HR Technology Spend: a third of companies are increasing their investment

Companies planning to spend more on HR to drive efficiencies New Towers Watson research (15th annual survey on HR Service Delivery and Technology) claims that companies are planning to increase their investment in HR technology over the next year. In a survey of over 600 companies from around the world, Towers Watson found that more than half (53%) of those surveyed plan to keep spending at the same level as last year, while 31% will increase, or significantly increase, spending. Only 16% responded that they’d be operating reduced budget. Among organizations that expect to spend more in 2013 than in the previous year, over one-third (38%) plan to deploy additional functionality from existing vendors; another 36% are looking to upgrade or re-implement their existing HRMS, and 34% plan to expand their existing self-service offerings. Linked to this, HR portals are riding something of a wave: 60% of companies already operate one, and 20% are in the process of developing a portal. The portal’s strong adoption level suggests that HR sees portals as a solution to retain and engage employees – from sharing the value of their total rewards packages to providing real-time career management opportunities. Two portal technology approaches stood out: 36% of organizations have developed their own custom portal; and 31% use Microsoft’s SharePoint technology. The survey also found that 44% of the companies surveyed planned to change their HR structure to provide services more effectively (by comparison, last year's percentage was just 26%). For organizations planning changes, improving operations is a major theme: The majority (64%) want to realize efficiencies, 54% are hoping to capture synergies among processes and investments, 51% want to improve quality, and 46% aim to reduce costs.This seems to confirm what we’ve been seeing in the market: despite obvious downward pressure on budgets, HR needs to step up and update its services delivery. Shared services is emerging as the most valued (and most prevalent) practice for delivering HR services to the business, though outsourcing is gaining popularity for certain functions. Among large organizations, more than two-thirds (70%) operate in-house service centers; for midsize organizations the ratio is 54%. A significant majority (70%) of organizations making changes to their HR structure are focused on shared services as a primary initiative. No company said that they planned to move away from the shared services model. The primary HR service delivery issue remains talent ("mission critical") and performance management. After that come streamlining business processes, becoming more involved in strategic business issues, and recruiting, which is on the rise: 22% of respondents indicated it will be a priority for the year ahead. For details: http://www.towerswatson.com/united-states/research/7805

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