After attending HR Tech in Paris this week, it became apparent just how much the HRO market is changing. This change has started to happen across the board: service and tech providers, buyers and (even some!) analysts are starting to identify and adapt to the new era of HRO—as HR “Intelligent Operations.”
Having personally had experience in different areas of BPO, it’s been extremely interesting to look at HRO with a fresh pair of eyes. So, given that it’s Friday I’m going to condense my takeaways down to the following points:
- The move to the cloud is not the end point: In HfS’s Eight-Ideals of the As-a-Service Economy, the starting point for organizations in the As-a-Service journey is Overcoming Legacy. It’s important to realize that this is indeed the starting point and not the end goal. I hear all too often from buyers that they go through all the pain of implementing a cloud HCM system and then end up with the same functionality and using the same processes they had with their legacy system. This should be the organization’s first steps in transforming their HR function, so partnering with a provider that recognizes this and will take you on that journey is crucial.
- OneOffice is alive and well in HRO: Having previously covered the contact center space, I’m noting the increasing parallels between the front office customer experience and HR. What I will say though is that HR is five steps behind the front office, but we all knew that, right? The increasing focus on the employee experience can be directly compared to the focus on customer experience we saw starting in the noughties in contact centers. The increasing use of digital employee engagement through mobile and social looks very similar, although very much less mature, to the frantic race for digitization of the front office. Essentially what we are seeing in HR is more of the consumerization we’ve identified in the front office.
- Outcomes, outcomes, outcomes! And more OneOffice: Keeping to the OneOffice theme is the increasing focus on business outcomes through HR optimization. In my point above I mentioned employee engagement. While this is an important endeavor it, in itself, is an HR metric and should be viewed as such. Rather the focus should be on improving real business outcomes such as reducing product development cycle times, increasing revenue and improving margins. These business outcomes are influenced by numerous factors including HR, and metrics like employee engagement are a means to drive that, but employee engagement is not the end goal. It is important to note that employees are also customers, and alienating these customers through abysmal hiring practices and sub-standard HR functions seems counterproductive.
- HR conversations are moving out of the director’s office and into the c-suite: With business outcomes been the goal of HR, HR now needs a seat at the c-suite and a an active voice on the relevance of digital. Cloud, analytics, and automation cannot be effective in enabling business objectives if they are implemented in a tick-box fashion due to a directive from above, with no real sense of what impact it will have. Therefore the c-suite firstly needs to realize the impact HR can and does have on business outcomes and then endorse the strategic changes to HR functions that are needed.
So this is my take on the changing shape of the HR market coming out of a week of conversations at HR Tech and findings over the last few years. Furthermore, I want to introduce the idea of the OneHR concept (more to come) where typically siloed aspects of the HR value chain (hiring, talent management, benefits admin, learning, payroll) are continuing to merge into a unified HR experience for the employee. This is taking place within the technology realm but has some way to go from a services standpoint. Like I said, more to follow.