Investment in HR technology continues to grow: Towers Watson

Worldwide investment in corporate human resource (HR) technology continues to grow and is doing so at an exponential rate, according to the 2015 HR Service Delivery and Technology Survey from Towers Watson. The survey also found that despite overwhelming satisfaction with HR technology, a surprisingly large number of companies are still using paper to perform various HR tasks.

Nearly nine in 10 respondents (88 percent) said they plan to spend the same amount or more on HR technology and systems this year compared to last year. In addition, organizations are replacing their core HR management systems more frequently than ever before—every three to five years versus every five to seven years historically. The survey noted that 30 percent of respondents will replace their core HR systems this year—an all-time high, with Workday as the preferred selection.

“Modernizing core HR technology is emerging as the primary HR service delivery priority,” said Mike DiClaudio, global leader of Towers Watson’s HR Service Delivery practice. “While in the past, companies have mostly invested in secondary technology for talent, compensation and performance management, there has been a dramatic shift to investing in core HR systems. Many organizations are now looking at cloud-based platforms to replace traditional HR platforms. The changing environment will lead companies to take a closer look at their overall HR technology needs.”

The survey also revealed that employer interest continues to grow in the use of mobile technologies and HR portal technologies. More than six in 10 respondents (61 percent) plan to use mobile technologies for HR transactions this year, a large increase from last year (46 percent). The survey also indicated that two-thirds of respondents now have an HR portal in place, up from 60 percent last year.

Respondents reported a wide gap between the level of satisfaction with HR technology and the extent to which organizations still use paper to perform certain HR tasks. For example, while three in four respondents (74 percent) are satisfied with the technology they use for their performance management programs, 28 percent still use paper. Likewise, 79 percent of those organizations that use technology for global grading/job leveling and core compensation activities say the technology is effective, yet 42 percent and 47 percent, respectively, continue to use paper.

“It is somewhat surprising that so many organizations are still using so much paper. Given the robust technology solutions now available to HR departments, we expect the reliance on software and systems to increase while the use of paper will steadily decline over the next several years,” said DiClaudio.

The survey also found the following:
Changing HR structures. Four in 10 respondents are planning to make changes to their HR structures either this year or next, versus 30 percent that indicated last year they planned to do so.
Shared services. A vast majority of respondents (85 percent) are meeting or exceeding expectations with HR shared services. Nearly nine in 10 inquiries are solved by self-service of HR shared services.
Payroll. Three in four respondents use a single payroll system inside their headquarters country; 78 percent have multiple payroll systems/vendors outside their home country.

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