Rosaleen Blair, global managing director, Alexander Mann Solutions
When Rosaleen Blair arrived on the UK recruitment scene in 1996, it was highly male dominated and transactional. As she puts it: “The message was: if you want this kind of person, we will find you one.”
Feeling that recruitment could be approached with more subtlety and understanding of the client’s needs, Blair persuaded her employer, Alexander Mann, to set up a joint venture with her to test out her ideas.
The new business, Alexander Mann Solutions (AMS), began life with Blair and a desk. It now employs 470 people and turns over 96 per cent of the group’s total sales – “The baby has taken over the house,” Blair comments. The group has divested itself of most of its executive search and other businesses, leaving only a few niche companies. Blair, who is now global managing director of AMS, says this was to avoid conflicts of interest.
After leaving her convent school in Dublin, Blair trained as a Montessori teacher before starting a small agency placing nannies and nurses. Soon she was doing business in France and Italy. But Blair wanted to “learn how to do it properly”, so she sold up and joined Alexander Mann in London. She was not inspired by what she saw.
In setting up AMS, Blair not only became the first person to establish recruitment process outsourcing (RPO) in this country – although she didn’t immediately come up with either the model or the terminology – but also took a diversity-based approach to running her business, attracting women and older people through flexible working arrangements. As a result, half her employees are women, their average age is higher than the industry average, and she says 3 per cent leave each year, compared with a 20 per cent industry average. AMS also focuses heavily on staff development.
Blair is aiming to build a global business and already operates in Australia, Europe, the Middle East and Africa. “More and more firms are starting to look at outsourcing and thinking that total HR outsourcing is a step too far, so they are looking for niche providers as a first step,” she says. “Some that already have HRO are carving RPO out from that.”
Hugh Morris, executive director, Xchanging
The man who runs Xchanging HR Services is a master of the pithy comment and vivid metaphor. Take his view on attitudes to outsourcing: “The biggest problem management has with outsourcing is people’s resistance. They fear that they will pour a million gallons of water out to create a lake and all they’ll get is wet sand.”
And what lies behind Xchanging’s approach to outsourcing? “It’s all about trying to avoid having one year of love followed by four years of trench warfare,” he declares.
Usually sporting red braces, Hugh Morris moves seamlessly from the Oxford and Cambridge University Boat Race, which Xchanging sponsors, or Sadler’s Wells theatre, where he is on the board of governors, to the company’s main HR service centre in Preston.
He began his career at what is now Accenture in 1980, stayed there 21 years, becoming a global managing partner, and left for IT training company QA before joining Xchanging in 2003.
David Andrews, who set up Accenture’s outsourcing business in 1986, founded Xchanging in 1998. The business handles outsourcing across various functions, including payroll and recruitment, by establishing partnership agreements with clients rather than negotiating a performance-related fee. It also stresses good people management. Both strands are typified in Xchanging HR Services, a joint venture with BAE Systems, whose HR administration it handles.
Morris says: “We concentrate on your need to recruit 500 graduates a year rather than how many job fairs we will attend. People tend to put too much detail into the service-level agreement.”
He agrees there is a trend for companies to outsource single strands of HR. “I think the indigenous HR people feel more comfortable with it,” he says. “The turkeys think that if they don’t have Christmas, but have a series of small unrelated festivals instead, then they don’t have to be part of it.”
Mark Hodges, founder and director of strategy and corporate development, EquaTerra
Whether you love it or hate it, the term “business process outsourcing” (BPO) seems to be here to stay. And the man you can blame for inventing it is Mark Hodges.
At the time, back in the early 1990s, he was chief operating officer for a Californian firm, G2 Research, and felt BPO was the most apt description for the new phenomenon of outsourcing whole processes. Hodges and the chief executive, Graham Kemp, sold G2 in 1999 to consultancy Gartner, where Hodges continued to work. Since then he has moved fast and frequently, going first to Exult, the specialist HR outsourcing provider that secured the BP contract (and was last year taken over by Hewitt); then to US outsourcing consultancy TPI, where he set up and led its BPO practice; and lastly leaving to form rival firm EquaTerra in April 2003.
Hodges now finds his old employer, TPI, merging with his new baby. He says the merger came about because business was expanding and consolidation was needed to provide a global service with regional expertise.
His experience at Exult has resulted in a hard line on job cuts. He says a firm would normally be expected to reduce its retained HR jobs by a third: “BP never took the one-third of HR people out. The right decision is to force it. Whoever is doing the work that is outsourced should go.”
He adds that many of those remaining behind also need to be replaced by people with different skills or retrained, arguing that too many administrators are promoted into HR jobs: “For instance, in an outsourced environment, you might see a recruitment professional arguing with the outsourcer about how it’s done. The provider simply says: ‘You can do my job for me – that’s great.’”
EquaTerra described itself as “agnostic to the solution”, meaning it advised firms not to outsource if that was the right answer, but to transform a process such as HR internally.
Elaine Bird, client executive, HR BPO, at EDS
Elaine Bird is one of the few people leading service provider companies who has had substantial experience as an HR professional.
It all started in the late 1980s, when Bird was running projects for Cedric Brown at British Gas. She complained to him about the service she was getting from the HR department, and his response was to move her in there “in a senior capacity”.
“I ended up with a multi-million-pound budget and 36 HR people working for me. There was a lot of suspicion initially, but they learnt more about business and I changed the way they thought about the role, which had been internally focused, and pushed them out into business areas,” she says.
“We were going to meetings with business heads rather than simply taking calls. Each one had a part of the business to advise. In the past, I would ask a question about recruitment and then get transferred to someone else to talk about training. I trained people to know about the whole thing.”
It’s not surprising, therefore, that Bird prefers the idea of HR administration being outsourced as a whole rather than via single processes to niche providers.
EDS, now marketing its HR operations through ExcellerateHRO Services, its joint venture with Towers Perrin, does offer specialist services, such as payroll. But Bird believes the greatest benefit of outsourcing comes from grouping all HR administration together and handing it over, allowing the retained HR function to focus on strategy and work with the business.
Over 15 years, she has dealt with all facets of HR, including industrial relations at British Gas and BASF, which she describes as “really good, in-your-face experience”. She moved to EDS in 2004 via Capital One and Barclays and took up her present role in October 2005.
Bird believes HR is changing. “The criticism of HR people is that they are not focused on the business. Outsourcing would enhance their careers because they would be focused on the right things,” she says.
Christian Marchetti, managing director, Accenture HR Services
A Frenchman who has worked for Accenture since leaving university is now in the driving seat of its HR outsourcing business. Christian Marchetti, who replaced David Clinton as managing director in September, believes the future for HR outsourcing is bright. He predicts that British and other western European countries will not only outsource all their pan-European or global HR operations but also move services to India and central Europe. He says there is “significant interest” in offshoring.
“I’m optimistic about the future,” he says. “In Europe, firms have been slow to outsource HR because of the complexity of the environment. There’s now more possibility for standardisation, offering better conditions for outsourcing.”
Marchetti acknowledges that there is a strong market for single-process outsourcing of HR components, such as payroll and recruitment, and says his company needs to increase its ability to team up with specialist providers.
However, he clearly sees the future for Accenture as continuing to grow global business based on transforming an organisation’s whole HR function. “A wider scope creates an ability to deliver more value to the client and execute a much wider transformation,” he says.He also expects more deals bundling HR and other functions, such as finance and accounting. Accenture has one such contract in the pipeline.
Marchetti joined Accenture in 1986 after graduating from the École Nationale de la Statistique et de l’Administration Économique. He spent 10 years as a consultant before joining the team developing Accenture’s new outsourcing business. His experience of outsourcing is wide, although limited in terms of HR.