By Daniel Hunter

Some big changes are in store for corporate human resource functions within the next two years as companies around the globe face mounting pressure to improve the delivery and effectiveness of HR services, according to an annual survey by global professional services company Towers Watson.

The survey also revealed that companies are considering new HR technologies, will continue to invest in HR technology such as mobile applications, and plan to analyse and change their HR processes.

The 2013 HR Service Delivery and Technology Survey, a global survey of 1,025 companies, found that more than one in three respondents (36%) will make a change to their HR structure before the end of next year. Among companies changing their HR structure, nearly three-quarters (74%) are doing so to realise further operational efficiencies, while just over half (53%) are doing so to improve quality. Another 37% are seeking to achieve cost savings or pursuing a change in business strategy (34%).

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

“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 Andrew Steels, EMEA leader of Towers Watson’s HR Service Delivery practice.

“Many organisations 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.”

Indeed, the survey shows that HR technology spending remains steady and strong despite cost reductions in other areas of HR. More than half of organisations (53%) indicated their investment in HR technology this year will match last year’s investment levels, while over a quarter (27%) will either increase or significantly increase their HR technology investments.

HR is also catching on to the mobile technology trend. More than 60% of respondents now provide mobile access via Smartphone to employees, and almost a quarter (24%) offer tablets. But HR-enabled applications are in their infancy: only about one in 10 organisations currently use mobile applications for HR purposes. This trend is expected to accelerate, as 25% plan to offer HR-enabled applications in the next 12 to 18 months. However, as many as half of the organisations surveyed have no plans to leverage mobile applications before the end of 2014.

“Without question, HR service delivery is in a state of change and organisations need to embrace that change as the new constant. This means they can change the game by modifying their structure, rethinking long-held processes, adopting new HR technologies and processes, and extending capabilities to the organisation via manager self-service and shared services. In the end, it means using new concepts, approaches and technology to provide better HR services,” said Steels.

Other key findings from the survey include:

· Streamlining business processes ranked as the primary HR service delivery issue this year, cited by 32% of respondents, followed by talent and performance management systems and greater involvement in strategic business-driven issues, both cited by 29% of respondents.
· Six out of 10 organisations (59%) offer an HR portal to HR and employees. Another 19% are in the process of developing an HR portal.

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