As the recession gives way to recovery, employers need to focus on retention strategies to keep their top performers engaged at work. IDC Analyst Lisa Rowan shares why it’s more critical than ever to think about talent management and recommends vendors be more optimistic in their messaging.
Economic uncertainty prevails, but analysts (yourself included!) have indicated a possible rebound in 2010. What should our readers be planning for and thinking about for next year and beyond to ensure success?
I'm very hopeful of a rebound. I think and hope that we have bottomed out, but when it does rebound, I don't think we'll see a lot of immediate hiring. Looking back to the aftermath of 9/11, which wasn’t so much an economic dip as it was a crisis of confidence, we had a fairly quick rebound. It's going to take longer this time. There's not going to be a lot of job creation.
One thing I suspect is that when jobs start to open up a little more there is going to be a lot of people changing jobs. I think there is latent passive job seeking going on and a certain level of dissatisfaction has arisen. Employers have made pretty drastic cuts and people are doing the work of several people and they may not believe that things were communicated as well as they should have. So, I believe there is going to be a lot of movement once movement is something that is available to people.
What are the priorities for HR departments during these challenging economic times and what talent strategies should they put in place? For service providers, what skills and capabilities do they need to gain market share?
HR departments need to be prepared that employee movement is likely to happen. Although it's a bit like closing the barn door after the horse is gone, they should be reaching out, doing more communication, and putting whatever steps in place they can for retention. That is going to become critical.
Another element of that is a lot of people have gone without raises. One of the things we talk about when we talk about talent management and some of the technologies that are enabling talent management is getting insight into who are the top performers in the organization. If they haven't already done so it’s a good time to do that now so that if the employer is allowed to do some selective incentive pay that they know who they need to target in order not to put the organization at risk to lose those people.
When things open back up again it's going to be the most employable people that have opportunities. We haven't seen a lot of rebounding yet but we anticipate there will be more towards the end of this year and in 2010 there is this window of opportunity for employers to really do some work to identify who the top performers are and try to stabilize employee satisfaction and engagement. They might even want to do some surveywork within their employee base.
For vendors, they've been doing pretty well through these difficult times. The HR buyers have been able to do a good job maintaining whatever projects they spun up prior to the difficulties we're in now. What they can do to help HR prepare for what might be coming is fine tune some of their messaging. If you look at the slate of webinars that are available to watch, they’re still talking about what's going on in difficult times. Maybe it's time to say let’s look at what we can do once we recover and start messaging along the lines of the optimistic perspective.
The other thing that has remained important and continues to be important throughout all of this (and this is true for vendors of anything related to HR) is having a clear eye toward compliance and helping their buyers stay compliant. That can be anything from having an even handed approach to how you compensate people to keeping an eye on making sure you're in compliance around your recruiting strategies.
What new innovations are available in outsourcing? Beyond cost-cutting, why should organizations consider outsourced services?
It's interesting to talk about innovation and outsourcing in the same sentence because HR outsourcing and payroll outsourcing is very old and mature. ADP has been offering payroll outsourcing for more than 50 years and for Ceridian it's even longer. It's difficult in some respects to have innovation in a market that's so mature.
In terms of what’s new, NorthgateArinso recently announced a platform they will be supporting clients on for outsourcing that is based on the SAP platform. What's different about it is they have taken SAP and enabled it for Software-as-a-Service (SaaS). That's very interesting because if we look at the broader HR outsourcing market to encompass BPO, one of the difficulties has been that the providers there in a lot of cases have not been able to do a very good job of standardizing the way that they deliver services from a technology perspective.
If you have large employer that has an SAP, Oracleor PeopleSoft installation, they have been as different as snowflakes. It is very hard to get economies of scale when you are supporting so many different versions and implementation styles of a single platform. When you look at what NorthgateArinso has done, they have established a platform that they will be putting multiple clients on so that they will have those economies of scale.
The difficult sell there is that the buyer is going to have to be much more flexible about doing things differently from a platform perspective than they have been potentially in the past. However it could clearly benefit a lot of buyers and enable them to standardize on that and cut costs by having an effective deployment and use of technology.
ACS has come out with a similar type of offering but on the Oracle product. It is a platform to which buyers will need to move but it is an industry standard platform.
What are key considerations when selecting a vendor?
It depends on whether you're looking at outsourcing a single process versus a broader set of processes to a single vendor. When you're looking at a single process, if you chose payroll or benefits, and you wanted to outsource that independently of other HR functions, then you have to be looking for an organization that has a strong track record and has a name in the market and that you are fairly certain they will stay in that market. It's easier when you're looking at a single function. If you look at Hewitt for benefits or ADP or Ceridian for payroll, they've been doing it for more than 40 years. It gets more difficult when you are thinking of doing a fuller HR BPOengagement because there's less of a track record that the vendor is going to be in the business for the long haul. That's something the buyer needs to be aware of and needs to be relatively well assured that the vendor intends to stay in the market and continue to make investment in their presence in that market.
Another thing that buyers tend to want to look at regardless of whether it's outsourcing a single process or more than one process is finding buyers like themselves that are already working with that vendor. One piece of research IDC has done several times over the years is asking buyers what is most important to them. For mid-sized companies, it is always important the vendor has experience in their industry.
One thing I will mention is that the number one reason that folks are outsourcing is to cut costs and no matter how you slice that pie that fact remains. I don't see that changing any time soon. I like to think to a certain degree it's the best use of a buyer's resources. Do you really want your HR staff or even part of your accounting team worrying about payroll? The administrative functions associated with HR aren’t a core competency of most organizations. Doing the policy setting and the actual work associated with talent management should be retained and in most cases is retained. The only possible exception in the talent management space would be Recruitment Process Outsourcing. I've read a lot of articles and talked with some providers in that space that are doing well right now and one of the reasons is that recruiting departments have been scaled back. In order to even do the maintaining of recruiting that is ongoing, albeit it slower than what it is normally, they are still finding it is helpful to outsource a big part of that. So, the vendors in that space are benefiting from that trend.
I understand you were an art major in college and have a deep love of the arts. What style of art is your favorite and why?
Painting is still my personal favorite thing to do of all the things I did in the arts. My favorite style has always been the impressionist period including the artists Monet, Degas, Renoir, etc. One of my fondest travel memories is of going to Paris. I was lucky enough to go to the Muséee d’Orsay. France put a lot if not most of their really treasured impressionist art into that one museum. I remember coming upon Degas' ballerina sculpture and saying I can't believe I'm seeing this in person. I went there in the morning and time got away from me. I was there the whole day. It was that amazing.
One of my other loves is the theater and I've gotten involved with Community Theater for the last 12 years doing scenic design. I will do the backdrop for a show and that's been a lot of fun for me. I won an award for the Eastern Massachusetts Community Group for a backdrop I did for the show The Laramie Project, which is the Matthew Shepard story, painting the mountains of Laramie, Wyoming.