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HR Technology Conference Opens

Should HR analyze performance like pro sports do? That's the future, according to the opening keynote address of the conference, which drew a record-breaking crowd. Talent management, outsourcing and the ROI of HR systems investments were also explored.

Thursday, October 11, 2007
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Collecting data is a good start, but it's more important to use that data to create a competitive advantage, said Thomas H. Davenport, a professor and author of Competing on Analytics: The Science of Winning, to a record-breaking crowd during the opening keynote of the 10th Anniversary HR Technology Conference and Exposition® on Tuesday at the Navy Pier in Chicago.

It's about "how do I get to the more sophisticated models and optimization [of the workforce] ... ," he said. "I think we will see [the use of analytics for a competitive advantage] in the future in HR to a very large degree. ... The path is pretty clear."

About 2,200 attendees and more than 225 exhibiting companies were registered for the three-day conference, which has seen attendance double in the last three years, said Bill Kutik, co-chairman of the conference and the technology columnist for Human Resource Executive® magazine.

In his opening address to the crowd, Davenport noted that it's common for pro sports teams to leverage HR analytics, such as identifying performance metrics, determining undervalued attributes, assessing the ability to work as part of a team and discovering the players who inspire others to perform better.

If those teams can compete on analytics, companies can too, he said, noting that it "won't be long" until companies adopt such an approach. That is the future, he said.

In fact, he said, a survey of chief information officers by Gartner analysts found that "business intelligence" has been the No. 1 spending priority for the past two years. That indicates a return of "thinking about positive possibilities for using information and technology in the business," he said.

Davenport told the HR leaders they need to hire employees who can take the data and see "the human side. The passion for this particular way to compete. Creativity. Intuition. Insight."

"The big talent battle," he said, "will not necessarily be for everybody but for the kinds of people who have these kinds of capabilities."

Selling Talent Management

Don't bother selling an integrated talent-management strategy to the senior-most HR leader of an organization, said Valerie Norvell, vice president of training and development for Luxottica/Sunglass Hut, one of five panelists on "The Talent Management Panel," moderated by Jason Averbook, CEO of Knowledge Infusion.

It's more than likely, she said, that the human resource executive already understands the need for such a strategy. That's why such time is better spent speaking one-on-one with other C-level executives to "prime the pump."

"Know their objections, what drives them," she said. "Don't find that out in a group setting together because it's far more challenging to address it and head them off at the pass when you are having those one-on-one conversations."

It's also important that the business leaders own the talent management strategy, she said. "HR shouldn't own it."

Bryan Abramowitz, vice president of enterprise services for Leo Burnett, agreed. "This isn't about HR. This is about the organization." It's not about making HR more effective, he said. It's about building organizational efficiency and business results.

Executive sponsorship of the process is key to success, said Liviu Dedes, vice president of organizational and leadership development for Aramark, but gaining the necessary consensus can be challenging.

"It's an evolutionary process," he said, but noted that at Aramark, it was important to focus on the commonalities among the various business lines instead of its differences, "and one of [those commonalities was] how we manage talent."

It's also important, Averbook said, to follow the proper sequence of events. Focus on the process, first, he said, then gain consensus for the process -- and finally, look for the technology to implement the process.

Too many people buy the technology first and retrofit their processes, he said.

And all too often, said Nickolas Nyhus, vice president of workforce planning and HR compliance for Ameriprise Financial Inc., HR is "not clear on what we want." They buy a system and end up not using "even half of it," he said.

HR should also remember that most users of talent-management systems do not use those applications daily. Thus, it is important that the application be intuitive.

In focusing on the process, Mary Ruiz, vice president of HR technology and processes for Yahoo!, said that HR must bring a point of view to the process -- figure out what result you are attempting to drive.

 

And to do that, said Norvell, HR needs to "get out of their ivory towers ... and get into the business. ... [Business leaders] need to know you understand their world."

But, Nyhus noted, workforce analytics is "not an exact science. It's an art and a science and blending the two together."

Leveraging Recruiting

Earlier this year, the leaders at Lehman Brothers were looking directly at a red flag when it came to their HR and recruiting processes -- waved at them, surprisingly, by one of their interns.

Heather Redderson, Lehman's vice president of global talent technologies, urged listeners at her session, "Lehman Brothers Leverages Recruiting Beyond Talent Acquisition," to "never underestimate your interns."

At a well-attended meeting of Lehman's top brass, she said, the intern, who'd been asked to prepare a report on the global investment bank's HRIT processes, stood up and simply announced, " 'If I had this many systems not talking to one another, I'd know I had a big problem.' "

From that point on, Redderson had her work cut out for her. For the next three months, she and her team worked to integrate some 75 "snazzy new tools and technology systems," all of them siloed and not communicating with the other, into a cohesive and integrated global recruitment system so the firm's 27,000 employees could collaborate around their careers and new opportunities for internal mobility.

Describing the Lehman Brothers of a year ago as a culture of departmental and technological entrepreneurs who had carefully crafted unique and personalized systems, she shared that one of the first steps in her systems inventory was to admit the culture wasn't working.

"We were calling these systems victims of terminal uniqueness," she said.

Relying heavily on a Vurv staffing foundation and a PeopleSoft HRMS platform, she conducted an extensive inventory of what capabilities were there and what information flow between systems and units was sorely missing.

"This really showed us the mess we were in," she said.

For one, she said, internal job applicants had no way of knowing which jobs within the company they were actually suited for.

Five months ago, she and her group launched "Career Navigator," which allowed employees to chart and choose their career paths based on real experience and competencies. Unnecessary systems were shut down in the process, "saving the company $12 million in the first four months alone by eliminating recruiters' time and energy in weeding out unsuitable applications.

Using the PeopleSoft system, Lehman workers can now track their career progression on a graphic plotting tool that continually lets them see which jobs are in their capability scope and what would be expected of them. In addition, Lehman recruiters are now being fed the names and profiles of star performers from other departments and countries that they can -- and should -- go after.

"What we learned through all this, essentially," Redderson said, "is that we had the data already, right at our fingertips, but we weren't integrating it to our benefit."

For those in the audience who weren't sure how they wanted to use all the data their systems were providing, she urged them to do an inventory and rewire the communications efforts.

"And remember," she said, "never underestimate your interns."

Hybrid Outsourcing

After weighing both internal and external factors, Aetna decided to go with a hybrid outsourcing model in 2005, said Craig Hurty, Aetna's head of talent strategies, during a session entitled "How Aetna Uses Hybrid Outsourcing."  

In certain cases, Hurty explained, Aetna excelled at certain HR practices and, therefore, decided to retain them, while others were better suited to be outsourcing.  

Not a middle market company, but too big to go the business-process outsourcing route, Aetna decided to go with CitiStreet to provide a single point of contact for employees and managers to call with questions.  

At the same time, Aetna retained self-service capabilities that it built over the years. "If there was a process we could automate, we did it," Hurty said. "Self-service quickly became the only option for most employee and manager transactions.  

"You can even order lunch for a department through self-service," Hurty said.  

Similarly, Hurty added, Aetna retained payroll, which evolved into a very efficient process over the years. Though it considered outsourcing it, he explained, Aetna found that "no one could beat what our payroll department was doing."

And being a health insurer, health benefits wasn't an application it was "willing to throw over the wall and expect someone else to do it."  

Research Unveiled

During a session entitled "What Is the Talent Management Suite? And What Are Vendors Actually Delivering?" Leighanne Levensaler, principal analyst for Bersin & Associates, unveiled some exclusive research that sheds light on these two questions and others.  

"You can understand a lot about the suite providers by how they grew up," Levensaler said. Those, for instance, that grew up in recruiting would likely be strong in sourcing, she said. "So if that's where your biggest pain is, you might want to look at them."  

Though Levensaler said she's optimistic about the future of talent management, she said the "saddest data point" in her research had to do with the reasons behind why companies were buying talent-management suites today.

"Most want to consolidate systems, simplify implementations and reduce costs," she said. "I had hoped they were further along with that. Only a handful said they were using them to solve a serious business problem."  

Levensaler added she found it interesting that almost half (46 percent) of the companies said they were willing to sacrifice functional depth for an integrated suite, while 19 percent said they weren't willing to do so and 35 percent said they weren't sure.  

Further, she said, nearly half (48 percent) of the companies planned to implement one module at a time, while 27 percent said they would do two or three modules at a time. "They're taking a longer view," she said.  

ROI on HRIT

When it comes to the return on investment organizations are getting from their HR system implementations, companies are less focused on head-count reduction in the HR staff and more focused on the business value that today's increasingly strategic HR applications are delivering to the organization.

That was just one of many observations of Lexy Martin, director of research and analytics at CedarCrestone, an Alpharetta, Ga.-based research firm that's released a report in each of the last 10 years analyzing trends within HR technology. She spoke at a session devoted to analyzing the results of this year's report.

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That report was based on a survey of 466 companies in a variety of industries, with about half of them global, representing a total of more than 9 million employees. The survey found that 70 percent of respondents were within two releases of the most recent version of their vendors' software.

Martin noted that the last few years have seen a trend of more companies moving toward strategic HR applications, such as talent management. The biggest area in terms of 2006-2007 spending growth was for business intelligence applications, at 26 percent.

She also noted that the percentage of companies that outsourced their core HR recordkeeping grew to 12 percent this year, from 3 percent last year.

In terms of what HR applications respondents were devoting the most time and money to, business-process improvements ranked No. 1, with 52 percent of companies devoting time to it and 36 percent spending money, followed by HR systems strategy at 48 percent and 35 percent, respectively. Forty-four percent were spending time and 34 percent were spending money on metrics and analytics this year.

However, respondents were devoting very little time and money to service-oriented architecture, mobile or wireless applications or "Web 2.0" initiatives.

Mobile and wireless applications were consuming 2 percent of respondents' time and 5 percent of their budgets, while Web 2.0 garnered only 1 percent of their time and 4 percent of their budgets.

Martin said these areas represent an area of opportunity for vendors.

"Vendors need to educate HR on what SOA, wireless technologies and Web 2.0 can do for them," she said.

In terms of vendors, PeopleSoft was the most commonly used platform for respondents, with two-thirds of large companies (67 percent) saying they used a PeopleSoft HRMS.

For time-and-attendance solutions, Kronos reigned supreme at 32 percent, followed by PeopleSoft at 21 percent. PeopleSoft was also the most commonly used vendor for strategic applications including compensation management, talent acquisition and performance management.

In terms of satisfaction with the various applications, Martin said business users were generally more satisfied than HRIT users. "HRIT users were generally less satisfied because they didn't like the lack of integration among these different applications," she said.  

Global Recruiting

Audience-goers at a session "JPMorgan Chase Takes U.S. Recruiting Global" had many questions for Judy Lannin Panagakos, the company's vice president of HR operations, about what went into the global financial services firm's recent move to take its Taleo-based staffing and recruiting services worldwide.

The firm's automated recruiting system, in place in the United States since 2001, is currently being rolled out to Europe, the Middle East and Asia Pacific. When the project is finished, all 172,000 positions in the company will be covered.

Taleo's global onboarding system will also be going live in some countries later this year, including India and Asia.

What listeners seemed most intrigued by was how a company with assets of $1.3 trillion and operations in more than 50 countries could so successfully and seamlessly implement transitions from individual, paper-based systems to a central HR system in so many different cultures.

Panagakos stressed the need to "communicate gently and regularly and according to the culture at hand."

"The list of shame ... e-mail blasts telegraphing that 'these 10 people have yet to complete their transition,' plays better in the United States than it does in India, for instance," she said. "You do that to a recruiter in India and you will never be able to talk to that person again."

Job candidates and recruiters alike, worldwide, she added, "like the automation. Just beware the differences in cultures and behaviors."

Outsourcing HR

Don't be put off HR business-process outsourcing by bad press, said Mark Hodges, chairman of outsourcing advisory firm EquaTerra, in a presentation entitled "What's Really Happening Now in HR Outsourcing."

According to surveys, almost all (96 percent) of buyers are moderately or highly satisfied -- an average of 3.2 on a scale of 1 to 5 -- with the arrangement, which is defined as outsourcing five or more HR services to a single service provider. And, he said, very few HRO contracts have been terminated and brought back in house.

In fact, higher satisfaction levels are generally registered by those in their second or subsequent years of their outsourcing arrangements, which indicates that process-performance improvements had occurred, he said.

For HR professionals seeking significant cost improvements, however, he said to think again.

The cost per year, per employee for HR outsourcing was lowest in 2004, he said, and it has been "creeping up every year since."

In addition, while HR BPO is experiencing a 16 percent growth rate -- with HR BPO being the fastest growing segment of the HR services market -- there is a supply constraint.

The resources of many providers on the selling and transition teams are at capacity -- although the service centers still have capacity -- so some HRO organizations are very selective about which projects to pursue, he said.

And with all global HRO providers at capacity, he said, the realm of HRO was changing to a more regional perspective as compared to the global perspective that was more prevalent two years ago.

That regional perspective is also the result of some companies choosing to roll out HRO changes at a much slower pace so employees can better digest the changes, he said.

Read the report from the second day of the HR Technology Conference.

Read the report from the final day of the HR Technology Conference.

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