Article: What HR service providers need to focus on?

#The Now & The Next

What HR service providers need to focus on?

The HR buyer today is looking for solutions that can be integrated and implemented, and which streamline the delivery of the internal HR services
What HR service providers need to focus on?
 

Service providers need to change and evolve with the aim to support talent strategy within Organizations & to accelerate business results

 

At the very outset, today the HR business is about addressing the next generation delivery. It is estimated that about 50 per cent of the HR buyers are actively seeking technology and that the buyer behavior is constantly being driven by SaaS market trends. It is clear that in the backdrop of rapidly evolving market trends, the HR buyer needs today revolve around a seamless integration, effective implementation and maximized return on investment of the product/service bought. However, the HR Service Provider market is fragmented which has enabled only a handful of large players to operate, while smaller players who may in fact have a better product/service are sidelined. But this is changing fast. According to Anuranjita Kumar of Citi Bank, “The traditional way of working in HR is set to get redefined as services are being defined.” The principal needs of the business continue to be cost efficiency and the ability to measure effectiveness. A total of 84 percent of the buyers we surveyed listed the inability to measure effectiveness and the lack of metrics to arrive at it as the first of the top five concerns. The cost of products and services was the second concern that a total of 76 percent of the buyers surveyed listed. When we asked the buyers as to which HR service areas saw the highest rate of adoption, the following were noted: Hiring from Recruitment Consultants (91 per cent), Training Programs (84 per cent), Leadership Assessments (62 per cent), Assessment Products for Hiring (52 per cent) and Coaching Services (48 per cent).

Challenges outlined by buyers

Even as the marketplace for products and services is increasingly focused on becoming globally standardized, one of the key challenges with respect to the products and services space is the lack of customization, “service providers offer similar products or services and there is an opportunity for increased differentiation in terms of skill and expertise” says Anju Sethi, Tesco. Companies need service providers to not just come up with ready solutions but also be willing to take the time to listen to a company’s problem and research and understand a company’s business needs. “Service providers need to change and evolve with the aim to support talent strategy within organizations. The products/services need to accelerate business results” says Raj Raghavan, Amazon. While the lack of customization is a problem on one end of the spectrum, “on the other extreme are trainers who promise to do whatever the  customer wants and also spend a lot of time in assessing our needs but in the end don’t actually match expectations” says Madhu Raghunath, TVS.  While there is no single method at addressing problems of customization, according to one respondent the current ratio of success with respect to standardization vs. customization stands at 80:20.

A repeated point of emphasis in the study was that in the Indian context, companies are not incentivized to look at ways they can improve the process from a cost perspective. As companies grow and scale operations, increasing emphasis on developing process metrics is capable of pushing the fairly transactional marketplace into one that is based on long-term partnership. Another problem that was highlighted in the India HR Industry Study 2015 was that most service providers in the consulting space are tempted to work in all areas of specialties even if they do not have the required expertise —this is further fragmenting the market place.

Opportunities

Although buyers are looking at end-to-end product delivery services, they are also willing to engage with young innovative startups in areas that meet their business needs and focus on delivering a great user experience. Identifying areas where company needs and business value come together is crucial to any service provider. In the assessment market for example, while there are a range of products geared towards leadership, the only other area where assessments are most popular are at the hiring level. This leaves many organizations with no assessment products to tackle competencies at the middle management level.  Such gaps can be better identified when there is an exchange of talent between the vendor and buyer community. Sunder Ramachandran, Pfizer notes that “Senior HR leaders are more likely to take up jobs in well known companies rather than join service providers, it is important therefore for the vendor community to make themselves an attractive place for talent.” 

Employee experience A black box for growth

Raj Raghavan, Country HR Leader, Amazon India

Hire’, ‘Keep’ and ‘Grow’ are the words we should remember when it comes to HR leadership for a growing business. This said, attracting, retaining and growing talent, at all levels, to meet the organic and inorganic growth is always a challenge if not planned well. In my mind, hiring people is relatively an easier part of solving the puzzle; keeping them engaged, getting the best out of them, making sure they get a sense of growth and providing a great environment to work in are the difficult parts. Today, I can see four generations working under one roof. And in my mind most companies are challenged to create an employee experience that appeal to these individuals with diversity and preferences. 

While many companies are using external partners for various HR processes, service providers need to change and evolve with the aim to support talent strategy within organizations. The products/services need to accelerate business results. However, a lot of such services do not incorporate predictability and measurability of ROI. The same applies for outsourcing as well. So, it will be foolish on an organization’s part to outsource everything. At the same time, they cannot run 100 percent in-house either. So the balance needs to be found by each company, as the perfect recipe will vary from organization to organization. However, when it comes to HR admin processes like attendance and payroll, they are easy targets to be outsourced to an external vendor.

Create a meaningful & productive work environment 

Sunder Ramachandran, Head of Sales Training, Pfizer 

When we look at learning and development there are three broad trends one is seeing, businesses today are impatient with the prevailing metrics on the number of hours spent on programs. The emphasis of modern learning is on video, mobile and the cloud. There are also open source platforms that learning departments are using instead of starting from scratch. The trend of using analytics has shifted to reporting on training and proficiency. 

The biggest challenge in the talent space has to do with the shelf life of talent. Not every employee is keen on working for an organization for a long time; the challenge then is to make the time spent productive and meaningful. Another challenge from the vendor’s side has been that most of the off the shelf products and solutions are not customized to the client’s needs. Today, there is a whole spectrum of products and solutions are available due to advances in technology. Innovation is being driven by new and young startups that are willing to listen to your problems and are hungry for growth. There also exists an area of opportunity in bridging the talent gap between the buyer and vendor community. Senior HR leaders are more likely to take up jobs in well known companies rather than join service providers, it is important therefore for the vendor community to make themselves an attractive place for talent. 

Identify opportunities for long term value creation

Judhajit Das, Chief of HR, ICICI Prudential Life Insurance

ICICI Prudential Life believes in building talent internally and hence the focus is on hiring for attitude and motivation fit. There is a need to offer a long-term career based on employer value proposition of fairness, meritocracy, learning & growth and providing a supportive environment. At ICICI, the internal HR shared services model allows for transaction processing and the endeavor is to simplify processes and offer self-service options through automation wherever possible for a seamless, reliable and consistent employee experience. External service providers are used where we don’t wish to build internal capability or where we see advantages in terms of quality and efficiency. Our preference is to have long-term relationships with providers aligned to our values and economic interests. There is a significant opportunity for service providers to step-up and strengthen the partnership model by identifying opportunities for long term value creation by improving process efficiencies and technology adoption for positively impacting the quality of employee experience. 

We have adopted mobility devices (tablets) for our field salesforce for ease of customer acquisition and enhanced customer service. Our endeavor has always been to provide superior employee experience by offering the entire suite of employee self-service options and platform for learning solutions and social collaboration tools at the workplace on the tablet platform.

Need to reassess traditional approaches

Anju sethi, Head – Recruitment and L&D, Tesco

The principal talent challenge for those in HR has mostly been similar. How do you find the best talent? How can you assess, interview and inspire candidates to work with your organization? While employer branding plays an important role in influencing the candidate’s decision to join, what is vital is how well the organization articulates the opportunity. With constantly evolving skill and work expectations, we also need to revisit and reassess our interviewing approaches and techniques. When it comes to attrition, it is important to engage line managers to establish a culture of trust. 

Also, the expectation from vendors is to help identify the right pool of talent. There is more which the education system in the country can do to prepare candidates to face the job market effectively. Herein lies an opportunity for the service providers to enable students to be groomed in communication skills and in instilling courage and accountability. Currently, service providers offer similar products or services and there is an opportunity for increased differentiation in terms of skill and expertise. By engaging with the service providers, we can help improve how the quality of hires can get better. More so, we see an increasingly number of young startup companies bringing great ideas to the market place and engaging to solve business problems. This is a refreshing and welcome change. 

Increasing Demand for integrated solutions 

Raj nehru, HR Professional; Governing Council Member, Global Village Foundation & Director HARTRON

India has more than 65 per cent of the working population under the age of 35, however, according to statistics, on an average only 25 per cent resources are actually capable of being used by the market for various jobs. While the government is working at managing this challenge, employers also need to reflect and revisit some of their HR practices that can strengthen the organizational capabilities in a more sustainable manner. 

The HR industry is seen to be moving towards the digital space, however, the integration of digital technologies is missing. This is a major gap that HR service providers need to plug. HR today needs to ensure that it creates an internal ecosystem at the enterprise level that builds and feeds forward new talent to the business through technologically-enabled that shorten the learning cycle of the talent.

Even hiring and engaging employees need to be technologically enabled that can predict the potential stickability, attitude and performance of new hires. HR service providers need to redesign integrated solutions to cater to customers and businesses who are looking to transition to one-stop solution as they seek to reduce the number of transactions with various HR stakeholders. The trend of start-ups that are giving a big boost to technologically-enabled products and solutions is going to nurture new solutions and cheaper costs, and is a great opportunity for HR service providers to take advantage and innovate. 

Customize services to meet buyer demand

Madhavi Lall, MD, Head - HR, India, Deutsche Bank

Hiring is a highly time-intensive exercise and finding the right talent for a skill and culture fit becomes a challenging task. Therefore, large companies today are really looking at services like Recruitment Process Outsourcing (RPOs) so that the manpower requirements are met quickly. Service providers in this regard have come to play a crucial role.

HR service providers have evolved a lot in the past few years. Today, India is seeing a huge rise in the number of HR start-ups as well. These start-ups are really seeking to understand what the business needs are and catering to those needs through customized products/services. They have become highly flexible and mature. Once an agreement is closed with the vendors or partners for HR services, they are usually successful in meeting the buyer demand today. The service providers and vendors are now customizing their products to meet buyer requirements in a meaningful and efficient way.  

Deutsche Bank continues to partner with global service provides because of their ability to provide services/products across the region. This is mainly because the focus for the company is to find a global solution rather than an India-specific solution. This helps the service providers to partner through ease of implementation across the franchise. Further, this is beneficial to the company because they are already in sync with the organization’s environment. 

Topics: The Now & The Next, HR Industry, HR Consulting, HR Outsourcing, HR Analytics

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