It’s a small, small world: ‘the new new thing’ for HR (Adapted froma recentpresentation to the Global Mobility Roundtable of the National Foreign TradeCouncil, New York)With the growth of business and infrastructure activity in countries such asChina, the Asia Pacific region is taking on a global economic significancepreviously unheard of. This scale of social and economic change has profound,yet familiar, implications for HR service providers and for the clients andemployees we serve around the world. There is good news in the present climate for HR professionals. Thecompetitive landscape among HR service providers has shifted and ‘customerservice’ is making a comeback. The path of globalisation is filled with… change and adaptation Globalisation has become a reality in a way that just wasn’t possible a fewshort years ago. It is making significant political and social inroads into howwe view our world and, specifically, how we conduct our international businessdealings. Consider the following: – The emergence of China as a major trading power in the world economy andChinese being taught in progressive children’s schools outside China- alongsideFrench, Spanish and other ‘mainstream’ languages – The idea that China could ‘make Mexico look expensive in relative terms’in relation to the cost of production of hard goods, in particular, electronicdevices and parts – The suggestion that Shanghai could become the regional business hub forthe Asia Pacific region, displacing its competitors – Recent and visible thawing of relations between North and South Korea – The not-so-distant fall of the Berlin Wall, once more creating a unifiedGermany – The economic might of the European Commission and emergence of thelong-fabled euro – The reality of ‘super-size’ global companies reporting their dealings inone financial denominator – the US dollar – The ability not just to e-mail, but also to ‘instant chat’ from London orNew York with a colleague or family member in China, India or Japan What does this all demonstrate? Perhaps, that advances in technology andinvestors’ seemingly endless appetite for finding and subjugating ‘new markets’(at least in certain ostensible ways) have been successful to a materialdegree. And there’s no sign of abatement. It demonstrates a change in commonlyperceived horizons and expectations on the part of businesses and othereconomic powers – that is governments – and when expectations change,complacency and common practice have to go out the window or catch up fast. The ground-breaking, new-world philosophy that got us where we are now willdrive demand for international employee support systems and astute serviceproviders that meet the needs of increasingly global workforces comprised oflocal workers and managers – not just expats and international assignees. Will this change HR’s Monday mornings? Even if China or Korea isn’t top of your Monday to-do list yet, it isreasonable to expect that such significant global economic changes will impacton your company’s business and the employees you support over time. There’s no mistaking that even the hitherto ‘domestic’ HR landscape will notbe insulated from the reality of the changing world and the events and fiscalcharacteristics that are driving radical and permanent changes – changes inboth corporate and individual consumer education and expectation as it relatesto ‘value’, underpinned by broadly-accepted changes in attitude to businesspractices and support expenditures. The latter changes are no more clearly seen than in the significant andincreasing momentum towards out-sourcing of HR support services and, mostrecently, towards ‘exporting’ of service functions to service hubs in India,for example, and ‘bundled outsourcing’ of ‘total support services’. The outsourcing dilemma Love it or hate it, outsourcing represents a key feature of HR’s recent pastand a significant measure of its future – especially in terms of providing aviable means for supporting growing international business operations. Historysuggests a good way to meet change is to embrace it, figure out what it meansand how to work with it – not against it. Black Mountain’s own philosophy is that no two clients are exactly the sameand a one-size-fits-all solution is probably flawed in terms of meeting aclient’s needs. The key is to focus on what the ‘need’ is and continually adaptto meet the need as it changes. Looking back to look forward If it is accepted that the world is changing and that clients will expectsolutions that reflect that change, it is as important to look back as it is tolook forward in terms of understanding why many companies are already outsourcingtheir HR support solutions and what they need and expect from it. Consider thefollowing common reasons offered: – Reduce and control costs/share risks – Gain access to world-class capabilities/resources not available internally– Improve company focus/free resources for other purposes – Accelerate re-engineering benefits Source: The Outsourcing Institute Cost reduction and control/share risks Never more so than now, companies are looking for ways to reduce their costsand, in addition, get a greater level of control over their costs goingforward. Outsourcing provides clear opportunities to pass on or ‘share’ therisk of cost increases in service provision and productivity, includinginsistence on providers entering ‘fixed fee’ arrangements – particularlyattractive in the current market. Access to world-class capabilities/resources not available internally Outsourcing is not just about cost reduction, it is also about the provisionof a level of depth and expertise the client could not afford or access on itsown – obtaining expert local advice or providing employee support ininternational locations, for example. Often, it is a matter of response timeand sheer convenience. It is likely that the provider’s expertise and industrypositioning will enable it to scale up, across or down quicker and moreefficiently than a client within its area of expertise. Improve company focus/free resources for other purposes After the burgeoning of e-mail, internet and ‘silver bullet’ HRMS solutionsin the 1990s, it might be tempting to think that the complexity of the HRfunction might begin to ‘level out to a new continuum’. However, this is not so any time in the foreseeable future. The ROI andefficiencies of such systems is much debated, but whatever time and resourcesthey have freed up seems already to have been soaked back into the dailyactivities and projects of ever-more complex HR operations. The constantdilemma for many HR managers, especially those running operations in multiplejurisdictions is how to restore focus on the most strategic activities thatrepresent the most economically astute use of time for limited staff resources.Accelerating re-engineering benefits Some organisations have implemented ‘re-engineering’ of the HR function toprioritise good service to the employee base by positioning available HRgeneralists in a meaningful consultative, relationship management role –supported by ‘centres of excellence’ or similar. Some organisations adapt quicker and better to such paradigm shifts thanothers and some internal support functions are better or indeed, lesserequipped, than others to support this new way of doing HR business. The use ofoutsourcing can be a useful tool in the kit helping to achieve the new look andfeel of HR. In Black Mountain’s case, the shift in paradigm worked out fine. It was avoluntary outventuring of the department to provide outsourced benefitsmanagement to CSFB. As David O’Leary, global head of HR for Credit Suisse First Boston, describesit: “Here we had a benefits department that was perfectly fine, then theyliterally walked out the door, and the next minute they were actually betterbecause they owned the business.” The new new thing: ‘Service. Service. Service.’ Plus ça change… service is back with a vengeance (that is, it never went outof style in the first place). There is perhaps no more compelling lesson to be learned from the 90s’ zoomboom – and no better guiding light for judging future provider activity – thanthe importance placed on knowing your client and prioritising goodold-fashioned service. Service is the new new competitive landscape between providers and that isgood news for HR managers – whether you are buying HR services in dollars, yen,sterling or euros. There’s an increasingly mature and competitive landscape out there tosupport what you as HR managers want to do for your employees both domesticallyand internationally. On the basis that marketplace economics are on your sidein terms of securing good pricing, and there are some mature technologysolutions available now, you shouldn’t settle for second or third row back whenit comes to service. You really don’t have to. Steve Medici, president and CEO of Black Mountain Group and previously directorof benefits for Credit Suisse First Boston, firmly agrees. He sees the key tolong-term success for HR clients through up and down market cycles as beingmore than just cost reduction, technology and re-engineered processes. That’sall part of the basic toolkit and taken as read in his book. “Fundamentally, it’s about providing exceptional, not just good, clientservice. A position that is central to Black Mountain’s business model andday-to-day operations,” observes Medici. www.blackmountaingroup.comAbout the authorDavid Kinnear Business development director, Black Mountain Group Prior to joining Black Mountain Group, David was a director of Credit SuisseFirst Boston (CSFB) where he had been global head of finance and infrastructureand then chief adminis-trative officer for HR. During this period, a number of‘globalisation’ initiatives were undertaken, including outsourcing of Europeanbenefits, background checking, data entry and record keeping, together with theimplementation of PeopleSoft HRMS and an HR intranet globally. He started his careerin the UK, subsequently working for law firms Masons and Linklaters beforemoving to New York as counsel and CAO for CSFB’s highly successful move to itsManhattan headquarters. [email protected] www.blackmountaingroup.com Supplier’s viewpointOn 1 Sep 2002 in Personnel Today Comments are closed. Previous Article Next Article Related posts:No related photos.