Employers Investing in HR Technology, Streamlining Structures, Survey Reveals

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By Caryn Freeman  

June 11 — One-third of HR departments plan to increase their spending on technology in the coming year, and the same proportion plan to make changes to their HR structure this year or next, according to a survey released June 9 by global professional services company Towers Watson.

“The 2014 HR Service Delivery and Technology Survey,” a poll of HR and HRIT executives at 1,048 companies from 45 countries, found that 33 percent of employers plan to spend more on HR technology in the coming year, with 23 percent in that group planning to increase spending by as much as 20 percent and the remaining 10 percent planning to increase HR technology investment by more than 20 percent.

“Despite cost cutting in some areas of HR, we are seeing a substantial spike in technology spending,” Mike DiClaudio, global leader of Towers Watson's HR Service Delivery practice, said in a press release announcing the survey. “Companies are realizing 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.”

DiClaudio told Bloomberg BNA June 11 that increased investment in HR technology helps companies gain a talent advantage by providing organizations with real-time data on their existing talent and offering easy identification of skills gaps that need to be filled.

“Employees are increasingly focused on working for an organization that provides them the tools they need to be successful, which includes consumer-grade technology used within the organization,” he said.

Streamlining Business Processes

According to the survey, 33 percent of companies are planning to make changes to their HR structures either in 2014 or 2015 to improve efficiency and quality.

The survey found that for the second consecutive year, streamlining business processes was the No. 1 initiative for HR.

More than half (55 percent) of respondents said they re-engineered key HR processes over the past 18 months, while just under half (49 percent) improved line managers' people management capabilities. About one-third (36 percent) of surveyed employers implemented manager and employee self-service initiatives, while 31 percent refocused the role of their HR business partners.

‘Software as a Service.'

The survey also found a continued increase in the use of “software as a service” or SaaS systems for core HR and talent management technologies. Businesses are increasing their use of SaaS systems to support further adoption of mobile technologies and utilization of HR portals, according to Towers Watson.

Nearly half of the respondents (46 percent) reported using mobile technologies for HR transactions, an increase from 36 percent in 2013, Towers Watson said. The survey noted that there is room for much growth, as only 10 percent of employers are using mobile access for a majority of HR transactions.

Meanwhile, 60 percent of employers have an HR portal in place, up from 53 percent in 2013, the survey said. Another 20 percent are in the process of developing a portal.

Additionally, the adoption of SaaS increased again this year, with 40 percent of respondents saying they are considering SaaS as their only solution.

Jonathan Sears, Americas HR technology practice leader at Towers Watson, told Bloomberg BNA June 11 that mobile capability and having an HR portal give employers the ability to engage applicants with critical details about a company's culture; mission, vision and values; and benefits, “ensuring that you're marketing the full employment value proposition rather than just one element.”

To contact the reporter on this story: Caryn Freeman in Washington at cfreeman@bna.com

To contact the editor responsible for this story: Simon Nadel at snadel@bna.com

The survey is at http://www.towerswatson.com/en/Insights/IC-Types/Survey-Research-Results/2014/06/2014-hr-service-delivery-and-technology-survey.