Changes On The Horizon For HR Structures, Service Delivery

Some big changes may be in store for corporate human resource functions within the next two years as companies face mounting pressure to improve the delivery and effectiveness of human resources (HR) services, according to research from Towers Watson. The 2013 HR Service Delivery and Technology Survey also found that companies are considering new HR technologies, will continue to invest in HR technology such as mobile applications, and plan to analyze and change their HR processes.

Towers Watson found that 36 percent of companies will make a change to their HR structure before the end of next year. Among companies changing their HR structure, 74 percent are doing so to realize further operational efficiencies, while 53 percent are doing so to improve quality. Another 37 percent are seeking to achieve cost savings, and 34 percent are pursuing a change in business strategy.

Regardless of reason, organizations that are changing their HR structures are overwhelmingly moving toward shared services. Almost half (49 percent) are moving toward a shared services environment with HR centers of excellence and HR business partners. The survey noted that the shared services model is the most prevalent among available options, followed by organizations’ intent to outsource additional functions (17 percent), or move to a single HR function for the entire organization (12 percent).

“Companies have been carefully examining both their HR structures and the way HR services are being delivered, and many have come to the same conclusion: The time is ripe for change,” said Mike DiClaudio, global leader of Towers Watson’s HR Service Delivery practice. “Many organizations see new opportunities to increase HR’s strategic contributions to the business. What is really interesting is the continued trend toward replacing core HR systems, and a willingness to invest in new technology and partners with a growing shift toward software-as-a-service.”

According to Towers Watson, HR technology spending remains steady and strong despite cost reductions in other areas of HR. Fifty-three percent of organizations indicated their investment in HR technology this year will match last year’s investment levels, while 27 percent will either increase or significantly increase their HR technology investments.

The survey contains responses from 1,025 companies. For more information, visit http://www.towerswatson.com.

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