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Simplifying BPO for HRO

Like most things in life and business, we seem to make them much more complex than they are, but the true skill is finding an easy way to explain it to someone.

Everything in a business, specifically for a Human Resource Services company, is a process. We may not have all our processes documented or completely understand each process, but there are people (a.k.a. Process Performers) across departments and all other kinds of space and time who can work together to create an output.

The best way to understand most things, at least for us reformed Finance people, is by using a great example that crosses both Operations and Accounting like the dreaded Benefit Reconciliation.

So, here is how it goes and what BPO can do for you.

Today, your process has five steps:

  1. Get carrier bills and run payroll reports.
  2. Build a recon, probably in Excel, and find differences.
  3. Research those differences and identify adjustments.
  4. Adjust the bills and update the payroll deductions.
  5. Pay the bill on time, correctly, and with adjustments included.

The trick is that these steps can be categorized in two categories:

  1. High value-add with client or employee contact.
  2. Low value-add or transactional and repeatable.

When you do business with an excellent BPO, you own the process. You and the BPO sit down to mutually agree on which of the two categories those five steps belong in. There should be no emotion in the use of high and low, just a realistic understanding of how your client sees them.

So, if we are honest with our collective selves we decide the following:

  • Gathering invoices, running reports, building Excel models, finding an easy adjustment like a terminated employee, providing adjustments, and changing deductions are seen by your client as a transactional part of your job. Kind of like getting a C on a math exam. These are low value-add.

Talking to your customer about a tricky situation where an employee may have made a bad choice or how you just got them $5,000 back from Aetna is what we would call high value-add.

Without getting fancy and using terms like “swim lane”, we have basically figured out what tasks your BPO should do for you (low) and the ones you should focus your best people on (high). You take the high road, your BPO takes the low road, and all of the sudden you found a way to get to your destination faster and cheaper.

What do you get by doing this? Well, typically we find that you get three things:

  • Cost savings of about 60 percent on the Benefit Reconciliation process.
  • Productivity gain of about 20 percent as transactional tasks are at the BPO.
  • A greater focus on sales and service, not spreadsheets.

This is true of any process, just in different units and flow charts, but the same structure. Learn more atcognethro.com. When you are ready, we will put numbers to this bad boy and set the expectations of what you can expect to the penny and minute.

 

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