You’ve dedicated your career to helping executives transform their businesses for greater effectiveness. Tell me what you’ve done to prepare for your current role.
I've come at this from two different directions - understanding the outsourcing world and also understanding the role associations play in growing an industry. I’ve spent a lot of time in and around non-profits and associations and became very fascinated with the phenomenon of bringing people together to collaborate. Peter Drucker once said that associations are some of the most effective organizations in the world because they have to work on a very limited budget, but have almost unlimited access to talent through their membership. I’ve used my knowledge of associations to bring people together to work on different issues to help accelerate the growth and transformation of HR transformation and outsourcing.
In addition to being very active in the world of associations as a member of ASAE (American Society of Association Executives) and the Center for Association Leadership, and in various roles I’ve played in other associations, I’ve gotten to experience what its like to be a volunteer member, a volunteer leader, as well as a staff executive. As an example, I currently serve as the President of the GW Alumni Association.Because I’ve served in different capacities, I have a certain empathy for what it’s like to be a member as well as what it’s like to be a staff professional. Hopefully that makes me a better leader and allows me to connect with our members.
HROA is the definitive support organization for people who purchase, provide or participate in HR transformation and outsourcing. What are your aspirations for the association?
The association is constantly helping to lead the practice of HR outsourcing and transformation by bringing together the very best minds in this area. Our aspiration is to act as an accelerant for the growth and maturation of the industry.
Industries tend to develop at a certain pace but you need a certain infrastructure - standards, practices and other things – that really help to make an industry take off and go from something that is artisanal to something that has industrial strength. And that's what we hope to do. We’re working on helping to create common standards and practices, something which doesn't exist today in HR outsourcing and HR services, generally. I may call it employee onboarding, you call it employee matriculation and you might include seven steps and I might include 25 steps. So how do I know what you're saying is the some thing as I'm saying? That's the kind of things we're working on – to create common standards and practices so that when a vendor is pricing something and making certain claims about their services, a buyer can compare those against other claims and have an apples-to-apples comparison.
We published our first HROA Recommended Practices early in 2008 and will continue adding to that body of knowledge throughout 2009 and beyond.
What’s different now versus when the association started?
A lot of things have changed in terms of how we as an association operate and how the industry works. We've gone from being a loose confederation of companies to a real standard-setting industry association. That has had its own impact on the market and has created some clarity and structure that wasn't there before.
Also, the things people are buying and transforming has changed. We've gone from an almost exclusive focus on multi-process HRO to more focused engagements with single processes like recruitment, benefits, and learning. And, as an association, we have adapted to and in many cases helped lead these changes. For example, we were out there early on with RPO and helped bring together the people who are most active in that area and created special interest groups for that part of the market.
According to Everest Research, EU business accounted for 36 percent of all contracts signed during the first quarter of last year. Is outsourcing more advanced in Europe than US?
I think there's been a constant exchange of ideas across the Atlantic. I would never say that one was more advanced than the other. They're just different.
The way that HR outsourcing evolved in the US is you had a lot of these early multi-process mega deals, some of which worked well, and some that needed remediation, and we learned a lot along the way. European companies, on the other hand, always tended to take a more blended approach with shared services still being a strong part of the core of what they do. They have taken a very deliberate approach to looking at different processes, governance models, structures, and contract forms and have picked what works well in their unique environment. And that is flowing back to the US as well. American companies are learning a lot from what their European counterparts done and adapting that for what works in the US.
The thing you have to remember when you try to compare the US with Europe is that you can't. In the US, there is some variation from state to state in HR practices, regulations, and laws, but not a tremendous amount. Whereas in Europe, even though you do have the European Union and some standards across borders, you still have to face tremendous differences in culture from country to country, tremendous differences in language and some significant differences in employment law. So, when you're looking at trying to do something on the scale of a multinational deployment, it is a much different thing in the European environment than trying to do a multi-state or even nationwide deployment in the US.
What’s on the horizon for 2009?
In terms of outsourcing, 2008 has been the year of assessment where people have taken a breath and are sort of figuring out what's important, what works and what doesn't. Going forward, because of the economy, I think we’ll see a very big emphasis on outsourcing as a way of cutting costs and changing the nature of how HR and outsourcing positively impact the balance sheet.
I think we’ll also see a bigger emphasis on an off-the-shelf-approach to outsourcing. Before it was a lot of custom multi-process outsourcing relationships where each individual deployment was different. In 2009, you'll see a lot of providers coming out with offerings that have standard technologies, standard systems, and standard processes and those will sort themselves into different hierarchies; some people will want a bespoke model, some will want the high end option, and some will want an economy priced version.
If you go back and look at what people bought with their outsourcing relationships over the last few years, they were really buying cost avoidance. They either needed to go through a major technology upgrade or were trying to get a capability that they didn't have to remain competitive. In 2009 it will be about actual cost reduction – taking cost out of the system – and to do that and do that quickly, people will need to be buying things that are more economical from the beginning. This model has been embraced by companies who are serving the mid-market companies. Right now, outsourcing services really work well for small companies and for large companies, and there's a vast underserved majority in the middle. So that’s what I think we’ll see - more of those size companies taking advantage of standardized outsourcing services and with both small and large companies following suit.
With the upcoming inauguration, your hometown is gearing up for an influx of visitors. What are your favorite hot spots in the DC area?
A favorite of mine is the Town and Country Bar, which is located in the Mayflower Hotel. It is a renowned hot spot for watching political figures. J. Edgar Hoover used to take his lunch there everyday - cottage cheese and chicken noodle soup at the corner table. This hot spot is also frequented by Karl Rove and members of the Bush family as well as the incoming Obama administration. Another favorite restaurant is Charlie Palmer's Steak house. It is right across from the US Capitol and has a beautiful view of the Capitol grounds. It would be a great place to watch the inauguration as well as Founding Farmers, which is just three blocks west of The White House.