HR Offshoring – Lessons from Experience Bernard O’Driscoll The Workforce Conclave 15 th February 2008

Session Outline Drivers for HR Offshoring Perceptions of HRO Marketplace Finding the Right Partner Scope and Outcomes Personal Lessons HR and global sourcing… the future

Drivers for HR Offshoring

Perceptions of HRO Marketplace

Finding the Right Partner

Scope and Outcomes

Personal Lessons

HR and global sourcing… the future

Business Drivers for Exploring HRO: HR Shared Services 5+ years old and “mature” Many well-established UK outsourced HR relationships: Healthcare, Payroll, Training, etc. Strong HR record of cost reduction, service improvements, innovation and risk management BPO maturing as a corporate option … So, what about HR?

HR Shared Services 5+ years old and “mature”

Many well-established UK outsourced HR relationships: Healthcare, Payroll, Training, etc.

Strong HR record of cost reduction, service improvements, innovation and risk management

BPO maturing as a corporate option

… So, what about HR?

The HR Director’s Intent: Evolve beyond mature HR Shared Services model Create a strategic partner for HR service delivery – with options for the future Impact the business bottom line – both cost reduction and increased HR focus on strategic issues Transform the retained Human Resources function

Evolve beyond mature HR Shared Services model

Create a strategic partner for HR service delivery – with options for the future

Impact the business bottom line – both cost reduction and increased HR focus on strategic issues

Transform the retained Human Resources function

Aim to create… Outstanding HR Business Partnering support HR Policies that maximise business capability Best possible effectiveness and efficiency from HR Processes … Great HR

Outstanding HR Business Partnering support

HR Policies that maximise business capability

Best possible effectiveness and efficiency from HR Processes

HR Offshoring Marketplace (circa 2005/6) Eastern Europe or India ‘ Total Outsource’ offer from main players Limited evidence of dedicated UK-only HR Service provision working offshore Suppliers understanding of HR Directors’ mindset and decision criteria not fully developed Committing to HR offshoring required strong convictions and trust in partnership with suppliers

Eastern Europe or India

‘ Total Outsource’ offer from main players

Limited evidence of dedicated UK-only HR Service provision working offshore

Suppliers understanding of HR Directors’ mindset and decision criteria not fully developed

The Ideal Partner… What matters to business/HR decision makers… Complementary culture? Good awareness of UK employment practices? Strong track record in BPO/HRO? Right pace and ambition for transformation? A sensible next step, not a different direction? … depends on business and HR context

What matters to business/HR decision makers…

Complementary culture?

Good awareness of UK employment practices?

Strong track record in BPO/HRO?

Right pace and ambition for transformation?

A sensible next step, not a different direction?

The Partnership Outcomes Total reshaping of existing HR operations with circa 140 FTE offshore in new partnership Manage the Service Create the Vision Set the Direction Lead the Change Lloyds TSB Establish Operations Build Offshore Service Capability Develop further options Deliver the Service Steria

Manage the Service

Create the Vision

Set the Direction

Lead the Change

Establish Operations

Build Offshore Service Capability

Develop further options

Deliver the Service

Business Retained… HR Contact Centre HR Consultancy (Recruitment, Performance Mgt, Change, etc.) Legal Advice & Risk Management Services HR Supplier & Commercial Management UK-essential administration … HR ownership of engagement with employees

HR Contact Centre

HR Consultancy (Recruitment, Performance Mgt, Change, etc.)

Legal Advice & Risk Management Services

HR Supplier & Commercial Management

UK-essential administration

Scope… HR Management Information Staff Exit/Leaver Administration Back Office support for HR systems and Data Management HR Technology Programme Management Training & Administration Helpline Outbound References Recruitment back office … a combined UK/India HR partnership with in-house and off-shored operations

HR Management Information

Staff Exit/Leaver Administration

Back Office support for HR systems and Data Management

HR Technology Programme Management

Training & Administration Helpline

Outbound References

Recruitment back office

Lessons Learnt Seeing India is worth 1000 power point slides HR Directors need help in framing what they want to achieve – retained HR function, criteria for partner selection, performance measures, etc. Decision making to commit to HR offshoring is complex Building and sustaining confidence in the partnership is key to successful implementation HR Offshoring can add strategic value to HR and the business

Seeing India is worth 1000 power point slides

HR Directors need help in framing what they want to achieve – retained HR function, criteria for partner selection, performance measures, etc.

Decision making to commit to HR offshoring is complex

Building and sustaining confidence in the partnership is key to successful implementation

HR Offshoring can add strategic value to HR and the business

Thoughts on the future… HR offshoring is a natural evolution for mature HR shared services operations There is considerable potential in tailoring BPO capability to HR-specific offerings – either standalone or as extensions to existing relationships HR Offshoring can add strategic value to a business and more companies will begin to examine the case for change – this goes beyond transactional work Suppliers need to ensure they can engage with HR leaders in framing a compelling case for change – this will be a key differentiator in the HRO marketplace

HR offshoring is a natural evolution for mature HR shared services operations

There is considerable potential in tailoring BPO capability to HR-specific offerings – either standalone or as extensions to existing relationships

HR Offshoring can add strategic value to a business and more companies will begin to examine the case for change – this goes beyond transactional work

Suppliers need to ensure they can engage with HR leaders in framing a compelling case for change – this will be a key differentiator in the HRO marketplace

HR Offshoring – Lessons from Experience Bernard O’Driscoll The Workforce Conclave 15 th February 2008