Leading the Charge, Driving the Change: Delivering the HR of the Future

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Towers Perrin HR function effectiveness and technology specialists review and interpret the brand-new results of Towers Perrin's HR service delivery research. You'll learn what organizations are focused on now and how they are planning for the future -- despite an uncertain economic climate.

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Leading the Charge, Driving the Change: Delivering the HR of the Future

  1. 1. Leading the Charge, Driving the Change: Delivering the HR of the Future Towers Perrin 2009 HR Service Delivery Survey July 30, 2009 © 2009 Towers Perrin
  2. 2. About the HR Service Delivery Survey  Each spring, Towers Perrin surveys HR, HR operations and service delivery professionals globally on their organizations’ HR service delivery strategies, plans, tactics and tools  New this year: Modules on HR shared services and HR outsourcing effectiveness  Fielded in March and April 2009, and drew responses from 332 companies headquartered in North America, Europe and Asia  This year’s survey covered numerous content areas, including  HR service delivery priorities  HR staff ratios  HR function/organization design  HR shared services approaches and metrics  HR technology and systems  HRO effectiveness  Talent management approaches  HRO governance  Web 2.0 in HR  Employee/manager self-service © 2009 Towers Perrin 2
  3. 3. Headline #1: Cost has emerged as a top service delivery issue for the first time Top 10 HR Service Delivery Issues (top three frequency) Talent/performance systems 13% 13% 9% Streamline processes/systems 7% 16% 12% Cost 15% 3% 6% More involvement in strategic, business-driven issues 9% 8% 6% Upgrade HR system 9% 5% 4% Define human capital metrics and dashboards 2% 5% 10% Manager self-service 3% 6% 7% New HR system 9% 4% 2% Accuracy of data 3% 5% 6% Systems integration 4% 3% 6% First Second Third © 2009 Towers Perrin 3
  4. 4. Most organizations are focusing on cost-reduction strategies Activities Done or Considered Due to the Economic Downturn Focus more on cost-reduction strategies within 65% our service delivery approach Postpone certain service delivery initiatives 45% Shrink infrastructure supporting service delivery (e.g., reduce staff) 37% Standardize service delivery tactics across all locations (i.e., both domestic and international) 30% Try or consider new service delivery strategies we would not have considered otherwise 22% Accelerate service delivery decisions we would have made anyway 21% (n = 290) © 2009 Towers Perrin 4
  5. 5. Headline #2: Technology spending is not the target for these cost savings Spending on HR Technology vs. Prior Year 55% 43% 25% 22% 15% 11% 9% 8% 6% 6% (>20% (<20% Same (<20% (>20% reduction) reduction) increase) increase) (2008 Survey n = 382; 2009 Survey n = 331) 2008 Survey 2009 Survey © 2009 Towers Perrin 5
  6. 6. Headline #3: Who’s doing what… Companies Undertaking Initiatives in Past 18 Months Reengineered key HR processes 209 Sought to increase alignment of HR strategy with business strategy 208 Refocused the role of the HR business partners 133 Implemented and leveraged self-service (employee and/or manager self-service) 129 Introduced a new channel of HR delivery 86 Implemented a new, robust HRMS 64 Implemented a shared services model 57 Developed a standard global data architecture for HR data 53 Note: Base is those who have undertaken the initiative. © 2009 Towers Perrin 6
  7. 7. …and what’s paying off the most Results Achieving Expectations Among Those 76%-100% Complete Reengineered key HR processes (n=56) 25% 21% 36% 4% 14% Sought to increase alignment of HR strategy with business strategy (n=68) 18% 19% 47% 4% 12% Refocused the role of the HR business partners (n=47) 13% 26% 49% 6% 6% Implemented and leveraged self-service (employee and/or manager self-service) (n=48) 19% 19% 37% 10% 15% Introduced a new channel of HR delivery (n=36) 19% 14% 42% 8% 17% Implemented a new, robust HRMS (n=32) 16% 6% 31% 22% 3% 22% Implemented a shared services model (n=25) 12% 24% 52% 12% Developed a standard global data architecture for HR data (n=23) 9% 22% 43% 9% 17% Well above expectations Slightly above expectations Met expectations Slightly below expectations Well below expectations Too early to tell © 2009 Towers Perrin 7
  8. 8. Headline #4: Talent management is still top of mind…even in this economy Top 10 HR Service Delivery Issues (top three frequency) Talent/performance systems 35% Streamline processes/systems 35% Cost 24% More involvement in strategic, business-driven issues 23% Upgrade HR system 18% Define human capital metrics and dashboards 17% Manager self-service 16% New HR system 15% Accuracy of data 14% Systems integration 13% Recruiting/staffing services/systems 12% (n=332) © 2009 Towers Perrin 8
  9. 9. A variety of methods support the delivery of talent management programs — from HRMS, to outsourced, to paper-based processes Methods Primarily Used to Support Each Function Provided though Outsourced or Custom/in-house Manual/ N/A to our current HRMS system best of breed developed tool paper-based organization Compensation — base pay (n=309) 44% 22% 19% 14% 1% Compensation — variable pay/bonus (n=307) 29% 23% 25% 20% 3% Workforce analytics (n=270) 24% 19% 20% 23% 14% Recruiting/staffing — internal (n=318) 19% 59% 9% 11% 2% Recruiting/staffing — external (n=320) 16% 66% 6% 10% 2% Learning management and training 16% 53% 16% 12% 3% (n=303) Onboarding (n=273) 16% 22% 15% 39% 8% Performance management and goal 15% 32% 21% 29% 3% setting (n=311) Compensation — sales/incentive (n=286) 15% 19% 21% 19% 26% Career development/planning (n=274) 11% 24% 17% 36% 12% Succession planning (n=282) 8% 23% 18% 42% 9% © 2009 Towers Perrin 9
  10. 10. Manager self-service (MSS) is still growing, with significant gains expected in onboarding and succession planning MSS Availability View applicant résumés 62% 8% 8% 22% Review/update employee performance 55% 7% 12% 26% Initiate/approve job requisitions 56% 8% 10% 26% Track status of applicants 53% 10% 8% 29% Post jobs 50% 6% 7% 37% Plan annual incentive pay 48% 4% 8% 40% View employee data history 47% 8% 11% 34% Approve training classes for employees 46% 8% 9% 37% Extend offers 28% 8% 8% 56% Scan existing employee population for suitable candidates 21% 7% 13% 59% Onboard new employees 21% 11% 19% 49% Perform succession planning activities 18% 9% 18% 55% Workforce planning (project future workfore demand and supply) 6% 6% 16% 72% In place now During 2009 In 2010 Beyond 2010 or no plans (n = 302-314) © 2009 Towers Perrin 10
  11. 11. While technology is effective in helping meet some key talent management objectives, there’s still a long way to go Effectiveness of Technology in Helping Meet Talent Management Objectives Compensation — base pay (n=261) 28% 39% 25% 6% 2% Compensation — variable pay/bonus (n=237) 26% 39% 25% 7% 3% Performance management and goal setting (n=210) 21% 44% 24% 10% 1% Recruiting/staffing — internal (n=277) 17% 46% 19% 14% 4% Recruiting/staffing — external (n=281) 16% 49% 16% 15% 4% Compensation — sales/incentive (n=158) 15% 40% 32% 11% 2% Learning management and training (n=255) 12% 41% 30% 16% 1% Succession planning (n=138) 12% 36% 35% 14% 3% Onboarding (n=143) 11% 36% 36% 14% 3% Career development/planning (n=140) 8% 34% 34% 17% 7% Workforce analytics (n=166) 6% 35% 31% 24% 4% Very effective Somewhat effective Neutral Somewhat ineffective Very ineffective © 2009 Towers Perrin 11
  12. 12. Headline #5: Web 2.0 tool usage is on the rise within the enterprise and HR Plans to Launch Web 2.0 Tools Wikis (n=197) 24% 6% 3% 14% 53% Blogs (n=199) 23% 5% 3% 16% 53% Forums (n=188) 23% 5% 5% 19% 48% Podcasts (n=198) 22% 5% 5% 19% 49% Social networking (n=205) 17% 8% 5% 18% 52% Social bookmarking (n=304) 6% 4% 2% 10% 78% Already in place Yes, currently under development Yes, within a year Yes, no definite time frame No Note: Base is all respondents excluding insufficient personal knowledge. © 2009 Towers Perrin 12
  13. 13. HR foresees numerous benefits from the use of Web 2.0 tools Reasons for Deploying Web 2.0 Tools for HR Purposes Enable knowledge management and collaboration within teams 36% 34% 15% 11% 4% Increase engagement among all employees within company 26% 31% 19% 14% 10% Enable knowledge management and collaboration between departments 25% 33% 18% 13% 11% Increase effectiveness of onboarding and integration 24% 29% 22% 4% 21% Increase individual and group productivity 23% 37% 17% 15% 8% Increase engagement among high-performing employees 21% 27% 25% 13% 14% Increase employee engagement among Generation Y 20% 37% 14% 15% 14% Search internal talent pool for individuals with right skills 19% 25% 14% 13% 29% Improve peer-to-peer support 16% 38% 25% 7% 14% Increase employee engagement among affinity groups 16% 28% 22% 14% 20% Extremely important Important Moderately important Slightly important Not at all important (n = 68-74) © 2009 Towers Perrin 13
  14. 14. HR is playing a major role in it’s own use of these applications… HR’s Role in Setup and Deployment of Tools for HR Purposes Content generation 68% Catalyst for initial implementation 67% Content maintenance 62% Involved in change management/communications 61% Creation of policies 48% Ongoing governance 44% Risk identification/mitigation 32% Measurement 27% HR not involved 7% Other 4% (n = 81) © 2009 Towers Perrin 14
  15. 15. …but is lacking a strong role for enterprise-wide Web 2.0 applications HR’s Role in Setup and Deployment of Tools for Broader Organization Involved in change management/communications 42% Creation of policies 35% Content generation 32% Catalyst for initial implementation 31% Content maintenance 24% Ongoing governance 23% Risk identification/mitigation 19% Measurement 14% HR not involved 31% Other 3% (n = 31) © 2009 Towers Perrin 15
  16. 16. Headline #6: Shared services and outsourcing share consistent goals and results Top Reasons HR Shared Services Organization Was Created 1 Eliminating the distraction of administrative and transactional 48% HR work to focus on more strategic work 2 Ongoing, longer-term operational cost savings 40% 3 Standardizing HR processes throughout the business 40% Substantial improvements in HR service quality beyond what you 4 could achieve on your own at the available level of investment 35% Changing the behaviors of employees/managers 25% As part of a broader HR transformation effort 22% Substantial improvements in the timeliness, accuracy and meaningfulness of the workforce information 20% Substantial productivity improvements in HR 17% Changing the behaviors of HR 16% As part of a move to a broader Corporate Shared Services function 11% Reduced capital expenditures 6% Obtaining a higher level/quality of service and support than that available through internal IT 4% (n = 100) © 2009 Towers Perrin 16
  17. 17. The reasons for creating shared services are similar to the reasons that organizations outsource Shared Services Ranking Top Reasons for Outsourcing 2 Cost savings 73% Eliminating the distraction 1 of administration and transactional HR work 73% 4 HR service quality improvements 50% 3 Standardized HR processes 35% Changing behaviors of employees and managers 23% Substantial improvements in timeliness, accuracy and meaningfulness of 20% workforce information available to management Facilitate mergers and acquisitions 10% Obtain higher level of service and support 5% Acceptance by business as a strategic partner 3% (n = 40) © 2009 Towers Perrin 17
  18. 18. Organizations that outsource are improving over time in terms of realizing results against many of their goals Average Score 2009 2008 Standardized HR processes (n=14) 93% 7% 4.1 3.6 Facilitate mergers and acquisitions (n=4) 75% 25% 4.7 4.0 Cost savings (n=28) 64% 4% 11% 21% 3.9 3.8 HR service quality improvements (n=20) 55% 5% 20% 20% 3.4 2.9 Eliminating the distraction of administration and transactional HR work (n=28) 50% 14% 29% 7% 3.1 3.0 Obtain higher level of service and support (n=7) 50% 50% 3.0 2.0 Substantial improvements in timeliness, accuracy and 43% 43% 14% 3.5 3.1 meaningfulness of workforce information available (n=7) Changing behaviors of employees and managers (n=8) 37% 25% 25% 13% 3.1 3.3 Successful Neutral Unsuccessful Too soon to tell © 2009 Towers Perrin 18
  19. 19. Headline #7: The changing face of HRO Approach to Transforming HR Delivery Model in the Context of HRO Total “Lifted and shifted” 43% “Transferred and transformed” 57% (n = 40) Rookies Veterans 23% 48% 52% 77% (n = 13) (n = 27) © 2009 Towers Perrin 19
  20. 20. How well results achieved through HR transformation met expectations Average How Well Results of Transformation Met Expectations Average Percentage Score Complete Implemented a new, robust HRMS (n=5) 83% 17% 4.2 70% Implemented a shared services model (n=19) 58% 26% 16% 3.7 56% Developed a standard global data architecture for HR data (n=9) 67% 33% 3.9 63% Refocused the role of the HR business partners (n=15) 40% 27% 33% 3.1 53% Sought to increase alignment of HR strategy with business strategy (n=12) 42% 25% 33% 3.3 46% Implemented and leveraged self-service (n=14) 43% 29% 21% 7% 3.4 46% Introduced a new channel of HR delivery (n=7 57% 14% 29% 3.4 41% Reengineered key HR processes (n=15) 47% 40% 13% 3.5 39% Above expectations Met expectations Below expectations Too early to tell © 2009 Towers Perrin 20
  21. 21. “If we had known then….” Attributes most important in initial selection process and now Attributes Ranked by Change in Importance Increased in Importance Decreased in Importance (importance was underestimated initially) (importance was overestimated initially) Quality of staff/expertise Prior experience providing HRO services 65% High 13% 23% 43% Flexibility to meet your specific needs Implementation costs 48% 20% 30% 38% Risk management processes 13% Transition approach (e.g., methods, tools, project management skills) 15% 0% 28% Per-employee costs 53% Contract terms and conditions 43% 38% Cultural match 50% 33% Geographic reach/ability to service employees working outside your home country 25% 18% Service levels promised 25% 35% 28% Ability to transform HR processes 23% Technological capabilities 28% 63% 58% Low Prior knowledge of your organization No Change in Importance 3% Financial stability (of the service provider) 8% 20%  Attributes considered most important now selection process  Attributes considered most important in initial 20% (n = 40) © 2009 Towers Perrin 21
  22. 22. Questions? Tom Keebler 1 215 246 6184 tom.keebler@towersperrin.com Robert Zampetti 1 514 982 2099 robert.zampetti@towersperrin.com Interested in other HR service delivery topics? This Fall, we'll feature targeted webcasts on the following topics:  HR shared services  HR outsourcing  Best practices in total rewards portals  Best practices in onboarding/offboarding To be notified about these events, please email either of us or hit the “Contact Us” button on towersperrin.com and we'll make sure that you are included. © 2009 Towers Perrin 22

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