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The Three Market Positions – You Must Choose One

First and foremost in dealing with growth you have to align with the needs of your customer, or your customer’s customer in the HR services industry. If you are not aligned with that you are not going to be able to grow, you’ve got to know what they actually want.

Second you have to be better, faster and cheaper. That’s what customers want from a transactional perspective, it’s a commodity and they want it better, faster and cheaper every year. Important also is to really recognize that customers do leave for mistakes, so the blocking and tackling is very important. It has to be done well, but it also has to be done at a much more efficient cost point than what you are doing today.

When you are doing that right, they will stay for service. There is human error there, it’s always going to happen, but if you are able to take your resources away from those low value-added tasks while you are growing and put them into customer service and hands-on consultative tasks, you will keep those customers.

How do you deal with growth? There are essentially two ways to go in the services industry, specifically HR services:
Automate – change your technology, look for tools that are going to make you more efficient,
Look for labor arbitrage – readily available in this global economy.

But we don’t think that doing one or the other is the answer. We try to accomplish both at the same time. Technology doesn’t always fill every gap, so labor and technology together is the best solution.

For example, we have a new customer who is growing rapidly and is basically out of space. We sat down with him and told him that from the payroll perspective, he needed to build capacity because of the growth he was experiencing. He simply couldn’t keep up with it. There simply were not enough cubes. So in this case, changing technologies is the first step he has taken and we helped with that conversion because it’s double duty from this system to that system. Going forward as he grows, he is going to grow in an outsourced solution with us rather than continuing to hire low value-added task process performers.

The keys to growth in this industry are recognizing the difference between low value-added tasks and high value-added tasks. The only way you are going to grow is to focus correctly on those. For the ticket-to-play items, we like to call it “making sausage” because nobody cares if they don’t see it, they don’t know it’s there and they just expect it to happen. More importantly you don’t get paid for it, those tasks are an expectation, a bottom line expectation of the product.

I often will ask customer’s a simple question, “You want to grow, that’s great, but what happens when you double the size of the company? Are you going to double the size of your employee base or are you going to find new ways to solve the problem?”

 

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