Knowledge: The Elixir to Drive Out HRO Inhibitions

In the recent HfS Soundbite, The Desire to Move to HR Cloud Platforms is Recreating HRO, we picked apart the key drivers behind HR Operations in the As-a-Service Economy. As always, there are two sides to a story. Therefore, in this second of the series, HfS pulled from our HR Operations in the As-a-Service Economy Blueprint research to zero in on what is inhibiting the adoption of outsourced or hybrid shared service HR.

HfS identified the leading challenges in this market as including:

• Long Decision Time in Multi-Process Contracts: This inhibitor manifests itself in two distinct phases. First, service providershave to engage and win over a number of service line department heads within the HR value chain. This is often exacerbated by the reluctance to change and adapt service provider defined processes within the middle-tiers of management. Second, even after having moved passed these obstacles, it takes so long that key stakeholders in the client organization often have moved on. This breaks down the communication process and often results in negotiations halting altogether.
• Absence/Cost of Global Change Management: With increasing options for automation and plug and play digital business services, enterprises need to proactively think through the impact of technology and new processes on their workforce, and how to manage expectations. With BPaaS in particular, buyers need to consider substantial mindset and user changes to integrate service provider defined and managed processes. Change management is an investment in terms of not only hours, but also specific personnel to facilitate. Once buyers come to grips with the extent of this added cost it can often lead to them falling out of the buying process altogether.
• Misunderstanding the Complexity of Moving to the Cloud: The desire to adopt HR cloud platforms is a key driver in the adoption of employee-centric HR Operations. However, make no mistake: We understand that moving over to an entirely new HR platform can be a daunting and complex procedure, especially for larger organizations. Buyers can be so overwhelmed that, as the scale of the procedure becomes apparent, they drop out of the buying process.

So the road blocks have been identified, but is the solution clear? Well, first it is vital to state that these are not insurmountable inhibitors; we see movement reflected in the positive nature of the growth within this market.

HfS has identified that the most successful service providers are using the following solutions as they partner with clients:

• Education: This is where the leaders in the market are winning deals. Educating the industry on not only the benefits, but the challenges of optimizing HR processes and moving to cloud platforms, is crucial. There is a thirst for knowledge in the HR space at present. Service providers which can engage at an industry level with thought leadership articles and forums are overcoming the fears and misconceptions of buyers.
• Targeting Sales Strategies at the C-Level of Organizations: Getting this level of buy-in creates the stickiness needed for long sales cycles, regardless of departmental head movement.
• Design Thinking: Service providers can play a role in engaging with their clients in asking more questions to better understand the employee profile, and experiment with different models, solutions, and partnerships that help enterprises address the changing nature of the workforce.

The HR market is beginning to evolve in the mold of the As-a-Service Economy, to focus on partnering to drive business outcomes, both with service providers developing supporting innovation and with the buyer community ready to embrace these innovations. The next step, however, is overcoming the institutional challenges and inhibitors to move through to implementation and realize results.