Companies around the world are planning to increase and redirect their investments in HR technology as they embrace talent management solutions, HR portals, software-as-a-service (SaaS) systems and mobile applications, according to an annual survey by global professional services company Towers Watson. The survey also revealed that about one in three companies plan to change their HR structure in an effort to improve both efficiency and quality.
The 2014 HR Service Delivery and Technology Survey, a global survey of 1,048 companies, found that one in three respondents (33%) plan to increase HR technology budgets this year by up to 20% or more compared with the previous year. Only 15% plan to spend less on HR technology in the coming year.
“Despite cost cutting in some areas of HR, we are seeing a substantial spike in technology spending,” said Tim Richard, Towers Watson’s HR Service Delivery practice leader for EMEA. “Companies are realising the value that consumer-grade technology brings to HR and are willing to make smart investments that can grow and evolve with the business. It also appears that companies are splitting their investments between core HR systems such as talent management and payroll, and next-generation technology including HR data and analytics, and integrated talent management systems.”
The survey also found a continued increase in the use of SaaS systems for core HR and talent management technologies, further adoption of mobile technologies and use of HR portals. Nearly half of the respondents (46%) reported using mobile technologies for HR transactions, an increase of 10 percentage points since 2013. The survey noted that there is room for much growth, as only one-in-ten (10%) are using mobile access for a majority of HR transactions. Meanwhile, 60% of employers have an HR portal in place, up from 53% in 2013. Another fifth (20%) are in the process of developing a portal. Additionally, the adoption of SaaS increased again this year, with 40% of respondents saying they are considering SaaS as their only solution.
One in three companies planning changes to HR structure
The survey revealed that one in three companies are planning to make changes to their HR structures either this year or next. For the second consecutive year, respondents identified streamlining their business processes as the number one HR initiative. More than half (55%) of respondents said they reengineered key HR processes over the past 18 months, while roughly half (49%) improved line managers’ people management capabilities. Over a third (36%) implemented manager and employee self-service initiatives, while a similar proportion (31%) refocused the role of their HR business partners.
“Organisations are narrowing their focus on HR initiatives as they attempt to strike a balance among people, processes and technology priorities. We attribute this shift to high-impact HR investments, such as streamlining business processes and implementing manager self-service, to a commitment to running the HR function more like a business,” said Tim Richard.
Other key findings from the survey include:
- Manager self-service. The adoption of manager self-service tools increased dramatically worldwide. Seventy-one percent of North American organisations are using manager self-service tools this year, compared with 61% in 2013. Similar adoption increases were experienced in Asia Pacific, and Europe, the Middle East and Africa (EMEA). Worldwide, 60% of organisations want to increase their use of manager self-service tools in the future
- Employee engagement surveys. Nearly two-thirds of companies (63%) regularly conduct engagement surveys and use the data to direct people investments. Companies that conduct engagement surveys have twice the satisfaction rate with the implementation of new technology, compared with companies that do not conduct surveys.
About the Survey
The 17th annual HR Service Delivery and Technology Survey was conducted in March 2014. Respondents included HR and HRIT executives at 1,048 organisations from 45 countries. Two-thirds of the respondents were large or midsize organisations with more than 5,000 employees.