Issue link: http://www.e-digitaleditions.com/i/94708
Regional Report Multi-process engagements, on the other hand, have not caught on in the Nordic region as they have elsewhere. The majority of outsourcing contracts inked have been on a function-by-function service basis, although Karppinen acknowledges that large global corporations with significant operations in the Nordics do have some multi-process elements in their HRO engagements. Langlois agrees. "Comprehensive outsourcing, where several HR functions are outsourced, is in an early phase in the Nordics, but growing," she says. "Technology has not yet supported the best practices in integrated HR processes, but that is changing as more companies express interest in comprehensive outsourcing solutions." Asked to back up her assertion, she replied that NorthgateArinso has experienced a "significant increase" in RFPs for comprehensive solutions this year, compared with prior years. "Our models range from managing and operating an existing HRIS environment to complete HRO BPO," Langlois says. "HRO does not need to be `all or nothing.' We believe hybrid outsourcing provides customers with choices and flexibility." Multi-country HRO engagements—the extension of a single-process assignment to cover more than one country—also is catching on. Given the differences in rules, languages, and especially currencies across the region, the trend towards payroll service delivery across several Nordic countries poses an "interesting landscape," Karppinen says, yet he sees this as an emerging trend. The public sector has yet to embrace HRO on a scale comparable with private sector companies. This is somewhat of a surprise, given the emphasis in the Nordic countries on social welfare, i.e., all those beneficiaries would arguably benefit greatly from HRO. "Overall, the public sector is not yet significantly using BPO, with the exception of Denmark," says Karppinen. The trend in the public sector at the moment, he adds, is to establish internal SSCs. "In Finland, a state shared service centre is already operational, and in Sweden the government is planning a similar operation," says Karppinen. He perceives the SSCs as a possible first-step towards public sector agencies outsourcing more widely to external service providers. "Some emerging signs exists that the public sector is starting to consider the use of BPO service providers," he explains, cautioning that it often takes a while for the public sector to shift its buying behaviour. Langlois has a similar perspective. "The public sector has yet to embrace HR outsourcing with the same enthusiasm as the private sector, but as public sector organisations continue to work to manage costs and optimise resources many are contemplating ways to use outsourcing to their advantage," she says. "This may signal positive market potential for the public sector in future." With regard to trends in play and what may be expected down the line in the Nordic countries, NorthgateArinso sees more organisations seeking vendors with cloud-based systems, in addition to mobile systems where HR is in the driver's seat. "We believe business process as a service, as we call it, has the potential to be just as significant a step-change to BPO as the emergence of cloud was to the on-premise software industry," Langlois says. "This will make BPO easier to consume, faster to deploy and easier to adopt than ever before." Karppinen from Aditro sees the HRO market in the Nordics growing steadily, with payroll BPO leading the way to other HRO services. He further sees tghe emergence of a more international scope to outsourcing assignments as bringing what he calls "an additional new flavour" to the market, "as HR functions will be more and global in large, multinational companies," he says. As elsewhere in the world, the cost imperative will continue to drive HRO implementaion trends in the Nordic countries. Although she was specifically talking about the Nordic region, Langlois could have been discussing any other country across the planet when she commented, "Outsourcing non-core routine tasks and business processes like HR allows companies to focus on their strategic core competencies, freeing up valuable resources to drive growth and innovation." Indeed, by not having to keep up with legislative and technological developments to ensure that systems and tools are up to date— whether in Sweden or South Dakota—HR can focus on more strategic issues like aligning human capital with strategic growth imperatives. The way it ought to be. FALL 2012 | www.hroglobal.com [35]