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.