It’s unusual to see competing HR outsourcing providers and
consultants agree on anything. But in a first for the industry, a number of HRO
providers, advisors and buyers have come together to create standards for
the industry.
Advisors and providers have lamented the lack of
standardization in HRO for some time, saying employers often don’t know what to
look for or what to measure when they search for an HRO provider.
That’s why the Human Resources Outsourcing Association, a
consortium of about 300 HRO providers, advisors and buyers, has established a
committee to set industry standards for the market.
The standards will provide a template for HRO buyers and
sellers to use for their statements of work, service level agreements and
pricing, says Richard Crespin, global executive director of the
association.
“Our buyer membership is asking for greater transparency and
greater comparability across different processes and providers,” he says. “The
necessary precondition to that are standards.”
Earlier this year, the HRO Association formed a committee to
focus on the project. Members of the group are: SAP,EquaTerra, Unilever,
Prudential Financial, Accenture HR Services, Convergys, Kelly Services and
Fidelity Investments. Crespin
anticipates a final set of standards to be agreed upon by year-end. The
standards would be free to members, and the organization will decide on pricing
for outside parties, Crespin says.
Sourcing advisors EquaTerra and TPI each unveiled standards
initiatives during the past couple of months, and the committee will try to find
common ground between the two programs and establish a single set of standards,
Crespin says.
“Both initiatives point to the same need for standardization
across the industry,” says Debora Card, program director of HR advisory services
at TPI.
Standardization would shorten sales cycles, thus reducing the
amount of time and money that buyers and providers devote to the discussion
phase of an HRO agreement, says Arthur Mazor, managing director of human capital
solutions at Affiliated Computer Services, which worked with TPI on its
initiative.
But providers shouldn’t be fooled into thinking that the
largest HRO buyers are going to agree to standards, he says. Templates make
sense for companies with about 10,000 employees, but larger organizations will
still want a more personalized approach, Mazor says.
“We feel pretty strongly that getting to a nirvana of
everything standard out of a box in the very large market is never going to
happen,” he says. “Anyone who believes that will happen doesn’t understand HR or
the complexities of this business.”
Although ACS worked with TPI on its initiative, it has also
talked to EquaTerra about its “OpenDoor HRO” program, Mazor says.
It’s not an issue of who has the better program, Mazor
says.
“The industry needs this,” he says. “Everyone wants to see
one set of standards around the core components of contracting.”
—Jessica Marquez
= Member Only
