HRO Clients Stay the Course

Most HRO Client’s Stay the Course, Seek to Improve Relationships (3/07)

Article from SHRM (membership required). The original study is posted here at EquaTerra – the HRO advisory firm

• Top-ranking benefits sought by HRO buyers. Cost reduction ranked highest, followed closely by access to external skills and knowledge, process improvements, and ability to internally focus on more strategic activities• Only average success to date. On a one to five scale, with five being “benefits fully achieved” and one being “benefits not at all achieved,” most anticipated benefits received rankings of between 2.5 and 3.0

• Responsibility for HRO successes and problems. Buyers tended to note that they share success and problem responsibility with service providers, although they more often gave credit for successes to their own organization and placed blame on their provider

I attended EquaTerra’s HRO Webinar today – hosted by Mark Hodges EquaTerra’s Executive Director, Corporate Development. While this market may have slowed down a bit – it is not going away. We are basically in a period of digestion (providers) and rationalization (pricing, service, scope, governance) following which the HRO market will grow rapidly.

Reminds me of one of my first big deals years ago. My company was taking over Pension and Benefits administration for a utility company with about 25k employees. After a very stressful launch – and taking a beating personally – I asked the client what they liked about working with us.

Her answer? “what I really like is that when we yell at you – you have to respond – our IT department used to just walk out of the room”

And that’s reason enough for me!


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