More Employers Planning to Change HR Structure to Improve Delivery of Services, Towers Watson Survey Finds
Survey shows growing/renewed interest in shared services; investment in HR technology remains strong
NEW YORK--(BUSINESS WIRE)-- Facing growing pressures to deliver HR services more efficiently and effectively, an increasing number of global organizations expect to change the structure of their HR functions within the next couple of years, according to an annual survey conducted by global professional services company Towers Watson (TW). The 15th annual survey on HR service delivery trends and practices also found that shared services has emerged as the most valued and prevalent process for delivering HR services to organizations. The Towers Watson survey also revealed that investment in HR technology is expected to remain strong and steady this year.
According to the survey, close to half (44%) of the 628 global organizations surveyed indicated they will change their HR structure either this year or next year. That is a sharp increase from the 28% of respondents who planned to change their HR structure last year. When asked what is driving these changes, nearly two-thirds of those planning changes said they want to realize further efficiencies, while roughly one-half are seeking to capture synergies among processes and investments, improve quality and lower costs.
After several years of relative stability in the HR function, the way HR services are delivered is changing, said Tom Keebler, global leader of Towers Watsons HR Service Delivery and Technology practices. Technological advances are pushing organizations to take advantage of much that the constantly changing technology and delivery landscape has to offer. Further, HR is pushing change by either growing into or being led to a more savvy approach. The bottom line is that HR is changing, with an eye toward delivering services more effectively and efficiently.
The survey showed that among companies making changes to their HR function, nearly four in 10 (39%) will move or revert to a shared services environment, while nearly one in three (31%) will bring additional services into an existing shared services organization. And just over one-fourth (26%) will outsource some or additional HR functions.
Large-scale HR business process outsourcing was all the buzz for nearly a decade. But organizations now realize that it pays to develop capabilities and resources in-house for many core HR services. Shared services allow companies to maintain better quality control, and create and adapt to new processes more quickly. This model also enables organizations to allocate resources according to functional need and business cycle, although this can be both a blessing and a curse, since the process often suffers at the hand of speed, said Keebler.
HR Technology Spending Remains Strong and Steady
The survey found that more than one-half of organizations (53%) indicated their investment in HR technology this year will match last years investment levels, while close to one-third (31%) will either increase or significantly increase their HR technology investments. Only 16% expect to spend less on HR technology this year.
Among those organizations planning to increase their investment in HR technology this year, just under four in ten (38%) plan to deploy additional functionality from existing vendors, while another 36% plan to upgrade or re-implement their existing HRMS. Meantime, one-third (34%) plan to expand their existing self-service offerings and replace older systems (33%).
It is encouraging to see a consistent level of increased HR technology spending over the past several years, especially in the wake of difficult economic times, said Keebler. Beyond the core costs of owning and operating technology, it seems that not only is HR technology seen as needed to play, but also that organizations recognize that investment in it is needed for them to remain current, expand capabilities and continue to improve operations.
Other key findings from the survey include:
- Talent and performance management systems remain the primary HR service delivery issue this year, with 40% of respondents citing these as one of their top three priorities. Streamlining business processes, recruiting and staffing systems, and greater involvement in strategic business-driven issues were cited by 22% as top service delivery issues.
- Six out of 10 organizations (60%) offer an HR portal to HR and employees. Another 20% are in the process of developing an HR portal.
- A single HR function for the entire organization remains the predominant model, especially in single-country organizations (72%), as opposed to global ones (32%).
About the Survey
The 15th annual HR Service Delivery Survey polled HR and HRIT executives from 628 organizations for their insight on topics and trends impacting the year ahead. More than half (52%) of respondents are large and mid-size organizations with more than 5,000 employees.
About Towers Watson
Towers Watson is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at towerswatson.com.
Ed Emerman, +1 609-275-5162
Binoli Savani, +1 703-258-7648
Source: Towers WatsonCopyright Business Wire 2012