Savvy companies are investing in advances in HR service delivery as well as seizing opportunities to deploy sophisticated new technologies that can make the HR function more effective and efficient, according to a recently published survey report.
“Market trends in HR service delivery and technology can be summed up in a single sentence: More than ever before, possibilities to explore and opportunities for productive change abound,” global professional services company Towers Watson said in describing the results of its 2013 HR Service Delivery and Technology Survey.
The survey was fielded between January and March 2013 among 1,025 respondents from 32 countries and a broad cross section of industries, with the largest number concentrated in the manufacturing sector, followed by financial services, IT and telecom, professional services and retail.
“Without question, HR service delivery is in a state of change,” said Robert Zampetti, director of Towers Watson’s Asia Pacific HR service-delivery practice. “This means companies can change the game by modifying their structure, adopting new HR technologies and processes, and extending capabilities to the organization via manager self-service and shared services. In the end it means using new concepts, approaches and technology to provide better HR services.”
Making a Change
The survey revealed that more than one-third of respondent organizations (36 percent) intend to make structural changes to their HR function by the end of 2014.
Many companies are exploring service-delivery technology solutions as part of globalization initiatives. Just under 60 percent of participating organizations are operating with legacy HR management systems that were not designed to support global needs.
Regardless of why they’re making changes, almost half of those companies (49 percent) are moving toward a shared services environment with centers of excellence and business partners.
The shared services model offers improved HR delivery through a consistently applied HR and user experience, according to Towers Watson. Survey results show that the use of shared services tends to rise as business conditions and business structures become more complex.
“By centralizing key support functions in groups with specific domain expertise, the shared services model gives HR practitioners the opportunity to partner with the business on more strategic issues,” the report said. The migration to shared services supports the business, too, Towers Watson noted. “For the business, shared services provide a more consistent HR service delivery experience supported by a devoted HR function with the time and motivation to develop deeper business knowledge, and help solve HR issues.”
Streamlining HR Processes
The number of approvals for common HR transactions was cited as the most vexing HR delivery issue globally.
Thirty-five percent of respondents require two levels of approval for common HR transactions, a quarter require three levels, and 56 percent require HR to approve all basic HR transactions, according to the report.
Nearly half of respondents (47 percent) sought to re-engineer key HR processes in the past 18 months. Twenty-two percent have implemented a new HR management system (HRMS), while 21 percent have begun using new manager self-service (MSS) technology.
Most telling is the value achieved by making the changes, Towers Watson observed. More than 80 percent of organizations that re-engineered HR processes reported that results either met or exceeded expectations.
Effective process review also includes an exploration of whether certain types of work are better performed by an employee’s manager or the HR function.
“To empower managers through new processes and self-service technology, organizations need to cut the clutter by changing approval structures that create needless obstacles,” the report explained. “The best example is HR’s common inability to act on decisions already made, even when the technology is in place to quickly execute them.”
For example, 25 percent of organizations surveyed require four additional manager approvals to create a new position. About the same percentage require three additional manager approvals to set performance goals and results. And nearly half of all organizations still require that two managers approve employees’ requests for time off.
“HR is well-served by trusting managers to handle these processes at the lowest level possible,” said Towers Watson. “We’ve observed that with greater MSS capabilities, HR has relaxed its controls somewhat and is more comfortable, in the majority of cases, with simple notification for basic transactions such as goal setting, transfers and voluntary terminations.”
The Right Tech Can Enable True Innovation
Technology innovations can provide substantial value to businesses. Software-as-a-service (SAAS), mobile applications and portals help HR efficiently complete day-to-day work and complex transactions, according to Towers Watson.
Almost one-third of respondents (29 percent) plan to adopt a new HRMS in the near future. Among them, 88 percent are considering SAAS, the cloud-based software delivery model, as a replacement. The most prevalent technology choice is Workday, an SAAS solution that allows organizations to stay current on a sophisticated, cross-functional HR service-delivery platform without purchasing, implementing, configuring or updating the tool, according to Towers Watson.
Among organizations seeking a new system, more than a third (35 percent) are considering only SAAS solutions in their search, almost three times the percentage of those considering just an on-premise solution. About one-quarter of respondents (24 percent) are open to either solution.
Organizations that choose SAAS as a platform cite global capabilities, lower ongoing costs and the consistency of always being on the current version of the software. Regardless of the platform, costs and global capabilities are among respondents’ top three HRMS considerations. “We expect that SaaS solutions will continue to prove their value in the years ahead,” Towers Watson said.
HR is also catching on to the mobile technology trend. A majority of respondents (60 percent) now provide employees with mobile access via smartphone. Some 24 percent of companies provide tablet devices, while half that number (12 percent) operate a “bring your own device” policy. Only about one in 10 of respondents currently use mobile applications for HR purposes, however. But the numbers are trending upward, according to the survey: One-quarter of organizations plan to offer HR-enabled applications in the next 12 to 18 months.
Among the 10 percent of organizations offering mobile applications for HR purposes, the most prevalent use was for employee directories (40 percent) and time-and-attendance recording (38 percent). About one-quarter offer apps for expense management, recruiting and applicant support, and wage-statement viewing. Benefit enrollment, among the more sophisticated of available tools, is offered by 20 percent of organizations with HR-enabled mobile applications. Just under two-thirds of businesses using these technologies are generally satisfied with them, the survey found.
About 50 percent of organizations use a portal, primarily to enable employee self-service, but also to ensure compliance, communicate policy and increase collaboration. Another 19 percent are working to develop one. Nearly 70 percent of organizations with an HR portal provide access to 75 percent or more of employees.
Popular features include an HR knowledge base (60 percent), internal HR team sites (53 percent), onboarding for new employees (43 percent), Web-based summary plan descriptions (34 percent) and HR case management (30 percent).
Organizations with HR portals are generally satisfied with their results. Slightly more than 60 percent reported that their portal is somewhat effective, and 17 percent described it as very effective. “We predict that satisfaction levels will increase in the future as the technology and the information included in portals grow in sophistication and value to users,” Towers Watson said.
MSS Adoption Trending Upward
MSS is experiencing a surge in adoption, according to the survey. Respondents said that MSS creates many benefits for the organization, such as decreased cycle time and increased accuracy for HR transactions, manager satisfaction in handling transactions on their own, and a level of comfort for HR that work is being done properly.
About 66 percent of responding organizations use some form of self-service technology. Use has more than doubled in Europe and the Middle East (47 percent), as well as in Asia (37 percent), in recent years, but MSS remains most prevalent in North America (61 percent).
Roy Maurer is an online editor/manager for SHRM.
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