countries as possible, and hence to provide the agility to support changing legislative needs.

Currently, Workday only supports payroll in the U.S. and Canada, but it will soon be live with a U.K. payroll and it also plans to develop a French payroll.

Traditional HCM vendors

Traditional HCM vendors, supporting large client bases, are rolling out cloud technologies typically overlaid on client-server payroll architecture, and in some cases are building new cloud payrolls. These vendors take ownership of compliance for cloud-HR as well as the payroll systems, and can support compliance in up to 28 countries (in the case of SuccessFactors/SAP) – a larger number of countries than the new-to-market HCM vendors, and five countries more than it supported just 12 months ago. SuccessFactors/SAP is moving fast, and is expected to add another four payroll countries, taking the number to 32 by the end of 2015. (As a comparison, SAP’s underlying client-server system, SAP ECC 6.0, supported a total of 55 country versions with another 41 provided by partners).

The traditional HCM vendors lagged behind the new-to-market HCM vendors in launching a cloud-HR product, and hence need to build credibility rapidly, delivering exceptional customer service to maintain and attract clients. These vendors will also need to reinvent their brand to change market perceptions. 2014 saw much of this, and it will need to accelerate in 2015.

Heritage payroll vendors

As a result of growing demand to move to cloud and the advantages of having payroll embedded to support compliance needs, there has been a growing number of payroll vendors investing in developing their own HCM cloud. These vendors, including ADP, Ceridian, NGA HR, Raet, Ramco, SD Worx, and Talent2, can take ownership of global compliance for HR and payroll in a larger number of countries (up to ~100), more than both the traditional HCM vendors and the new-to-market HCM vendors.

This group faces the challenge of becoming more innovative in HCM talent product design, not traditionally its core strength. Product design, understanding talent requirements, and having strong process leaders to support modern design methods (e.g. embedding SMAC into talent processes) is where these vendors have struggled. This can be mitigated through talent acquisition, and though attracting talent process specialists to join a payroll company is not easy, it is nonetheless a priority objective for this group of vendors.

Summary

Who will the winners be? All the vendors competing in the HCM cloud space share common challenges in building fully compliant and futureproof offerings, and none of them can afford to cut corners when it comes to key matters such as localization and breadth of language support. However, each of the three vendor groups face their own unique challenges.

It remains to be seen how the new-to-market HCM vendors will fare in driving payroll into their products, how well the traditional HCM vendors will do in rebranding and attracting new customers, and how effective the heritage payroll vendors will be in adding the necessary HCM talent design capability to their offerings.

NelsonHall believes that getting country payrolls right first is essential to success. It is also important, when it comes to compliance, that vendors move with speed, not haste, if they are to be successful.

The role of payroll in cloud-HR will be the subject of a major new market analysis report due for publication in Q2 2015.

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

Last week Randstad Sourceright held its first analyst event. Services covered included MSP, independent contractor solutions, technology, RPO, employer branding, veterans hiring initiatives, and career transition services.

My focus here is primarily on Randstad Sourceright's RPO activity.

RPO in High Gear

In 2014 YTD Randstad Sourceright has secured high double-digit RPO contracts, of which one third were project-based and two thirds were multi-year contracts. Several contracts are global, including a global engineering client headquartered in NY, for whom Randstad Sourceright performs recruiting in 50 countries.

In addition to obtaining new clients Randstad Sourceright has been expanding its relationships with existing clients by a stronger focus on account management.

Randstad Sourceright highlighted:

• Its efficiency and standardization with an increased shared vision approach with its clients
• Its differentiators such as CoEs in areas such as strategic sourcing and recruiting, employer branding and social media, diversity & inclusion, talent identification & assessment, technology, reporting & analytics
• Its flexibility, including its ability to scale quickly and its virtual approach (described below)
• The quality and loyalty of its employees, with just a single digit attrition rate. Approximately 80% of the entire RPO workforce is virtual, enabling reduced real estate costs. Recruiters also keep engaged by participating in a Google+ community, where they can share both work and home-related information (described further below under candidate engagement).

Business priorities include:

• Being responsive to increased demand for globalization
• Leveraging the Randstad organization, in geographic reach and for significant peaks
• Investments in technology and its CoEs
• Strong executive support

In addition to the above, I attribute Randstad Sourceright’s success to an increased focus on employer branding and candidate engagement.

The employer branding portfolio has standard service offering and separate consulting services. All new clients now receive the standard offering as part of implementation. By Q2 2015, Randstad Sourceright will roll-out its standard offering to all incumbent clients.

Candidate engagement: all recruiters must be certified in Randstad Sourceright’s total talent sourcing methodology. When new recruiters join, they must pass three levels of certification within 120 days. The most advanced, Level 3, includes advanced diversity sourcing, more in-depth military sourcing, how to build customer search engines, natural language search, etc.

In addition there is a community for recruiters to join on Google+. Members share best practices and strategies that have worked. There are also videos explaining “how tos”, plus a global sourcing call on Google Hangout to talk about what recruiters are struggling with and to obtain help.

Randstad Sourceright appears to be building momentum under its new President of RPO.

Nine out of 10 companies in the U.S. already utilize some form of social media in their recruiting while two-thirds of job seekers are using social media to search for jobs. According to JobVite in 2013, 92% of recruiters made a hire through LinkedIn. LinkedIn is the top platform used, followed by Facebook, then closely followed by Twitter, which is growing in usage at the fastest rate. 

An example of an RPO vendor using social recruiting is Seven Step RPO. A well-known American motorcycle manufacturer came to Seven Step RPO for help filling 500 open positions, of which ~85% were hard to fill. There weren’t many qualified local candidates and the company had no established talent community, nor a formal social recruiting program. Seven Step RPO needed to develop a sourcing approach that protected and leveraged the client’s strong employment brand. The result was Seven Step RPO growing the company’s new talent community to ~80,000 engaged candidates. Over half became repeat visitors and applied for multiple jobs. Overall, ~10% of all hires came from the talent community, more than any sourced by the major job boards, search engines, or industry networks/affiliations.

Other examples of vendors using social media include:

• In 2011, SourceRight Solutions launched Talent Communities to help organizations create a talent pipeline via a web-based social network. In 2013, Randstad Sourceright created innovation centers to develop employment branding, mobile and social media assessment processes and tools. One of the services is social media 360-degree assessment, which evaluates clients’ presence across social media outlets, and identifies and prioritizes opportunities to expand and strengthen branding reach
• In 2013, ADP launched the ADP Recruiting Management platform, which includes mobile and social media capabilities to enhance the talent acquisition process. The platform includes:
  • Social and mobile tools to enable targeted communication and talent community creation, helping to build an employer’s brand, expand candidate reach and boost interaction and engagement
  • Sourcing capabilities that provide access to active and passive candidates through integrated résumé databases, social networking sites, and automated deep-web searches

Use of social media is also being specifically stated in RPO contracts, for example:

• Accenture was awarded an RPO contract by NXP Semiconductors N.V. to include managing all aspects of NXP’s recruitment in Asia Pacific and Europe, including sourcing, attracting and hiring. Services provided include analytics, gamification and social media techniques
• Aon Hewitt was awarded an RPO contract by a North American packaging and recycling company that included building talent communities utilizing social media to support sourcing

Due to its low cost and wide candidate reach, I believe we will soon see social recruiting used by all clients. However, depending on type of company and job – and this is one of ManpowerGroup Solutions’ top branding tips – it is important to understand the candidate to know what technology and social media networks they use. Then deliver on it!

NelsonHall’s Q1 market analysis reveals that 56% of RPO contracts now include Employer Branding. This is such an important service that all RPO vendors now offer it. NelsonHall has been covering RPO for eight years, and we’ve seen its growth from 53% of vendors offering Employer Branding in 2007, to 88% in 2009, to 100% in 2014.

One of the sessions I attended at HR Tech was a joint presentation by ADP RPO and their client AstraZeneca, for whom ADP performs 7,000 annual hires across all positions in the company. Terry Terhark, President of ADP Talent Acquisition Solutions presented on its RPO partnership with AstraZeneca while Lisa Smith-Strother, former Global Employer Brand Recruitment Director at AstraZeneca, presented on Employer Branding. 

AstraZeneca’s Employment Value Proposition (EVP) and touch points maximized to enhance Employer Branding include:

• Vision and mission: Providing news, leader appointments, capabilities, etc.
• User Experience: Career site with job search information giving a positive candidate experience across all channels, including social media
• Recognition: Highlight employer of choice awards and other recognitions to create a perception of the company
• Values: Use of employee videos and social media to give a peek into values, culture and career path to assess fit
• Core EVP: Defining what it expects from its employees, the preferred behaviors and the type of people that are most likely to thrive
• Company Personality: includes Employer Brand, culture and corporate responsibility; who we are and our main themes

In support of its partnership with ADP, AstraZeneca is doing brand ambassador training for the ADP RPO team. Within AstraZeneca, Employer Brand leaders are becoming more consultative, providing guidance to HR and business leaders.

ADP RPO supports AstraZeneca Employer Branding in several ways including:

• Promoting opportunities through passive candidate pipelining
• E-marketing campaigns to keep candidates abreast of AstraZeneca activities
• Incorporated talent communities building candidate relationships prior to openings existing
• SourcePoint technology, used to build branding to candidates

Why is Employer Branding so important? By improving and properly reflecting the company’s image and what it is like to work for, quality of hire will be improved by attracting and retaining the right talent for the company. For example, research conducted by Cone Millennial Cause group found that 80% of a sample of 1,800 13-25 year olds wanted to work for a company that cares about how it impacts and contributes to society and ~50% would not work for an irresponsible corporation. By 2020, Millennials will make up 50% of the workforce.

The Employer Brand International 2014 Employer Branding Trends Study shows that the top media used by companies to enhance their Employer Brand are:

• Social media 58%
• Career website 56%
• Recruitment advertising/employer marketing 52%
• Recruitment branding 45%
• Induction program 42%

The impact of increased focus on Employer Branding will be improved employee engagement and satisfaction, leading to reduced attrition for a bottom line cost savings to the company. Expect to see Employer Branding increase and be included in ~60% of RPO contracts by 2015.

Many RPO providers are assisting their clients by using talent communities to help them have a talent pipeline for any future hiring needs. NelsonHall research indicates that around 10% of new RPO offerings include talent communities.

Let’s look at a few examples:

Allegis Global Solutions (AGS) presented a webinar this week on “How to Grow, Maintain and Engage Your Talent Community”. AGS uses talent communities of passive and active candidates for both direct hiring opportunities and referrals. AGS has an internal social network to show what the company is like to work for that the talent community is able to tap into. Members of the community are then engaged via mobile and email communication. Results for one client included an 18% decrease in time-to-fill.

The use by RPO providers of talent communities has been around for over three years. Early movers included:

KellyOCG: in April 2011 launched in Germany Talent Relationship Management (TRM), a communication plan to develop and manage a network of high quality potential candidates and alumni, for any future hiring needs. TRM has since been deployed across the Americas and APAC.

Randstad Sourceright: launched Talent Communities in June 2011 (was SourceRight Solutions at the time). Features include:

• Creating a talent pool of qualified and interested candidates via job feeds
• Promoting the company's culture and employment value proposition via broadcast of company news, facilitated forums and networking groups, discussions between candidates and recruiters
• Creating an Alumni Talent Community for referrals and rehiring talent that can be productive quickly
• Engagement of community members via message boards, videos, chat, IM, event calendars, libraries containing documents and videos.

Alexander Mann Solutions: in July 2011 launched Source Cloud, for creating talent pools of active and passive candidates across geographies. Source Cloud is both a standalone service and part of AMS' RPO service offering.

ADP RPO (formerly The RightThing): launched Talent Community Builder, also in July 2011, for the recruitment of passive candidates. Talent Community Builder uses links that are put on targeted recruiting media enabling recruiters to capture contact information and resumes. In September 2013 ADP launched the ADP Recruiting Management platform, which uses social and mobile tools for targeted communications and talent community creation, helping to build an employer’s brand, expand candidate reach and boost interaction and engagement. For one client, Zimmer, one of the top vendor selection criteria was recruiting capability, including development of talent pools.

Aon Hewitt: was winning RPO contracts in 2012 (e.g., with a North American packaging and recycling company) that included building talent communities.

More recently, Futurestep announced in 2013 that it is building talent communities in all its RPO contracts. Examples include one with BNY Mellon where Futurestep is building a talent community in support of its mission to increase its sales force by 50%.

Cielo’s talent community includes email campaigning with active and passive candidates. This messaging includes familiarizing candidates with potential hiring company announcements; e.g. “Did you happen to know we were named one of the best places to work four years in a row?” Email campaigning has resulted in a two-to-three times increase in passive candidate responses.

At ManpowerGroup Solutions, talent pools are also now a standard offering. Talent pools are used for purposes including support in initiatives such as setting up a new center or for hard to fill positions.

Expect to see over the next few years more widespread awareness by large and even mid-sized organizations of the importance of having talent communities. And this, of course, is another factor that will help drive the continued growth of RPO. 

• RPO businesses: PeopleScout (U.S based) and HRX (Australian based) serving international customers
• ​Contingent workforce and MSP offerings: Staff Management | SMX business 
• Admission services to colleges and universities: StudentScout.

The acquisition will make TrueBlue one of the the largest industrial staffing firm in the U.S. The transaction is expected to be completed in Q3 2014. TrueBlue's pro forma 2013 revenue is expected to increase by $600m to approximately $2.3bn.

The announcement represents a significant service expansion for TrueBlue. The staffing services of TrueBlue will be enhanced through RPO and MSP services provided by SeatonCorp. SeatonCorp only recently went through a major geographical expansion through its acquisition in February 2014 when it acquired HRX, an RPO comany with presence in Australia and New Zealand. The combined Seaton RPO practice comprises ~1,500 employees supporting RPO clients across 68 countries. Expanding globally through acquisition was natural progression.  

A close alignment between the companies in the nature of the businesses is evident. TrueBlue principally support non-management roles; this aligns well to the SeatonCorp's profile where 55% of all permanent hires in its RPO practice are for non-managment. Working in the similar sectors of  airline, financial services, retail, manufacturing, and transportation of the SeatonCorp business complements TrueBlue's staffing focus in the industries of construction, manufacturing, transportation, aviation, waste, hospitality, retail, and renewable energy industries.

Staffing capabilities are increasingly being enhanced by other RPO/MSP providers who look to broaden sourcing approaches, as competition for finding talent is ever increasing.

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.

The RPO tool is available to NelsonHall clients here and is also available for a limited period free-of-charge to strategic sourcing managers.

The tool covers a number of RPO business situations including organizations seeking candidate attraction, talent management, multi-country RPO, and full service RPO.

Suppliers of RPO covered by this NelsonHall Vendor Evaluation and Assessment Tool (NEAT) include Alexander Mann Solutions (AMS); AllegisTalent2; Futurestep, a Korn Ferry company; Hudson; KellyOCG; Kenexa, an IBM company; ManpowerGroup Solutions; PeopleScout; Pinstripe & Ochre House; The RightThing, an ADP company; WilsonHCG; Yoh.

The NEAT (NelsonHall Vendor Evaluation & Assessment) tool for RPO, part of NelsonHall’s “speed-to-source” initiative, 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
• 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. 

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