Transcript from Christine Stanowski’s video interview June 2009
Selecting the right HR Outsourcing options
Christine Stanowski’s Biography
Christine Stanowski,
Vice President Global Consulting, ADP Christine is Vice President of Global Consulting for ADP in Europe. She is responsible for supporting the overall HR Outsourcing sales process for large multinational companies. Christine heads up a team of senior consultants in charge of delivering RFPs, RFIs, due diligence, business cases, service level agreements, transition plans and service organization. Her professional background includes the management of French and international payroll and HR projects. Christine is based in Paris but travels extensively, mainly across Europe. She can be reached at: contact@globalhrstudio.com
Transcript from Christine Stanowski’s video interview Watch the video
HRO options [40s - 1mn55s] A critical step in designing your future HR organization through outsourcing is to understand the options available on the market. There are many outsourcing options, from Application Management Outsourcing to the full outsourcing of a function. So, how do you choose the right one for your company? The first criterion is to identify the responsibility you want to transfer. Is it IT infrastructure? Applications? A process? A specific function? The answer to this question will enable you to define what to expect from your future service provider.
The second criterion is to know in which environment you want the service to be delivered. Is it a dedicated, one-to-one environment, which means that the outsourcing offering will be tailored according to your company’s specificities? Or, do you expect the service to be delivered in a shared, one-to-many environment, which means that your provider will serve multiple clients with the same platform and application. Of course, using shared and more standardized platforms means you can generate significant cost savings.
01
Calculating your TCO [1mn56s - 3mn51s] It is also important to understand what is in place in your organization today. Do you know what is your HR function’s Total Cost of Ownership (TCO)? How many full-time employees are assigned to the HR function or the process you want to outsource? There are many factors that can lead to failure of your outsourcing project if you don’t identify them before beginning.
You need to know how many full-time employees are dedicated to a function or a specific task, what is the pay frequency, how detailed is payroll production in your industry or geographical locations, what is the cost and frequency of your HR Information Systems maintenance and upgrades, if your company payroll is compliant with local legislation in every country …It takes time to calculate your TCO and identify your risks.
The outsourcing path
Future Stage “to be”
Current Situation “as is”
- Total Cost of Ownership - Risk Assessment
Full Time Employees, Payroll Complexity, Pay Frequency, Benefits, Time, Costs of HRIS maintenance and upgrades, Compliance, SARBOX, Data Privacy, Security…
This is the time to determine where you want to go, what are the reasons that push you to target some specific objectives and make sure that those objectives are shared and validated by the members of the board.
02
Building your new HR organization [3mn52s - 5mn11s] Once you have assessed the “as-is” situation and have a clear idea of where you want to go (the “to-be” state) to start working on your outsourcing project’s scope: • Select the service level you want to benefit from: Processing Services, for example, usually means the management and execution of a single process. Managed Services and Comprehensive Outsourcing Services means handing over an entire process or function.
• Define the functionalities to be handled by your service provider: tax filing, payroll, benefits and time and labor management, employee self-service and manager self-service. • Define the outsourcing contract’s footprint: local, regional, or global.
The outsourcing project scope
Service Levels
Processing, Managed Services, Comprehensive outsourcing services
Local, regional, global
Footprint
Tax filing, payroll, benefits and T&L management, ESS/MSS
Functionalities
03
The service level selected will have an impact on the transfer of responsibility from your organization to the service provider. In your new organization, jobs and responsibilities won’t be the same as before. This has to be taken into account when you re-write your internal job descriptions. The functions that will be handled by your service provider will enable you to benefit from economies
of scale, streamline processes, and enjoy flexible and more accurate maintenance and upgrade of your HRIS. The same goes for the outsourcing contract footprint. More and more companies use outsourcing as a way to streamline and regroup some functions at the regional level in shared service centers.
Project management methodology [5mn12s - 6mn37s] From beginning to end, outsourcing requires support and follow-up. In most cases, outsourcing contracts fail or don’t deliver on all their promises because of the absence of a governance team responsible for timely delivery of within-budget outsourcing implementation.
04
The stress has to be taken into account and managed by a team that will guarantee that initial goals are met within budget and in a timely manner.
05
www.globalHRstudio.com