Post on 29-Jun-2015
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NGA Human Resources interviewed
Michael Custers, VP Marketing, to have
his thoughts on the past and future
evolution of (global) HR outsourcing:
What were the major developments
in 2013 for global HRO?
At NGA we have witnessed 4 major
trends for global HR outsourcing in 2013.
First and foremost, cloud has become
the platform of choice for HRO. At this
point, this is still happening under a
variety of names and labels, such as
cloudsourcing, platform-based HRO, or
BPaaS (Business Process as a Service)
but we expect the industry to converge
around one or two key terms in 2014.
In the past year, we have seen cloud
HR platforms such as Workday and
SuccessFactors EmployeeCentral be
adopted as underpinnings for core HR
and payroll BPO offerings. We expect to
see this trend continue and HRO
providers will continue to 'wrap' BPO
services around these SaaS offerings,
varying between 'thin' and 'thick' layers
of business support and analyst services.
These 'BPO service wrappers' will be
further refined over 2014 and can range
from user adoption and compliance
helpdesk, over 'test and release'
services, all the way to driving process
execution in talent management,
providing analytical insight across
functions and deep HR process
expertise.
Secondly, we have seen HR outsourcing
providers get really smart with process
automation, driving efficiency and
compliance based on software 'robots',
powering HR service centers and HR
solution landscapes. Smart automation
tools built on top of cloud-based HR
platforms have helped drive down
manual back-office labor significantly.
In the front office we have seen HR Call
Centers evolve to full-blown multi-
channel HR Service Centers, offering a
wide range of global (HR) business
services delivered through a variety of
channels, between chat, email, social
and collaborative platforms and - only
when necessary - still over the phone.
Thirdly and specifically on the global
playing field, we have seen payroll BPO
and RPO stand up as the main drivers
(some would say survivors) of HR
outsourcing. Benefits outsourcing
remains largely focused on select
markets, such as the US, whereas
growth in learning BPO is mainly driven
by regulatory requirements in specific
vertical industries, leaving RPO and
payroll BPO as the dominant and
growing forms of HR outsourcing.
Lastly, we expect to see HR outsourcing
to fit into a wider Global Business
The Evolution of HR Outsourcing: Trends for 2014
Just as any other business department, HR is in constant evolution. Both
internal and external changes have a major impact on the role HR has to play
within the company. HR is clearly shifting from an operational department
to a more strategic and pro-active business partner, while actions and results
must be measured and costs be controlled. To improve HR efficiency and
agility while minimizing administrative burdens and costs, HR departments
increasingly rely on HR outsourcing.
Services ecosystem, especially in view
of the two trends described above. This
trend to Global Business Services builds
on demand for further standardization
of services, globalization and continued
cost efficiencies. We have seen buyers
mature very quickly in their thinking
about organizing, sourcing and
delivering business services, and
smartly combining in-house business
services with select outsourced services.
As a result, we have seen HRO become
part of services ecosystems in
co-existence with shared services.
How and in what ways are these
changes going to reflect in 2014?
We expect all 4 trends of 2013 to further
mature in 2014, with strong adoption of
cloud technology and a strong shift of
core HR technologies. We also expect
SaaS to drive wider adoption of HR
outsourcing as organizations get more
comfortable with how to deal with data
privacy and security, and consider HRO
a perfect way to hand off increasingly
complex compliance regulations. In that
regard, we consider SaaS an
accelerator and a transformative force
rather than a threat to HRO.
In 2014, we expect big data to start
making an impact on HRO. We've seen
a lot of buzz and talk about big data in
2013, but few mature offerings or
implementations have seen the light of
day. For big data in HR, 2013 has been
relatively quiet driven by the realization
that getting 'small data' right is a first
and necessary requirement to get 'big
data' going. The focus on core HR will
help lay the foundation for a solid big
data strategy in HR in global
organizations.
What will be the top 5 trends for
HRO in 2014?
As SaaS adoption matures and further
spreads, we expect the 'as a Service'
paradigm to widen. As such, we expect
Talent Management as a Service to
become a model which helps answer
the effectiveness question of many
talent management processes, by
driving process excellence, execution
discipline and technology adoption.
TMaaS can help remove the execution
problems around for instance
performance management, by
simplifying processes, bringing talent
business analysts who drive the
execution of a performance cycle, and
provide insight into the results of talent
assessment.
With the continued adoption of SaaS
platforms we also expect to see
'Integration as a Service' on the rise.
To date there isn't a single stack of
cloud technology which covers all HR
processes, so organizations will have to
integrate different systems. More
systems and more data means more
and more complex interfaces. SaaS
technology providers have standardized
many integration gateways in the form of
APIs and Certified Packaged
Integrations. We expect service
providers to build offerings to help
enable secure and solid application
integration.
Automation is expected to be a
continued trend, with software removing
the need for manual work. This trend will
also impact the offshoring and
nearshoring trend, as automation will
make HR service delivery less
dependent on the location of where work
is performed.
Finally, we believe the trends for
globalization and standardization will
continue, with a requirement for truly
global HR services, rather than local or
regional solutions. SaaS is an important
accelerator for both as it allows for a
rapid and uniform roll-out of HR systems
and processes around the globe.
How are the demand supply
dynamics going to impact the
segment? How are changing
expectations on the buyer side going
to affect the industry?
Buyers will continue to look for cost
efficiencies through BPO. In addition, we
expect ever-increasing regulation and
compliance requirements to be a key
driving for payroll BPO as organizations
struggle to keep up with a changing
regulatory framework.
How are HRO service providers like
NGA gearing up for the change?
The entry barriers to HR outsourcing are
relatively high at this point. If you don't
have access to a global service delivery
network, with strong nearshore and
offshore capabilities, it will be very
difficult to enter the market. In addition,
HRO providers need to get their arms
around a very different way of
implementing and configuring systems,
between the old OnPremise
'implementation' world and the new
cloud-based 'configuration' game. At
NGA, we have been implementing multi-
tenant cloud-based systems for the last
5 years which helps us tremendously in
adopting new, efficient methodologies
such as interrogatory configuration for
cloud-based systems.
Across verticals, where do you see a
significant hike in demand coming
from? What reasons? (indicating
approx. investments)
In line with previous years, we continue
to see both the financial and
pharmaceutical industries as strong
drivers of HRO. Both industries are very
global in nature, facing a strong
regulatory framework and compliance
rules, and mature enough to adopt
standards-based HR processes.
What geographies and what sourcing
models (offshore, onshore etc) will
play the most crucial role in global
HRO going ahead?
Given the importance of language and
culture in HR, sourcing remains a tale of
many cities. At NGA, we combine
centers of scope, which are typically
onshore or nearshore, with a focus on
specialization and subject matter
expertise, and centers of scale, which
focus on volume and standardization.
NGA Human Resources is a global leader in helping organizations transform their business-critical HR
operations to deliver more effective and efficient people-critical services.
We help our clients become better employers through smarter, more streamlined business processes - to
save money, manage employee life cycles and support globally connected, agile organizations. This is
how NGA makes HR work.
What sets us apart is The NGA Advantage. It’s a combination of deep HR expertise and insight,
advanced technology platforms and applications and a global portfolio of flexible service delivery options.
www.ngahr.com
In addition we also have a limited
number of 'premium' centers in onshore
locations to provide a 'white glove'
service to customers who require this.
The capacity of making these various
types of delivery locations work in
concert is both an art and a science.
Currently we have important nearshore
centers in Buenos Aires, Argentina,
Granada, Spain, and Katowice, Poland.
Our main offshore centers are in
Hyderabad and Kochi in India and
Manila on the Philippines.
Which HRO segment/part will come
out to be most prominent in the year
2014?
As highlighted earlier, we believe global
Payroll BPO will be the strongest
performer in HRO. This will be driven by
a number of factors. As more
organizations make a change in their
core HR systems, they want to get
payroll 'out of the way' and payroll BPO
is a good way to do so. Cloud will
continue its march towards mass
adoption and the familiarity with SaaS as
a form of application outsourcing will
allow many organizations to also
outsource process work. Compliance
and complexity of payroll will further
drive demand for global payroll
outsourcing.
Michael Custers VP Marketing at NGA Human Resources
Michael Custers currently serves as
VP Marketing at NGA Human
Resources, a global leader in HR and
payroll services, and a KKR venture
since 2008. In this role he oversees
worldwide marketing activities,
including analyst & public relations,
product marketing, event & lead
management, and branding. Mr.
Custers joined NGA in 2006 as
Director of Investor Relations and
Communications and subsequently
served as Vice President of Global
Alliances and Strategic Marketing for
5 years.
Prior to joining NGA, Mr. Custers
was Director of Marketing at
Certipost, a joint venture of Belgacom
and The Belgian Post, where he
supported the introduction of the
electronic identity card in Belgium.
Mr. Custers started his career with
Aditel, an internet startup. Mr. Custers
holds a Bachelor degree in
Journalism, a Master’s degree in
Business Management and
postgraduate degrees in B2B
Marketing and Audiovisual
Communications. He chairs the North
American chapter of the HR
Outsourcing Association.
Mr. Custers is a Belgian national and
resides in Atlanta, GA.