I have been reading the research produced by the outsourcing companies lately, and here I will review the one produced by Hewitt called: Is HR Still “Stuck in the Middle”?
The methodology comes out of their HR Analyzer, an activity based costing analysis that provides some interesting benchmarks. I think it is worthwhile looking at, as it is their bread and butter and better be accurate.

Stuck in the middle of what? Hewitt has seen that many HR departments started to transform themselves to deliver more value to the business and are stuck. So, HR leaders, listen: why do they think you are stuck?

Unclear vision, poor change management, inefficient HR delivery, right people doing the wrong work and suboptimal use of HR technology are the five reasons identified.

How can you solve your blurred vision? Hewitt says simply create a vision and make sure to sell it to the executives and to managers with numbers. We can’t agree more with this last point.

Right people doing the wrong thing is a very simple concept but that can be very powerful indeed. One example is a F500 that saved $13.5 million by assigning the appropriate entry-level individuals to the administrative task skilled specialists typically used to perform.

The wisest advice regarding suboptimal use of technology is probably to make sure you have change management in place as well as process redesign when you put a new system in place. But maybe the simplest and most efficient is: evaluate effectiveness periodically. This is a subject close to our hearts. Leading the way with the On Demand platform, we, for instance, at Taleo enable each customer to have a global view of the world and true consistent real time benchmarks on a periodic basis to evaluate where you stand. For sure, it is a key to world class performance.

Hewitt suggests as well three ways to get unstuck,
1. Move to shared services, where they have seen the cost per FTE goes from $2,403 to $2,017 and the ratio of FTE to HR staff from 104 to 82.
2. Invest in HR technology/self-service.
3. And of course explore the opportunities for outsourcing.

At the end of the day, maybe the question is, are we really stuck? Of course change is a constant. What’s probably the best for organizations that don’t want to move to an outsourcing model is that the outsourcers will make you more accountable for your performance, and make your department become better.

The Conference Board’s Stephen Gates produced a good piece of research around the use of what he calls “people measures” – turnover, employee satisfaction, diversity,...

The key question is: Are companies using people measures to achieve strategic goals? We all know that people are the key for the success of organizations, but are we able today to report in a meaningful and useful way for managers?

From the survey results, the people side of the business seems still to be perceived more as an art rather than a science. Only 12% use significant people measures to make strategic decisions, only 5% use them in a causal model, only 9% link people data to customers. Old news you may say, as it is the holy grail of business performance.

But there is some hope, especially around two concepts/practices coming out of academic work and consulting. First is to focus on the pivotal or key roles in your organization. The “pivotal role” is a fancy way to re-formulate the 80/20 rule: 20 percent of your employees or roles will generate 80 percent of your profit. Work only on those critical jobs, create some deep competency profiles and use those for recruiting, training and developing people. The second practice is to finally use the causal linkage with strategy maps, or in other words, improve your investment decisions by understanding where your investment will have the most impact.

Those two practices give some hope and direction on where to go, and there is also some good news in the report. 84% of respondents plan to increase the use of people measures in a more strategic way, 63% of senior management already monitor those on a quarterly basis and 15% of the companies report people measures externally.

However, we would add to the assessment of the Conference Board the emergence of another light in the tunnel: more and more companies today are starting to have the means of their ambition. Thanks to talent management technology, data are often available for the first time. So, as often in social sciences, we need enough data to understand the drivers and finally to gain a little more science to drive intelligent decisions – so don’t wait to start measuring more than efficiency!

The latest report from AMR Research, “The Talent Acquisition Landscape” brings up a couple of interesting points for any organization’s talent strategy. The report looks at the issues of talent acquisition, and the solutions and vendors available today to solve them, but also comments on a big fear in this market.

First, as we know, talent acquisition solves a true business problem: ready availability of work capability – or in other terms, the labor force, and most important, quality of the new labor force. Indeed, every single manager in response to this growing need always says, “give me the best individual now!”

This simple need benefited in the last couple of years from the fluidity that the Internet provided and the many solutions created, such as the job board (for example, Monster to address the speed aspect) and the talent management system (for instance, Taleo), to integrate it all and mainly to solve the quality aspect.

AMR observes, “every company that we spoke with found significant positive results from implementing this software” going from reduced cost per hire by 40% to hiring cycle by 50%. In short their first point: the value is there and has been proven.

The second part of the report focuses on vendor comparisons and gives recommendations about how to look at solutions and the question many organizations struggle with: Shall I go with my HRIS platform extensions or with best of breed? My read here is that the only benefit AMR sees from SAP and Oracle is for existing “senior level support.” If you have that regardless of the platform, AMR underlines the significant ROI you can gain without any integration by best of breed. In short they recommend, “Don’t delay because of integration fears”, and use the success built by the first implementation to build the momentum to do more.

I agree with AMR here. We have observed that many organizations drove significant results on their talent acquisition best of breed implementation—good ROI, highly visible up to the CEO, even winning internal prizes—while integration work commonly happens in subsequent phases. Yes, integration is often built up into too much of a case. Let’s look at the numbers: 1,000 hires to be re-keyed in at 5 minutes each will take 83 hours for a data entry clerk. It will cost you less than $2,000, which in many cases is less than 5% of ONE agency placement. Would you be better off avoiding that agency placement by having better data mining capability or better recruiter adoption or have it all integrated?

I guess it is a paradox of organizations that want to be rational by forcing integrated processes, yet don’t want to save hundreds of thousands – if not millions – for fear of spending a couple of thousand to solve the small integration need. We definitely agree with AMR “Don’t delay because of integration fears”.

Recently I was presenting to a group of senior HR individuals in Europe. As a closing I decided to give them a challenge. I asked “Who among you is the future CEO of your organization?” I was received with a little grin on the face of many, a grin of disbelief.

I repeated this question in front of several hundred people at the Taleo Users conference, and asked, “Why would you be a good candidate for the CEO role?”

With those repeated cold responses, I decided to inquire a bit more. Indeed, according to a survey done by DBM, less than 2% of CEOs came from HR. Xerox, with its CEO Anne Mulcahy, is one of the companies in which the CEO was VP of HR, but she started in sales.

This is even more of a dilemma when we look at what executives are saying:
1. 95% of CFOs say that human capital management was in the top 3 most important things for the success of their company (and 44% say it is #1).
2. 78% of board members say that they should spend more time on talent and skills; even ahead of their second concern - strategy & risk at 76%.

So why are only 2% of CEOs coming from what is seen as the most important department of the organization? I have only conjectures, and would like your feedback. It could be that HR people don’t speak numbers; that HR people are not focused on business enough?

But maybe we are confusing two things: HR is not talent and skills, HR is not talent management; HR is first and foremost benefits, payroll, administration and lastly talent, (and sometime learning). This difference is an important one, and we now see more and more of a split in the software applications organizations are using. One big application for payroll and benefits (Oracle or SAP) and another to manage talent and skills – the emerging industry we are in.

Consider the aerospace customer that decided to consolidate all its 172 software applications into 2: Taleo and Peoplesoft/Oracle. Or our Fortune 100 customer that made its Talent Management department report to the COO and not to HR.

Maybe CEOs should not come from HR after all!