Senior vice president, corporatehuman resources, Prudential Financial
In 2002, Sharon Taylor was promoted to her current role just months after her predecessor had signed an HR outsourcing deal with Exult (now Hewitt Associates). It was one of the first major contracts of its kind, and although there were no benchmarks for guidance, Taylor decided to go ahead with the plan. Taylor recently spoke to Workforce Management staff writer Jessica Marquez.
Workforce Management: Why did you decide to proceed?
Sharon Taylor: The key reason I decided to move forward was that I realized that we both had a lot to lose—and everything to gain. We were among Exult’s first major clients whose work was going to move, and $33 million worth of work is not insignificant. Exult had to demonstrate that this model had staying power and was scalable. So in my mind, our risk was mitigated somewhat by the fact that if they fell on their faces, it would be a big black eye for the space and a body blow to this young company.
WM: You went from 541 employees in HR to 185 today, partially due to outsourcing. How did you prepare your staff?
Taylor: We were really honest. We worked hard to find opportunities for them. There were people who were extraordinarily angry at me because they felt that somehow by doing this, it was an affront to the profession. We did a lot to try to train people, but at the end of the day, there are some core competencies that we thought were there but weren’t. Managing a strategic alliance, from a vendor governance and relationship management perspective, is not the same as what these people were doing. There were some people, because of the jobs that they did or how well they did them, that we just assumed they could learn this. But that did not happen in all cases. Some people self-selected out, and sometimes we had to change some people.
WM: How are you gauging your success?
Taylor: We have operational metrics, like required service levels and customer-satisfaction metrics for our department, and employee feedback surveys. We are hitting almost all of our service-level agreement indices. Complaints are way down. In the first year we took $9 million off of our run rate and we will have achieved 20 percent baseline savings over time. And that will grow to 30 percent through the life of the contract.
WM: How would you like to raise the bar when your contract comes up for renewal?
Taylor: I would like to add assessment metrics. For example, we have outsourced staffing at certain levels. I want to look at retention and turnover as a measure of quality on the staffing front. How do we know that the outsourcer is providing us with the best candidates?
WM: Since 2001, Prudential’s overseas employee base has jumped from 10 percent to 45 percent. Do you have a global HR outsourcing solution?
Taylor: We have global benefits programs, like our stock purchase program, which Hewitt is supporting. But there are other things where a global solution has yet to be identified. Our growth globally has been dramatic and abrupt, so we need to refine our strategy and look at how it will manifest itself in the next five years. Then we can begin to explore global solutions that make sense.