Kathryn Kelly, President of ExcellerateHRO, relishes the fact that HRO suppliers are taking away the tactical work that makes up the "daily grind" so the new, reskilled HR department can focus on the strategic. Kelly, who has a research background in epidemiology, sees a definite connection between work and health.
Q: What's your assessment of the future of HRO?
A: I am optimistic about the future of HR as well as for HR outsourcing. The next ten years is a critical time for companies around the world to optimize their talent and leverage people to build stronger, more competitive enterprises.
My goal as an HR outsource provider is to enable our clients to focus on their strategic business needs by removing the daily transactional requirements across HR delivery. But for that to work, HR organizations need to transform their focus and people skills toward strategy and away from administration.
One buyer told me, "We could never have accomplished the transformation of our HR department without you minding the store and handling the transactions." We strive to ensure our clients' R strategy produces business results and makes a positive impact on the company's bottom line.
Q: Where is the HRO industry headed?
A: Right now, the competitive landscape in HR outsourcing is ripe with competitors. All have a legacy of one kind or another-whether it be call centers, IT, systems integration, benefits administration or payroll administration. That legacy has framed their unique business approach to HR outsourcing and has made the choices a buyer has in the marketplace quite differentiated.
Some analysts and experts in the industry are predicting consolidation of the players in HR outsourcing, but I am hopeful that the market will grow at a pace that will allow most of us to survive and thrive in the years ahead.
Q: What about the technology platform?
A: EDS has a long and robust history in IT outsourcing-much of which has informed our approach to HR outsourcing. We believe that technology should "enable" solutions for HR rather than "define" them. Because of both mergers/acquisitions and globalization, HR functions have faced considerable challenges that technology is just now rallying to address. For example, many things we were unable to do a decade ago are now automated on the Web. Self-service transactions are no longer a luxury; they are a necessity to achieving the cost and satisfaction levels demanded by discerning buyers.
Q: How important is technology?
A: HRO success is really not about technology, it's about satisfying your myriad customers. State-of-the-art technology is "needed to play" in this competitive industry. I believe what will ultimately separate the leaders from the followers in this business is the ability to address the needs of the customer--whether that is the HR generalist, the employee, the manager, the recruit, the trainee or the business leaders.
Q: How important is standardization?
A: There is a lot of dialogue within the HR outsourcing community about standardization today. And while we are passionate advocates for standardization through adoption of HR best practices, we are practical enough to understand that one size does not fit all. So ultimately, we will find the balance between customization and standardization.
Q: Where did you go to school?
A: I grew up in the Washington D.C./Maryland area. I earned two master's degrees from the University of Washington and completed my doctoral studies in public health at Johns Hopkins University.
Q: Epidemiology. Tell me about that career.
A: I spent the first eight years of my career working for the Public Health Service in preventive medicine and health care cost-management research. I often get asked how any of that training or work experience has impacted my career in business. Ironically, public health is now a much more visible issue than it was in the 70s and 80s, with AIDS and focus on global health issues.
Q: So how did you get into outsourcing?
A: I joined Towers Perrin to lead its healthcare practice. I was there 18 years before I joined the joint venture with EDS. I led the team that defined how ExcellerateHRO would go to market then came on board to lead strategy and growth.
Q: How is epidemiology like HR?
A: People are at the core of both, and I see a clear connection between work and health. Business and health-and the intersection of the two-have long intrigued me. I believe companies that outsource their HR delivery seek to improve how they interact with their employees and constituents across the entire enterprise. At the core of a healthy person is a healthy body, and at the core of a healthy organization is healthy employees!
Q: In your opinion, what are the hottest trends in HRO today?
A: Learning is hot because the value of knowledge has become acute. The value of today's employees isn't entirely based on what they've done in the past, and people realize they need to learn continuously and master new skills to perpetuate their worth.
Today's enhanced computer-based learning programs are economical and achieve excellent results. Companies can identify learning programs that develop employees' competencies and ultimately tie to enterprise goals. Mapping these learning paths increases productivity and excellence across the workforce.
Many people view learning as a transaction. I look at it as a way to enhance an individual's life and his or her ability to increase their value to the company.
Q: Do people learn differently today?
A: People still have their individual learning styles and preferences, but the ways we train people are different. The old way is antiquated because it's difficult for someone to take even a day off work to go to school. Today, with electronically delivered training, people control when and where they learn. They progress at their own pace and on their own schedule.
Q: What parts of the learning process are good to outsource?
A: That is really for each buyer to decide. For some companies, learning is a core competency of the organization. So keeping that in house is a must. For others, outsourcing may be the only way to achieve a competitive edge. It all depends. There is no right answer.
Q: What challenges does a buyer face when it outsources HR?
A: The biggest challenge for HR organizations is understanding how truly daunting change management is. You can't outsource anything more intimate than the processes that directly affect your employees. When you change how these services are delivered, you can expect ramifications.
Minimizing the impact of change has to be addressed before the outsourcing implementation begins. It should first be addressed in the vendor selection process; then the HRO provider must help the buyer build a change-management plan in advance.
Q: Any other challenges?
A: When people and processes are migrated from one location to another, the complexity of the project increases tremendously and this adds the potential for disruption. Disruption can be minimized by implementing operating standards, best processes, and training and mentoring throughout the migration process. In this way, work is done in the same way, adhering to the same service levels, whether in Budapest, Pune, or Cherry Hill, NJ.
Q: What are HRO's benefits?
A: Cost savings are the pot of gold at the end of the rainbow. Our buyers have enjoyed savings between 15-40 percent in the first three years of their contracts with 20 percent as the average.
But another big benefit is business intelligence. Outsourcing allows companies to integrate and evaluate the data from all of the individual HR areas. This analysis can reveal critical insights into the workforce?identifying trends and providing accurate information to support business decisions. To put it simply, HR can make sure they have the right people, in the right place, doing the right work at the right time. A company doesn't get this business intelligence if they handle all HR services internally.
Q: How do you develop a successful HRO relationship?
A: An HRO engagement works well if both parties make an enormous investment in their relationship. They must have similar expectations and a good culture match. A good governance model is also critical. By clearly outlining timelines and responsibilities, the expectations of the buyer and the provider are defined. Good governance ensures accountability and keeps a good relationship intact throughout the implementation process.
Q: Who is your target buyer?
A: An organization that is large, complex, and global. Our buyers typically have a myriad of HR practices that they desire to standardize around the world. You don't need 600 definitions of shift work! Our buyers want us to streamline and standardize their HR.
Most of our buyers have 30,000 lives or more. But we do have some buyers in the mid-market.
Q: How do you work with buyers?
A: HRO is serious business; I want our buyers to make informed decisions. I always try to be as transparent as possible, so they know why we do what we do.
If we find no alignment with a potential buyer, it's better for both parties if the potential buyer walks away. But I am joyous when we see the same business goals walking down the yellow brick road together.
Q: How do your buyers want you to handle their employees?
A: Some don't want their employees to use a call center. Others set up a self-service site but still want to have a call center to make sure employees have that option. In either case, standard, consistent, easily accessed information is the goal. We have the same aspirations as our buyers; we want to provide a positive experience when people work with us.
Q: What's the best piece of advice you've received?
A: To live "in the now." Not in the past-and not in the future. But in the now.
Q: What's your favorite sport?
A: I am a former equestrian. I rode competitively for 20 years and it's still my passion. Except now I am an observer; it's far too dangerous at my age.
Q: What is your favorite book?
A: I am an avid reader. My favorite book is Catch Me If You Can by Frank Abagnale. He spoke at an EDS conference, and I have an autographed copy of the book.
Q: Is that your favorite movie?
A: I liked that movie, but my favorite is Spencer's Mountain with Henry Ford and Maureen O'Hara. It's the movie that inspired the Waltons on TV. I liked it because it depicts strong family values and the importance of connectedness.