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HRO Handbook 2011 A 10 Infocity, Sector 34, Gurgaon, Haryana 12200 E: [email protected] T: +91 124 4782581 F: +91 124 4273762 Bengaluru Delhi Gurgaon Hyderabad Mumbai www.peoplestrong.com HR Transformation The HR Shared Services Way Report Structure ‘What’ of HRO Section 1 • Summary 3-6 • Trends & Focus 2012 Industry Speak Section 2 7-18 Ref: PeopleStrong HR Roundtables The ‘How’ of HRO Section 3 • The HR Shared Services Way 19-30 • Ready Reckoner • HR on Cloud India Way by ‘Everest’ Section 4 31-37 Dispelling Some Common Myths on HRO Delivery Model & Section 5 Impact by PeopleStrong 39-43 Foreword We are happy to bring to you this edition of the HR Transformation series. The world today has become really flat, and an impact in one corner can surely put the globe off balance. As we go through highly volatile economic conditions, it has become almost mandatory for businesses to proactively catch on the signs of change and consequently push for a more rigorous approach to transformation. Most of the HR Leaders across the world have a changed strategy which is the cause of the business impact they are creating. This impact is largely an outcome of two forces - Changing Business Metrics and Changing Workforce Trends. Section 1 Both of the above immediately impact the way HR gets delivered in the organization and how HR equity is perceived within the organization. The vital sharing of the Board Room by the HR Leadership is just one indicator out of many. Another fundamental shift is the new HR Delivery Structure, with a confluence of Business CoEs and Delivery CoEs through HR Shared Services. The key objective that we intend to discuss in these series is the building of HR Shared Services to drive the change in HR delivery. This edition brings to you the views of the India HR leadership on ‘What’ of HRO Transformation, which was shared in two roundtables. Also, Industry experts Everest Consulting share their views on the HR Outsourcing Industry at large. • Summary As we go through a wave of consolidation in the Indian economy, HR Shared Services acts as a great leverage in building consistency and efficiency in HR operational processes, together with a great • Trends & Focus 2012 employee experience, where an employee sitting anywhere in India goes through a consistent experience of employee delight. Governance, Scale and Building Predictability in Business - are the top three key drivers that today compel us to move to Shared Services. Cost is one of the key factors. It, however, is not the only factor. There is a 10%-40% cost advantage that the organization benefits from over a 3-4 year horizon. HRSSC also provides the necessary 'mindshare' and 'heart-share' to the HR teams to spend time on truly value added activities and not only on just pure transactions. There is a release in 30% to 40% of the bandwidth of the HR teams, allowing them to focus more on the Business. Via these series, PeopleStrong endeavors to demystify HR Shared Services, paving the way to create further benchmarks and an evolved roadmap in businesses. For any input or suggestion to make it even better please reach out to me at [email protected] Happy reading! Shelly Singh Co-founder & EVP 2 HR Outsourcing Industry Summary 2012 - The way forward Human Resources Outsourcing predictions for 2012 • Beyond cost-reduction focused considerations, buyers will The past ten years have been an epic journey of partnership between companies seek to capture more strategic value in their HR outsourcing initiatives outsourcing HR and for the providers of those services. Both have endured Overall HRO significant challenges in their laborious endeavors in findingformulae that worked. • The appeal of a platform and SaaS-based HRO offering will In the end, the struggles yielded two important truths: predictions increase • After years of technology implementations and process improvement efforts, • Beyond MPHRO, global sourcing will increasingly become a most HR functions still are far from becoming operationally efficient. key component within SPHRO as well • The benefits of HR outsourcing will not be fully realized without at least some degree of functional transformation, such as process optimization, role redesign or other service delivery improvements. • A testing year for the comprehensive MPHRO model; As we enter the second decade of HRO, it is clear that outsourcing is here to stay: It improved decision making environment will help market has become a critical component of a cost-effective delivery strategy. By building reach US$3.1 billion in annualized spend outsourcing efforts upon the above truths, HR will be better prepared to navigate Multi-process • The end-of-term cycle will play an important role in the the challenges of implementation and create a model for improved operational HRO (MPHRO) market evolution as deals worth US$2.7 billion will come up effectiveness. for renewal in 2011 With the pressure on back-office support and service delivery amplifying, there is • Service providers not finding success within MCPO will look no doubt that HR departments are also amplifying their focus on transitioning their to focus on SPHRO area(s) to drive growth activities to high value service offerings. The need to slash transaction costs and minimize time-inefficient activities, while developing an engaged workforce led by transformational leadership, has become the heart of this year's agenda. • The recruitment process outsourcing (RPO) market will continue to see higher growth and a more robust global RPO solution will emerge • The growth in the benefits administration outsourcing (BAO) Single-process will be driven by the Health & Welfare area HRO (SPHRO) • Multi-national companies will accelerate their initiatives around multi-country payroll outsourcing (MCPO) • After the lean period of the last two years, the learning services outsourcing (LSO) market will see recovery but st a slower pace 4 5 2012 - The Focus Areas In 2012, we are turning the spotlight on to two key focus areas: • Strategic implementation to align with business goals • Driving value-added initiatives and evaluating cost reduction methods to stretch ROI • Drawing the end-to-end roadmap to implement the concept of 'HR functions aligned to business goals' successfully Section 2 • Cutting administrative tasks to deliver HR's value proposition to the rest of the business • Standardizing processes globally to reduce errors and deliver uniform services • Enhancing employee self-service to reduce workload and channel efforts to value-add activities Industry Speak • Advancing and improving HR processes, functions and delivery by focusing on opportunities to be a profit generating centre Ref: PeopleStrong HR Roundtables • Understanding what the business sees as high value • Leveraging on advanced technology to improve functionality & service delivery • Enhancing employee engagement to optimize retention of high performers • Evaluating the most effective charge-back structure • Doing MORE with LESS 6 1st Roundtable In today's HR scenarios, we have met a lot of clients and had a discussion with them about the best HR To unravel the riddle and to find out the 'microprocessor' inside the HR function, which is enabling practices. Many people asked us that there are so many conferences and seminars to discuss how to the HR engine to drive the organization, we have picked up multiple threads: implement best practices in Human Resources however, not enough debates & discussions • Experience and priority in different industries happening on - what HR really want to do? • Designing a HR transformation roadmap So, PeopleStrong came up with the predominant idea of organizing Roundtable, where a small and • Harmonizing HR policies and compliance with the HR Service Delivery model closed group of CXOs & HR Heads from the industry have an exclusive discussion on how to • Global trends of HR Transformation : Shared Services, Automation, Outsourcing transform HR functions. • Implementing an effective model to roll-out HR technology and process changes • Enabling an efficient, agile recruitment engine and reducing recruiting costs 1st Roundtable • Measurement : C-Sat, productivity gains The complex and rapidly changing business dynamics continue to pose a challenge before The 1st Roundtable was organized in Mumbai on 28th April, 2011. We discussed about - what are the organizations to transform themselves and adapt to the new realities. While HR transformation is key ingredients in HR function which helps an organization to grow, succeed and transforming HR also a consequence of such dynamics, the benefits of transforming the way talent is hired, managed from a support function to strategic function. and utilized is emerging to be a strategic differentiator in it. Many CEOs are revisiting their entire HR Transformation: What’s inside? people strategy as a result of the changing business scenario. The strategies that helped companies succeed during the downturn will not be applicable anymore. Progressive organizations will focus Excerpt of the first roundtable published in People Matters on rethinking and restructuring the HR function to align with the company's growth ambitions. This HR becoming the strategic business partner; "entering the board room"; has been the key focus areas makes HR transformation a necessity for organizations to prepare themselves for the next wave of for almost a decade now for all HR Leaders. However, there are several ways to do the same: can it be growth. “The moment HR can commit to output, business will accept HR as a partner because the done by thought leadership, effective succession planning, leadership building and so on and so value they bring to the table is business critical,” says Pankaj Bansal, Co-Founder and CEO, forth? PeopleStrong. However, the entire strategic part of HR keeps struggling to crack the secret of efficiently and Changing talent demographics and the availability of talent is also impacting the way companies are effectively transforming the HR processes to achieve this shift.