Companies Worldwide Spending More On HR Technology

Companies around the world are planning to increase and redirect their investments in human resource (HR) technology as they embrace talent management solutions, HR portals, software-as-a-service (SaaS) systems and mobile applications, according to an annual survey from Towers Watson. The 2014 HR Service Delivery and Technology Survey also found that about one in three companies plan to change their HR structure in an effort to improve both efficiency and quality.

According to Towers Watson, 33 percent of employers plan to spend more on HR technology in the coming year compared with the previous year. This includes 23 percent that plan to increase spending by as much as 20 percent and 10 percent that plan to increase HR technology investment by more than 20 percent. Only 15 percent 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 Mike DiClaudio, global leader of Towers Watson’s HR Service Delivery practice. “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.”

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 utilization of HR portals. Nearly half of the respondents (46 percent) reported using mobile technologies for HR transactions, an increase from 36 percent in 2013. The survey noted that there is room for much growth, as only 10 percent 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. 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.

One in three companies planning changes to HR structure. The survey revealed that one in three companies is 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. Fifty-five percent of respondents said they reengineered key HR processes over the past 18 months, while 49 percent improved line managers’ people management capabilities. About one-third (36 percent) implemented manager and employee self-service initiatives, while 31 percent refocused the role of their HR business partners.

“Organizations 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 DiClaudio.

The survey also found the following:

• Manager self-service. The adoption of manager self-service tools increased dramatically worldwide. Seventy-one percent of North American organizations are using manager self-service tools this year, compared with 61 percent in 2013. Similar adoption increases were experienced in Asia Pacific, and Europe, the Middle East and Africa. Worldwide, 60 percent of organizations want to increase their use of manager self-service tools in the future.

• Employee engagement surveys. Nearly two-thirds of companies (63 percent) regularly conduct engagement surveys and use the data to direct people investments and impact their business. Companies that conduct engagement surveys have twice the satisfaction rate with the implementation of new technology, compared with companies that do not conduct surveys.

The survey contains responses from 1,048 companies. For more information, visit http://www.towerswatson.com.
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