Analyzing expressHR’s International Business Expansion Change Management Strategies
expressHR is UK based leading provider of recruitment and resourcing solutions for today’s diverse and increasingly complex workforce. expressHR offers a fully integrated, seamless and intuitive system for vendor to workforce management, from front-office relationship management to back-office accounting, and encompassing most things in between. They offer cost-effective solutions, globally and across industries as distinct as finance and healthcare, using tried and tested implementation techniques with leading-edge, yet proven technologies.
Founded in 2003 with goal of enabling today’s leading recruitment and resourcing organizations to succeed in delivering tremendous results with great service. expressHR’s vision is to provide the technology to manage Recruitment Agency Supply Chains in support of any business model whether this is an MSP, RPO, PSL, Master Vendor, Vendor Neutral or direct. Keeping in mind that every end client is different, expressHR configure their system to cater for specific requirements of each end client yet still enable an MSP/RPO to operate one back office pay and bill system to process all timesheets efficiently and accurately from multiple clients with multiple front office systems and processes. They provide this as a Software-as-a-Service in the Cloud with minimal set-up costs and a transactional model that fits the business model of their Partners and customers. They process high volumes, extremely cost-effectively, so that their charges are kept low.
With an established client base of over 30 leading Recruitment Process Outsourcers (RPO), Managed Service Providers (MSP), Recruitment Agencies, Hybrid Recruiters and Payroll Bureau; expressHR has managed contingency spend of over £1 billion, processed more than 5 million timesheets and currently has over 1000 active users. Over the past 14 years expressHR has become the leading provider of Software as a Service (SaaS) to a wide range of businesses in the UK.
Besides being extremely efficacious in the UK, about a decade ago, they successfully expanded their business in Europe and a few countries in Asia – Pacific region. With a view of catering to their ever growing clientele, in 2014, they established their very own dedicated development center in India which handles all the product development, testing and implementation. They also expanded their client services & product implementation team in the UK. After successfully establishing business within the European and Asian continent, the management wanted to expand to the US market.
- Diagnosing Change
expressHR’s founder and CEO is a self-confessed “Old man of recruitment”. With over 30 years of experience in working within the recruitment industry his goal was simple to make recruitment software easy to use and affordable for all business of all magnitudes. For the past 14 years expressHR’s goal has been to “Enable today’s leading recruitment and resourcing organizations to succeed in delivering tremendous results with great service.”
The Boomer faction is typically referred to as one group, born between 1946 – 1964. While this generation is often referred as one cohort due to the significant change they effected, there is a distinct separation between the early and late baby boomers. (Werde, 2016) Being a stereotypical ‘early baby boomer’ (Tyler, 2017), the CEO has always been very goal-centric and even at the age of 68 continues to be focused towards the advancement of the business. He has been invaluable in shaping and developing the suite of expressHR’s product portfolio and is always ready to put in the extra push to ensure the business reaches the potential he envisions. He always believed in leading a team rather than dictating.
expressHR had previously been very successful in expanding their business within
Europe and Asia and were hoping of imitating their success in the US. As with any business decisions, the CEO created a team of individuals consisting of Upper Management and Departmental Heads to convey his vision for expansion. The CEO has always been a “coach” (Palmer, Dunford, Akin, 2009, pg. 30) when it came to introducing and implementing changes within the business. His complete belief in the fact that team-work is the key to success in any organization always meant that he would show complete trust in his team to shape and execute changes to match his vision. During his team meeting, he used McKinsey 7S Model (Jurevicius, 2013) to support his “selling the vision technique” (Palmer, Dunford, Akin, 2009, pg. 260) in order to highlight his vision of international business expansion and his expectations of desired aptitudes to achieve the goal.
Figure 1: McKinsey 7S Model
Based on the graphical representation of the model depicted above in Figure 1, the following assessments were made to ensure expressHR was proficient in handling the change:
- Mission: Expand in the US market to promote and sell expressHR’s products to business across the US and endeavor to be a major player within the recruitment software industry in the next 5 years.
- Strategy: Exploit the pre-existing gap in the market by offering small and medium sized organizations customizable, cost-effective and innovative recruitment software solutions as an alternative to the exorbitantly robust products currently available.
- Products and Services: expressHR will be offering their bespoke state-of-the-art Workforce Management System (WMS) and Vendor Management System (VMS) along with their innovative pricing plans to their target clientele in the US market.
- Team Setup: The business expansion team consisting of the CEO, CFO, COO, Product Development and Implementation Manager, Sales and Marketing Manager, Client Services Manager and the HR Manager. This core team will be responsible for implementing the expansion strategy. A third-party consultant will be hired to carry out market research and strategy analysis in due course.
- Team Participation Strategy: Weekly team meetings will be held by department managers to discuss strategy and implementation policies. Team managers will convey meeting feedback, suggestions and ideas to the core-expansion team for their perusal. Implementation, development and support teams will play a crucial role in brainstorming and sculpting the strategy.
- Additional Talent Recruitment: A local Sales, Training and Customer support team will be recruited to oversee new US clientele. The expressHR team closely with the new US team and will be responsible for training and handholding during the initial period of expansion. The Sales, Training and Customer Support teams will report to the Sales and Marketing Manager, the Product Development and Implementation Manager and the Client Services Manager respectively for the first 3 quarters.
- Additional Skillsets: Based on expansion strategy, the US partner (a US based recruitment software company or a hired Market Consultant) will be the market expert and will be actively assisting in decision making processes respondent to sales, pricing, marketing and other administrational processes.
After several team meeting and brainstorming sessions, an external Business Development consultant was hired to analyze the expansion strategy and help to create a comprehensive change implement strategy. The main aim of the Business Development consultant and his team was to assist the management to successfully expand in the United States. The team along with the management was responsible for carrying out market research and analysis, gap analysis, strategic inventory and pre-change audit to help formulate the change management plan.
- Market Analysis
Automated recruitment saves organizations time and money. According to a leading industry report in 2012, “the Global Recruitment Software market was predicted to reach US$1.6 billion by 2015” (Wood, 2012). During the initial market research carried out by the expressHR research team consisting of expressHR’s CEO and an externally hired research consultant, it was observed that according to industry experts, by 2020, more than 40% of the American workforce will operate as independent professionals not tied to a single office or company (IBIS World, 2013). As the number of contract, temporary, and independent professionals rises, the demand for efficient HR practices to manage the recruitment, fulfillment, payroll, and billing processes for these employees will significantly increase. In order to determine the market and investigate its strengths and weakness the following market investigation steps were taken:
- Defining the Market: For large organizations that regularly recruit new employees or organizations with a high employee turnover rate, automating recruitment is both beneficial and affordable but many small businesses or start-ups can’t afford the high cost of recruitment software. A major share of the US recruitment software market is targeted at mid-level or large scale organizations. When major market players in this industry like Bullhorn and iCIMS, target a certain section of the market, there is a small but untapped section of the market in the US that expressHR could target by offering a recruitment software that’s both affordable, bespoke and comprehensive. According to IBIS world, in 2013, the small and medium-sized business accounted for 51.3% of the US market accounting to a total revenue of over $2.1 billion.
Figure 2: Market Segmentation
- Assess Internal Capabilities and Market Entry Options: expressHR’s expertise of offering cost-effective software solution to small and mid-sized and that employ numerous temporary workers, which operate as part of the $4.1 billion HR and Payroll Software industry, will be viewed as a major asset. Besides having a general annual contract, expressHR also offers a pay-as-you-go model for business that need automated recruitment but don’t make enough annual hires to justify an annual recruitment software contract. This is a completely new innovate model that sets them apart from any other competitor in the US market. They also have an in-house software development team that will implement a bespoke solution for their clients with minimal turnaround time. According to prolific Business and Finance writer Leo Sun, the five basic options for a fledgling multinational corporation to expand in a new market are: Joint Ventures, Branches, Subsidiaries, Franchises and Turn Key Projects. Since Subsidiaries, Franchises and Turn Key Projects weren’t viable options considering the kind of business and the market they were operating in, the only two feasible options they had were Joint Ventures and Branches.
- Initial Gap Analysis
“Gap analysis is a very basic tool for reviewing an organization’s position. It is based on three questions: Where are we now? Where do we want to get to? How can we get there?” (Palmer, Dunford, Akin, 2009, pg. 121) Along with conducting an indepth market analysis the Business Development consultant and his team had a sit-down with the management to conduct a ‘Initial Gap Analysis’ to have a starting point which then sets the benchmark for ‘Need-Gap Analysis’ once the change is successfully implemented.
- Identifying Strategic Objectives
- Expand and capture the American Market.
- Exploit the gap in the current market.
- Introduce expressHR’s innovative pricing models to contest current market pricing trends.
- Identifying Current Strengths and Weaknesses
- Highly Customizable solution.
- Product modeled on the highly sought after Software-as-a-service trend.
- Web-based solution allows for true universal accessibility
- Innovative pricing models like ‘pay-as-you-go’, ‘no-win-no-fee’, ‘pay-as-you-change’, monthly payment plans and annual contracts.
- Seamless integration to third party software
- User friendly and easy to use.
- Cost and Time effective.
- 24/7 customer service.
- expressHR team is a tight knit unit who’ve been colleagues for a long time.
- Wide range of expertise and diverse skillsets within the team.
- No in-house development team.
- Off shore development team in India.
- No apps for mobile devices.
- Create a Plan of Action
- Identify target market.
- Inventory resources to identify limitations.
- Map the gap.
- Exploit competitive advance.
- Select the appropriate implementation strategies.
- Implement selected strategy.
- Strategic Inventory
The management team was given the task of conducting a strategic inventory of the business to identify if the organizational strengths stated in the Gap Analysis can play a significant and pivotal role in implementing the change. The following questionnaire assisted the team recognize their fortes an in turn helped them sketch an implementation plan that plays on their strengths.
- What is the current operating industry?
HR & Recruitment
- What products-services does expressHR offer?
Applicant Tracking System (ATS), Workforce Management System (WMS), Vendor Management System (VMS), Integration with job boards, Timesheet Management and Permanent, Temp and Contract Hiring Management.
- Who are the target customers?
Anyone who needs automated HR and Recruiting services.
- What kinds of things are important to the target customer?
Fast, Cost-effective, Efficient solutions.
- Who is the ultimate end user?
HR Managers, Recruitment consultants, Line Managers and Hiring Managers.
- What kinds of things are important to the end user?
Swift, Automated, User friendly and Customizable solution.
- Who are the market competitors?
Bullhorn, iCIMS, BambooHR, Kronus, Fieldglass and many more.
- Who are the direct competitors?
No direct competitors per say, some competitors like Resumate, Recruiterbox and Jobvite incorporate some aspects of what expressHR offers.
- What are their strengths?
Workforce Planning, Sourcing, Candidate Acquisition and Analytics.
- What are their weaknesses?
No customization, not web based, Recruitment focused, not interlinked to the HR system, no flexible payment plans.
- What are the key success factors of the most successful competitor?
Pre-established Brand image, Industry experience, Customer loyalty, Strong industry network.
- How does expressHR measure up?
Unique features, Innovative pricing, Acquiescent to client requisites, Cohesive with other software/solutions/tools.
- What are the key competencies required to compete in this industry?
Cost effective, Autonomous, Adaptable and Innovative solutions.
- What is expressHR’s competitive advantage?
Pioneering pricing models and Tenacious customizability.
- Diagnosing Readiness to Change
Statistically, 70% of change management initiatives fail (Leeman, 2015). In order to avoid being a part of this dreaded statistic, it was imperative to evaluate the readiness of the organization for successfully embrace the expansion initiative. The CEO emailed (see Appendix A) all UK team members a pre-change audit questionnaire (see Appendix B) to gauge the team’s perspective on where the organizations stands when it comes to the readiness for expansion. The response to the questionnaire not only proved to be a key indication of the likely outcome of the expansion initiative but also helped the CEO recognize crucial areas of weakness that would require significant intrusion to boost the prospects of success.
- ANALYSIS OF THE CHANGE STRATEGY
- Analyzing the Change
- Pressure to Change: Organizational Growth and Market Saturation
- Analyzing the Change
In 2008, the CEO realized that the UK market was saturated and the number of new clients was on a steady decline. When an existing product market or industry is saturated, the only logical step for any business is to explore new markets. He planned and executed international business expansions: first in Europe then in Asia in 2010. After he noticed a similar market saturation trend in both the new markets, he strategized a new expansion plan for a new market. One of the key motivations for the expansion was a stable revenue stream from an existing loyal client base and the limited ability to attract new customers.
Upon doing some personal market research, the CEO noticed a gap in the American HR and Recruitment Software market. He noticed that there were several big and small software companies offering a wide range of rigid, non-customizable solutions from HR Software to Talent Acquisition to Analytics, but noting that combines HR and Recruitment. He also noticed all major market players had similar pricing models and none of them gave the client any flexible payment options. Spotting a gap in the market is a key challenge for any business that wants to stay competitive and the CEO decided to take advantage of the pre-existing gap.
- Forces for Change: Competitive Advantage
Michael Porter identifies 2 basic types of competitive advantage: cost advantage and differentiation advantage. (Porter, 1998, pg. 217)
- Cost advantage: Porter argued that a company could achieve superior performance by producing similar quality products or services but at lower costs. With expressHR’s innovative pricing models, they could offer clients, especially small and medium sized business who cannot afford the overpriced annual contracts, cheaper alternatives to solutions the market leaders offer.
- Differentiation advantage: Differentiation advantage is achieved by offering unique products and services and charging premium price for that. Customers are willing to pay higher price only for unique features and the best quality. expressHR offers completely customizable solution with unique features and a cohesive product that integrates with third party software/solutions/tools.
This analysis proves that expressHR had both cost and differentiation advantage when it comes to exploiting the gap in the market.
- Expansion Strategy
Keeping in mind the findings of the market research, expressHR used a pseudo-version of Kotter’s Eight-Step Change Management Model (Palmer, Dunford, Akin, 2009, pg. 224) to analyze, implement and evaluate the entire business expansion process. Figure 3 below shows the generalized flowchart used by the research team to formulate a strategy based on their research.
Figure 3: Kotter’s Eight-Step Change Management Workflow
- Plan A
Market analysis eluded to the fact that, as a general rule of thumb, when entering an entirely new market, with limited core assets to leverage, a joint venture or partnership is the ideal path to follow as it makes target identification, prioritization, due diligence, deal negotiation and closing new business easier. In 2012, the CEO of expressHR was trying to collaborate with US businesses offering Software-as-a-Service (SaaS) within the HR & Recruitment Software module. The CEO was planning a merger with staffing software giant Bullhorn for a possible joint venture. Bullhorn provides cloud-based CRM solutions for mid-level and large scale businesses. With a loyal client base of over 7,000 companies Bullhorn was already an established name in the industry. What they were lacking was a more robust and customizable software that would cater to small businesses.
The partnership was initially intended as a way of pooling the business talents together to leverage their combined skills and knowledge in order to effectively cater to the new untapped market. Being the big business guns, Bullhorn tried to treat the partnership as more of a vehicle to make money. Their motive was monetary remuneration and they were not very concerned with having a well-defined structured vision or an effective purpose of existence.
- Plan B
When the management hit a dead end with collaborations and partnerships, they decided to open a new branch of expessHR in the US. The management believed that while other payroll and employee records management platforms will compete with expressHR for market share, the company’s unique market positioning, ability to significantly reduce HR costs, and feature-rich customizable platform, will allow expressHR to quickly become an industry leader. But this was easier said than done.
While a non-resident would have to go through all the same steps as a resident, there were additional complications for an international business trying to set up a new entity in the US. For most non-residents, international tax law, getting visas and opening a bank account present the most complications. In order to avoid dealing with extra international roadblocks, the CEO contacted an ex-employee who had relocated to the US to act at the focal point of contact in the US through the expansion.
- High-level Implementation Strategy
The CEO has always identified himself as a “coach” when implementing any kind of change. His ideology has always been to influence the team to change rather than force them to accept the change the management thrusts on them. Therefore, his management style has always been of shaping employee behavior by encourage them to take more of a front running role in the expansion process by involving them in every stage of the implementation. Predominantly Acting as a Change Manager imbibing the coach image of change, his overall implementation strategy mirrored Kurt Lewin’s model of change (Palmer, Dunford, Akin, 2009, pg. 195) depicted below in Figure 4.
Figure 4: Implementation Strategy using Kurt Lewin’s model of change
- Unfreezing: After successfully expanding in the European and Asian markets, The CEO wanted to target expanding into the American market and therefore decided to consult his team for their opinion. The team had already gone through a similar change twice previously and had been through the entire change management process before. It didn’t take the CEO and the management a lot of convincing to do, to get the UK team onboard. Survey the organization to understand the current state. A business expansion team was consisting of the Department Managers, COO, CFO and the CEO who decided to take up the role of the ‘Change Manager/Practitioner’. The team decided to hire an external business development team to help with the analysis and inculcation of the expansion strategy. The external team was responsible for conducting the market analysis whereas the Business expansion team worked on the Gap Analysis and Strategic inventory. The other members of the UK team were made to fill out a pre-audit questionnaire to determine the readiness of the organization to undertake the proposed change.
- Change: Once the results of the initial analysis was assimilated, it was discussed with different teams within the organization depending on their field of expertise. The teams were also responsible for evaluating the results for their accuracy and discovering opportunities and obstacles the organization may face. The Business expansion team had been working in parallel with the discovery phase to formulate a basic strategic business expansion plan. Weekly team meetings and monthly organization meetings were conducted to ensure everyone was on the same page. A lot of times these meetings proved to be quintessential in answering questions, highlighting concerns, dispelling rumors and quashing doubts. As with every other process within the organization, the expansion was also treated as democratic process where every member of the team was considered a vital cog in the implementation of the change. Every team member was empowered with the opportunity to ask questions, voice concerns and give suggestions. A business expansion plan was articulated and implemented. When ‘Plan A’ failed to reach fruition, the contingency plan titled ‘Plan B’ was implemented successfully.
- Refreeze: Upon completion of the change, another gap analysis was performed to evaluate the successes and shortcomings of the strategy. The team identified the factors that helped sustain the change and the barriers that may have hampered the progress of the change implementation. The team was also instrumental in developing practices to sustain the change by ensuring constant support and feedback, creating a reward system to boost employee morale and constantly adapting the organizational structure as necessary.
- Developing Political Support
Change often means shifts in power across all management levels, functions and groups. To be successful, the change effort must enlist the aid of all key power players, from upper management to subject matter experts and any other team member recognized as having strong expertise, integrity and influence. (Authenticity Consulting, n.d.). Any change in the organization is always communicated to the entire team regardless of what the management believes the response of the team to the change will be. The management has always run the organization as a transparent entity where all team members are valued equally. The team has always been close-knit and have been colleagues for a long time, so the organization has never faced power struggles. The CEO at the initiation of the change employed a strong mechanism for ensuring alignment of authority with the change effort which consisted of the following steps:
- Identifying Power-players: Besides the CEO, the CFO and the COO, the management created a list of all the team members they considered to be the ‘power-players’ in the organizations. “Managers have power to motivate, inspire and lead.” (Managers: Your Development Power Players, 2016) The power-players in expressHR were the Product Development and Implementation Manager, Sales and Marketing Manager, Client Services Manager and the HR Manager. Besides being the authoritative force in the organization, the team not only venerates the managers but also trusts them.
- Influencing Them: After the staff meeting, the management held a core-team meeting with the managers. During the meeting, the CEO ensured all the managers were completely onboard with the change initiative and then involved them in developing the vision and researching the best methods to achieve the vision. They were also put in-charge of team communication about the status of change.
- Developing a Power team: The new team comprising of the CEO, the CFO, the COO and the managers was christened as the ‘Business Expansion team’. This team which acted as a close-knit network of power-players who interact with and count on each other to support and guide the change effort. The management guaranteed any recommendations or concerns expressed by the members of this team will be promptly recognized and worked through.
- Managing Resistance to Change
The CEO had the opinion that there is going to always be some resistance when it comes to implementing a new change. “Resistance is something that needs to be recognized and expected as change takes people out of their comfort zone.” (Palmer, Dunford, Akin, 2009, pg. 159) Recognizing resistance isn’t always easy because it isn’t always blatantly obvious. When the expansion idea was first discussed with the staff, the members of the development team in India were less than enthusiastic. Their resistance stemmed from the fact that they perceived the change as a ‘Negative Effect on their Interests’. They saw this change as an increase in their workload. Their perception of the change was: putting in longer hours, having to do more with the same monetary situation and under increased pressure to perform. The management team took a leaf out of Kotter and Schlesinger’s Methods for Managing Resistance to Change to come up with the following strategy:
- Recognizing resistance: The management team recognized and acknowledged the development team’s concerns and objections.
- Discuss concerns: The management team had a number of meetings with the teams and the team leads in order to figure out how their concerns can be addressed.
- Understanding concerns: Once the concerns were addressed, the team sat down to figure out how their concerns ad objections could be resolved.
- Resolving resistance: The management team decided to involve the business development team and asked the development team leads to act as the team representatives in the discussion rounds that ensued. The aim of the discussions was to find a shared solution to their concerns. The key concern they had was the increase in the team workload. The management team assured to make additional hires if they thought their workload was increasing. They were also promised bonus, conditional on the organization making their first sale in the US. The management team suggested the development team work overtime for a couple of days every month to manage their workload and meet client expectations at the same time. A fair monetary compensation was also agreed for the overtime hours which comforted the team and helped resolve their issues with the change.
- Generating momentum for Change
Initiating change is half the battle, the difficult part is building momentum to get the change to stick. Generating momentum maintains enthusiasm about the change and stops people from wearing down. The management’s plan for generating and sustaining momentum was:
- Communication: Once all the staff was onboard and the change process wheels were set into motion, the department managers (team leads) had weekly team meetings where they would discuss the progress and answer any concerns and objections the team members had. They would also discuss how the ongoing change is enriching the work experience individually and the managers would ensure their team is motivated and pleased with the role they’re playing. The management team would hold monthly staff meetings to ensure the staff felt like they were being listened to and impress on them the value of transparency in the organization.
- Celebrating Milestones: Reinforcement is key to building and maintaining momentum, so the CEO would send newsletters highlighting milestones reached in the project and would often bring in refreshments or take the team out to dinner to celebrate small successes to make sure the team morale stays high and the enthusiasm is retained.
- Rewarding Hard-work: The management team promised bonuses to the staff contingent on the successful implementation of the strategy and also announced special reward to the MVP of the implementation.
- Performance Assessment
- The Change Manager: The role of the CEO as the change manager was to promote change through the implementation of established strategies and motivate team members to achieve their end goal. The CEO played an extremely important role in the successful execution of the change. He was proactive and was constantly monitoring the process to uncover any deficiencies or shortcoming. He always ensured that the best possible methodologies were used and all strategic implementation was done efficiently. With his eye for detail, creativity and zeal for results made him or her irreplaceable commodity within the organization and made him the focal point of the entire process.
- External Business Expansion Consulting Team: External consultants were hired to be independent advisers and give their unbiased opinion on the proposed change. The team had a wide range of knowledge and skillset when it came to things like market analysis, creating brand awareness, projecting sales figures and formulating strategies. They brought a fresh perspective to the internal working of the organization.
- Business Expansion Team: This core team was responsible for implementing, monitoring and evaluating the expansion strategy. The team worked closely with the staff and the external consulting team to formulate, implement and successfully execute a well planned expansion strategy. The team was also effectively handle all forms of communication and was instrumental in handling grievances and solving issues plaguing the staff.
- UK Team: UK team have always been onboard with the change and their stellar performance before, during and after change is an ode to that. They were not only the key players during the implementation but also collaborated with the development team to ensure they didn’t have an increased workload. Due to the team’s close-knit nature, they shared responsibilities from time to time to ensure performance and quality of work wasn’t hampered. They made sure they regularly communicated with their managers and addressed any concerns they had.
- Development Team: Even though the development team was the last team to accept the change, they played their part with conviction and complete sincerity. With strong, hands on support from the UK team, they collaborated with the expansion team and the UK team to develop ‘demo systems’ for the sales team in the US to demonstrate to potential clients. Some of the team members excelled at effectively handling change and they were in turn promoted to team-leads. The development team ensured they regularly communicated with the UK team and the expansion team to keep everyone in loop with the activities and progress the team was making.
- Monitoring Change
The management team has always considered monitoring and evaluating strategy implementation to be as important as the process of implementation itself. The prime advantage of monitoring and evaluation is to ascertain that the organization is following the direction established during strategic planning. The following monitoring and evaluation plan was implemented to ensure that the implementation strategy was on track:
- Documentation: Documentation is the key to success. The strategic plan document clearly chalked out roles and responsibilities of each team member along with who is responsible for achieving every goal and objective. The management team wanted the department managers to regularly report to the CEO about the status of implementation, including progress towards each of the overall strategic goals.
- Regular Reviews: Bi-weekly reviews were carried out to monitor implementation of the plan. The department managers have to ensure their team follows procedures and documents their progress. The management team discussed the results of the review on a monthly basis.
- Issue Log Monitoring: A project issue log was created to record concerns or issues which are not immediately solvable or actionable. The frequency and severity of issues were monitored to detect snags or glitches and predict if and/or when the team might experience sudden increases of issues.
- Surveys: The staff was made to fill out questionnaires regularly to monitor critical elements associated with organizational change to provide a more structured approach to monitoring organizational change risks. By conducting the survey at regular intervals and comparing result from survey to survey, the management team was able to promptly identify areas which require more attention and intervention. (see Appendix C)
- RESULTS AND OUTCOMES
- Change Outcome
- Change Outcome
After the initial Market Analysis, the best option of international expansion was determined to be partnering with an established business to utilize their market expertise and reputation to sell expressHR’s products. According to the initial agreement with Bullhorn, they proposed using their industry knowledge, brand loyalty and experienced in-house sales team to sell expressHR’s products to small and medium sized businesses. As per the agreement, expressHR would have been responsible for training new clients, product development and support. In return for using their sales team and brand name, expressHR would have to give Bullhorn a certain percentage of their earning. The management team was assuaged with the agreement because they would not need to make any large financial investments or excessive due-diligence to create brand awareness, networking, new international hiring or marketing as Bullhorn would do what it took.
Pursuant to the initial agreement, expressHR had the following Expected Outcomes:
- Target Market: Target Market is the customer group that will most likely aspire to purchase products or services that the business intends to sell. (Ward, 2016) Owing to the nature of the product, even though it is primarily intended to be tailored to the HR and Recruitment industry, it can effectually be used by any business that does in-house recruitment.
- Customer Profile: Customer profile referrers to is a comprehensive snapshot of the business that is targeted as a potential client. (DeVault, 2017) Predominantly, businesses that would benefit the most from expressHR’s products were small and medium sized businesses. Small businesses are categorized as businesses with 0-250 employees, with an annual turnover of $7 million or less. Medium sized businesses are categorized as businesses with 250-500 employees, with an annual turnover of $35.5 million or less.
- Measurable Performance Matrices: A performance metric measures an organization’s behavior, activities, and performance. For measuring financial success, Sales Turnover, Net Profit, and Sales Volume/Order Intake Matrices were formulated. In keeping with the generated matrices, the expected Annual Sales turnover was $350,000 earning a net profit of $43,000 and an estimated Sales volume of 35 clients.
- Workforce Requirement: Based on the market analysis, Bullhorn’s expertise and the estimated performance matrices, the management team was able to frame a new workforce plan that determined if any additional hires would have to be made and also outlined concise new roles and responsibilities of all team members. The new workforce planned was developed in the following stages:
- Analyze implementation plan
- Perform workforce assessment
- Estimate demand data
- Calculate workforce requirement based on demand data estimates
- Compare new demand and present supply data
- Develop the work-force plan that meets new demand requirements.
- Communicate and implement the work-force plan
After the Bullhorn tie-up failed to materialize, the management had to implement their contingency back-up plan. This pushed expressHR’s international expansion plans back by 6 months. As per the new plan of action, they had to form a whole new organization and operate it as an US based associate company. expressHR LLC was launched in June 2014, in Scottsdale, Arizona, after successfully completing the change management cycle. The new plan comprised of adding in a lot more financial investment and considerable more investment of time as now, they would be responsible for running all the operations by themselves. Besides having to open a new branch, the new business needed to hire local sales and marketing talent to ensure the new staff had market knowledge and were able to network with resident businesses. The management had to essentially, do all the leg work themselves from because they were starting from ground up.
Pursuant to a new plan of action, expressHR had the following Actual Outcomes:
- Target Market: expressHR’s current clients include small and medium sized businesses mainly operating as Recruitment Consultants and Staffing Agencies. Their award winning WMS helps recruiting firms with Reporting and Analytics, Invoicing and Payments, Candidate Sourcing and Applicant Tracking. The current client’s area of operations is in line with what the expected outcome was.
- Customer Profile: Predominantly all of expressHR’s existing clients are small business employing less than 50 people and an annual revenue of less than $2 million. What enticed these clients were the different transactional pricing models they were offered and the customizability of the product. They are currently trying to win over a large non-profit Healthcare company, based in Phoenix.
- Measurable Performance Matrices: The management team had to make changes to their projected Sales Turnover, Net Profit, and Sales Volume/Order Intake Matrices to reflect the new financial estimates in-keeping with the new contingency plan. The new expected Annual Sales turnover was $100,000 incurring a net loss of $17,000 and an estimated Sales volume of 25 clients.
- Workforce Requirements: When the contingency plan was implemented, the workforce requirements increased considerably. The management team was able use the same workforce plan to determined the additional hires and the new roles and responsibilities of all team members. Decorous to the implemented contingency plan, the following new hires were made:
- espressHR LLC Management
- Operations Director
- Accounting and Finance Manager
- HR Manager
- Sales Manager
- Sales Executives
- Marketing Manager
- Marketing Executive
- Unplanned changes
The change management plan has provisions for possible unplanned outcomes which included contingency plans for each possible unplanned scenario. The key objective of this expansion was entering the untapped American Market to exploit the gap in the current market. The contingency plans built in to the implementation plan ensured successful achievement of the key strategy objectives. Besides effectively accomplishing over 90% of their change goals, there were some unplanned changed that partook the expansion.
- Market Expertise: The initial implementation plan had provisions for partnering with a pre-established American business that enabled expressHR to exploit their market expertise. After the partnership fell apart, the management team had to hire industry experts to act as business expansion consultants during the commencement of the new business.
- New Branch and Additional Workforce: The new branch and additional workforce was categorized as an unplanned financial investment that threw a wrench in the sales and return-on-investment figures. The new Operations Director was expected to act as a liaison between expressHR and all other external consultants and service providers. It was imperative to ensure a smooth flow of relationships and tasks to ensure all deadlines were met and the new branch was emulating the home office physically and culturally.
- Building Brand Awareness: Similar to the situation of market expertise, expressHR had to hire an external marketing team that helped them generate an effecting Marketing plan which included creating brand awareness using social media, attending networking events, mailing out brochures and sponsoring local events.
- Wider Target Market: Partnering with Bullhorn was contingent on expressHR signing an agreement on not going after Bullhorn’s target market. They did not want expressHR’s product cannibalizing their existing client-base. With Bullhorn out of the picture, expressHR was free to pursue a wider market even targeting large bossiness thereby directly competing with Bullhorn.
- Forming new status quo: One major positive impact this new change brought to expressHR was that the new branch expansion made the business evaluate processes and structures within the organization that had been “taken for granted” for a long time. This change gave them an opportunity to question the efficiency of their organizational operations even providing opportunities to improve them.
- Business Control: Now that they didn’t have to worry about all the rubrics of the agreement with Bullhorn, expressHR had more control over their operations. The partnership would have essentially handed over all operational and sales control to Bullhorn. They don’t have to share their profits and revenue with any other business so they can be in charge of their financials.
- Reaffirming Global Presence: expressHR is now a global business in it entirety with physical branches in the UK, India & the US. They have formed a very good team of sales and marketing experts in the US that work well with UK and development team.
- Enhanced Employee Morale: The technical team in the UK are responsible for providing complete hands on training to the staff and clients in the US. This new international relationship has opened new avenues for the team in the UK to visit a new country, explore and learn about new work cultures and interact with a new team. This expansion has provided the UK team with an understanding of a new market which has enabled them with a unique skill set while adding a feather to their cap of pre-existing skill sets.
- Additional Time and Financial Investment: expressHR spent a considerable amount of time and money initially since they had to build everything from ground up. The initial business set-up took six months, which meant their planned timeline had been delayed by six months.
- Increased Employee Workload: The development team had to work overtime until new hires were made. New hires depended on new clients and with the sales process now essentially starting from scratch, there was growing uncertainty over how many new hire would be required and in what departments. The UK team had to play the same role to two different teams in the UK and the US. This entailed an increase for the workload for the UK team too.
- Acquiring New Partners: expressHR offers third party integrations like integration with Payroll Services, Job Boards, Resume Parsers, E-Signers etc. It proved to be an uphill task finding the precise local strategic partners that fit the bill.
- WRAP UP
WRAP-UP – 10 points
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