What are the trends in Human Resources transformation practices? What is the current and future transformation scope? In which way have recent global economic changes affected HR transformation plans?

1. Global HR 2010
Transformation
An ongoing journey
Conducted by SharedXpertise in association with ADP

3. table of contents
introduction 4
about the survey 5
executive summary 6
introduction ............................................................................ 4
research findings
about the survey...................................................................... 5 8
executive summary.................................................................. 6
HR transformation status 8
research findings ..................................................................... 8
HR transformation outcomes 12
HR transformation status .................................................. 8
HR transformation outcomes .......................................... 12
outsourcing and shared services 18
outsourcing and shared services ..................................... 18
HR management practices 28
HR management practices .............................................. 28
about the survey participants
about the survey participants ................................................ 30 30
about the research research .................................................. 32
about the sponsors sponsors 32
Conducted by SharedXpertise in association with ADP [3]

4. introduction
one glass, two ways to see it
There are many ways to look at things, but a situation can usually be analysed by viewing it
from one of two angles: the glass is half full or it’s half empty.
In other words, look on the bright side of the story or let your less optimistic side take
control.
In fact the real choice is between the intent to get better at something or just maintain a
situation as is. What do you think we chose for ADP, a company that has been in business
for over 60 years? What could have led us to support the Global HR Transformation Report
for so many years, if not the will to understand where room for improvement exists?
What does this year’s report tell us? First of all, things are heading in the right direction. No
revolution here but a movement that has been steadily gathering momentum. Companies
around the world that embarked on HR Transformation years ago now reap the rewards of
their efforts. Regional variances still exist but those of you who have been reading the
report for several years will find concepts that were previously unfamiliar are now
conventional wisdom.
So, is HR Transformation over? It would be foolish to think so. There are in fact many
aspects yet to be examined; ideas and actions to be carefully considered that could lead to
fantastic opportunities. I am confident the HR Transformation journey is far from over.
More than ever, companies have to deal with uncertainty and new forms of competition,
and I invite you to listen carefully to how other HR professionals identify new challenges
and bring innovations. Any component of a business has the potential to play a significant
role in the changes that must be made for a company not just to survive, but to thrive.
HR plays an important role in reaching this goal. It is in our interest, as solution providers
and HR professionals, to strive to move forward together toward the goal of making HR
more agile. We may then accurately assess the resources needed to manage change, deal
with cultural differences, and define the appropriate breakout of processes to manage at
the local, regional and global levels. These are but a few examples of how to solve the
equation.
This is how HR and, more specifically HR Transformation, should be viewed: a sophisticated
equation. No one said it would be easy to figure out, nor that its components would remain
the same, but mathematics is all about defining new possibilities and transforming them
into real opportunities.
New challenges lie ahead. It is up to us to leverage this report to find innovative ways to
meet them.
I wish you a rewarding read,
Doug Cummings
Senior Vice President, Global MNC Sales
ADP Employer Services
[4] Conducted by SharedXpertise in association with ADP

5. about the survey
Our survey, now in its seventh year, examines trends in human resources (HR)
transformation practices (which we define as any concerted effort to change and
improve HR operations, whether through outsourcing, shared services, internal
reengineering, or a combination of these strategies) in organisations around the
globe. The 2010 report offers a view of market trends and changes in HR
transformation, as well as a perspective on future plans.
In addition to discussing transformation status and strategy, our report addresses:
• Reasons organisations transform, and the barriers that limit their transformation
• Transformation timing, cost and satisfaction
• Engagement of external resources and experience
• Current and future transformation scope
• HR outsourcing and shared services strategy, budget and provider selection
The survey received responses from 225 executives around the globe in varying
stages of HR transformation. For a full breakdown of respondent demographics,
please visit the About the Survey Participants section of the report.
Conducted by SharedXpertise in association with ADP [5]

6. executive summary
summary of 2010 findings
Transformation is on the rise again. After a dip in 2009, HR HR transformation continues to take longer than anticipated.
transformation appears to be on the rise again with 85% of all Organisations in all regions take slightly longer to transform
respondents saying they are considering, in the process of, or than they originally anticipate, a finding that has been
finished with HR transformation. In fact, although the recent consistent throughout the seven years of our research.
economic recession does appear to have had some impact on
On average, HR leaders say HR transformation requires two to
HR transformation activity (many indicators were down in
three years; more than a quarter of organisations take more
2009 over 2008) there are signs of increased transformation
than four years to transform HR. The top reasons
activity improvement in 2010 (though generally not back to
transformation is delayed are: management/leadership/
2008 levels):
organisational changes impacted transformation progress;
• Transformation efforts overall were down in 2009, and, timing and transformation is/was more complex than
reversing a years-long trend of growth, but on the rise expected.
again in 2010.
And continues to generate less in savings than anticipated. At
• The proportion of respondents who say they are not the same time, organisations often miss their transformation
transforming due to cost pressures increased savings targets by a slim margin: whilst 62% of all respondents
significantly from 2008 to 2009,but declined from 2009 anticipate savings of 6% – 25%, 57% actually achieve those
to 2010. savings; another 14% anticipate the lowest level of savings
• Internal reengineering (versus engaging outsourcing, (less than 5% savings), but 20% say they actually achieve
shared services or some kind of hybrid approach) was up savings in that range. Respondents in EMEA are more
significantly in 2009 over 2008, but it stayed virtually the aggressive than those in other regions in both their cost
same in 2010. savings expectations and results.
Regional shifts in HR transformation may be appearing on the Organisations achieve the best transformation results in
horizon. On a regional basis, organisations in the Americas are organisational management areas. Survey respondents say
slightly more likely than their counterparts in other regions to they perform best in aligning the organisation around
be engaged in HR transformation, but longitudinal research common objectives (79% of respondents say they exceed or
indicates there may be changes. Our results show an increase meet expectations in this area) and responding to
in HR transformation activity in Europe/Middle East/Africa organisational changes (73% of all respondents exceed or
(EMEA) (75% transforming in 2008 versus 87% in 2010), and a meet expectations). Respondents rate themselves worst at
decline in activity in Asia Pacific (93% transforming in 2008 leveraging HR transformation to free internal HR staff to focus
versus 81% in 2010), whilst the Americas remain fairly steady on strategic issues (46% say the fall below expectations in this
at 89%. area) and benefiting from a new technology to empower line
Transformation approaches vary by region. Americas-based management (42% say they fall below expectations in this
organisations are most likely to employ a hybrid approach, area).
Asia Pacific oranisations focus on internal reengineering, and Organisations do a good job of matching areas of importance
EMEA organisations are the most varied with nearly equal to performance. Generally, organisations are performing best
portions engaging hybrid, internal reengineering and shared in the areas that they deem important, with the single
services approaches. exception being the objective of freeing internal HR staff to
Top reasons organisations engage in HR transformation also focus on strategic issues, which has the lowest reported
vary by region. In a departure from prior years, our 2010 performance of all key performance areas.
research indicates different top reasons for transformation by HR transformation hurdles are becoming entrenched. Across
region: all seven years we’ve been conducting this research, the main
• Americas: to align the organisation on common hurdles to HR transformation have remained unchanged, with
objectives and to free internal HR staff to focus on skills of existing HR staff at the top of the list every year.
strategic issues (both selected by 56% of respondents) Other top hurdles continue to include underestimation of
resources needed (52%), lack of adequate technology (41%),
• Asia Pacific: to add and/or improve service for line and internal bureaucracy (40%).
management and employees or to respond to
organisational changes (both are selected by 65% of HR outsourcing appears to be declining. Across the past three
respondents) years, the proportion of respondents who say they are
• EMEA: to reduce/better manage costs (62% of currently outsourcing or considering outsourcing HR
respondents) processes has slowly declined, from 65% in 2008 to 59% in
2009, and 54% in 2010.
[6] Conducted by SharedXpertise in association with ADP

7. executive summary
Even with changes across time, HR outsourcing continues to The use of shared services for some transactional services
be focused on transactional activities. Organisations in all remains common. Just about two-thirds of all respondents say
regions are most likely to outsource/consider outsourcing they manage one or more HR process(es) through a shared
payroll, and least likely to outsource/consider outsourcing the services model. As with outsourcing, organisations are more
entire HR function. likely to manage transactional processes – such as payroll and
HR information systems (HRIS) – in a shared services
With HR outsourcing as a whole down, few individual
environment than they are strategic processes. Respondents
processes experience an increase in outsourcing between
from the Americas are more likely than are their counterparts
2009 and 2010. The highest increase in outsourcing is in
in other regions to manage at least one HR process through a
assessment/performance appraisal, which, although
shared services model (71% of Americas respondents versus
uncommon, rose from 19% to 26% between 2009 and 2010.
56% of Asia Pacific respondents and 63% of EMEA
Payroll, the most commonly outsourced HR process, also saw
respondents).
an increase, from 80% in 2009 to 84% in 2010.
HR functional management may be becoming increasingly
Most buyers develop their own processes for identifying and
global. The HR function is most often centralised at a global
selecting their provider(s). Nearly three quarters of all
level, with 42% of all respondents selecting that option,
respondents say they develop and/or use their own process
versus domestic and regional centralisation, each selected by
to identify and select their provider(s), down from a high of
29% of respondents. This finding represents a change over
87% in 2009, but nearly equally to 2008’s 70%. 2010 saw a
2009 when the split was fairly equal amongst the three
decline in the use of consultants or sourcing advisors, with
options (35% domestic, 33% regional and 32% global).
36% of respondents saying they engage a consultant or
sourcing advisor versus 51% in 2009. The issuing of requests Whilst HR functions are most often centralised on a global
for information (RFIs) and requests for proposals (RFPs) is also level, individual HR processes are most often managed on a
down. local level. Nearly all HR processes are most likely to be
managed locally, versus regionally or globally. Only stock
The top four provider selection criteria remain ever constant.
option management is just slightly more likely to be managed
The top four provider selection criteria remain unchanged
on a global level than a local level.
over the previous four years, although they regularly change
positions. In 2010, the top provider selection criterion is Most organisations have a common HR information system
proven ability to meet service levels, followed by functional (HRIS). Amongst those organisations that have a common
coverage and expertise, then price followed by multi-country HRIS (80% of all respondents), over a third (35%) say it is
capabilities. There are limited differences in the top criteria managed at a global level; nearly as many (32%), though, say
amongst the different regions. their HRIS is managed at a domestic level. Least likely
amongst those that have a common HRIS is management at
Organisations most often budget less than US$1M annually
the regional level (14% of all respondents).
for HR outsourcing. The highest percentage of respondents
(41%) budget less than US$1M annually for HR outsourcing;
another 30% budget US$1M – US$10M, and the remaining
29% budget more than US$10M. Analysis of year-over-year
HR outsourcing budgets indicates growth at both ends of the
budget scale, with an expanding proportion budgeting either
less than US$1M or more than US$11M.
Although HR outsourcing appears to be declining,
respondents say budgets are rising. In spite of the fact that a
declining percentage of respondents say they are currently
outsourcing or considering doing so, the percentage of
respondents who say their HR budgets are increasing is up:
48% of respondents say they anticipate their HR outsourcing
budgets to increase over the next three years versus 42% in
2009 (although not up to the 2008 level of 55%). Most often,
organisations say they expect budgets to increase by 10% –
24% (20% of all respondents); 17% say they anticipate an
increase of less than 10%.
Conducted by SharedXpertise in association with ADP [7]

8. research findings
HR transformation status
headlines
• HR transformation is on the rise again following a dip in 2009; 85% of all respondents say they are engaged in HR
transformation in some form, whether reengineering, outsourcing, shared services, or hybrid approach. Just over a third say
they have been engaged in HR transformation over a year.
• Whilst organisations in the Americas are still more likely to be transforming HR than are those in other regions, the most
significant year-over-year change has taken place in the Europe/Middle East/Africa (EMEA) region, with a 16-point increase in
organisations saying they are engaged in HR transformation in 2010 over 2009.
• Those that are transforming HR most often engage a hybrid approach (41%), combining internal reengineering, shared
services, and possibly outsourcing. Next most common is internal reengineering, with nearly a third engaging that strategy.
• Transformation strategies vary by region: organisations in the Americas are most likely to engage a hybrid approach; those in
the Asia Pacific region most often employ internal reengineering, and EMEA organisations are the most diverse, employing a
variety of approaches
• The reasons organisations engage in HR transformation has remained constant over years of research, the most common
being to reduce or better manage costs. However, there are variations by region: those in the Americas most often say their
focus is to align the organisation on common objectives and to free internal HR staff to focus on strategic issues; Asia Pacific-
based respondents most often say it is to add and/or improve service for line management and employees or to respond to
organisational changes; EMEA headquartered organisations most often say they are engaged in HR transformation to reduce/
better manage costs.
• Amongst those respondents who say they are not engaged in HR transformation, most say the reason is that they are satisfied
with their current organisation or strategy.
findings
who is transforming HR Amongst those organisations that have chosen not to engage
in HR transformation, most often it is because they are
After a dip in 2009, HR transformation appears to be on the satisfied with their current organisation or solution (53%), HR
rise again with 85% of all respondents saying they are is not a priority (26%) or transformation is considered too
considering, in the process of, or finished with HR costly (24%). The order and magnitude of these reasons are
organisations
transforming HR transformation. HR transformation activity remains largely unchanged between 2009 and 2010, although cost was
down from its highest (90% in 2008). significantly up in 2009 over 2008, and appears to be waning
85% On a regional basis, organisations in the Americas
in 2010. (Cost was selected as a reason not to transform by
0% in 2008, 40% in 2009, and 24% in 2010).
are slightly more likely than are their counterparts in
other regions to be engaged HR transformation. However, where organisations are in HR transformation
survey results indicate activity is shifting by region.
The highest percentage of respondents (40%) organisations
The most significant change has been in been in the Europe/ with more than 1 year of
have been transforming HR for one to two years,
Middle East/Africa (EMEA) region, which has seen an increase experience in
and 64% have been transforming HR for a year or transforming HR
in HR transformation activity: 87% of EMEA respondents say
more. Predictably, generally the larger the
they are engaged in HR transformation, up from a low in 2009
of 71%. On the other hand, the Asia Pacific region has
company, the longer they have been
transforming HR.
64%
experienced a decline in HR transformation activity, from 93%
in 2008 to 81% in 2010. HR transformation activity in the
Americas is virtually unchanged at 89% of all respondents.
[8] Conducted by SharedXpertise in association with ADP

9. research findings
figure 1: where organisations are in their transformation process, all figure 2: organisations engaged in HR transformation, 2006 – 2010
respondents
15% 90%
21% Planning to transform 85% 85%
81%
75%
% engaged in transformation
7%
In transformation
Completed transformation
No plans to transform
57%
2006 2007 2008 2009 2010
figure 3: organisations engaged in HR transformation, by region, 2008 – 2010
Americas Asia Pacific EMEA
% engaged in transformation
% engaged in transformation
% engaged in transformation
93%
89% 87% 89% 87%
83% 81%
75%
71%
2008 2009 2010 2008 2009 2010 2008 2009 2010
figure 4: reasons organisations are not transforming HR, all respondents
Satisfied with current organisation/solution 53%
HR is not a priority 26%
Cost 24%
Company currently under re-organisation 15%
Company policy 3%
% who select
figure 5: how long organisations have been engaged in HR transformation,
all respondents
14% <1 yea r
24%
1 – 2 years
22%
3 – 4 years
5+ yea rs
40%
Conducted by SharedXpertise in association with ADP [9]

10. research findings
HR transformation status, continued
findings
how organisations are transforming HR
Organisations are most often transforming HR through a
hybrid approach of outsourcing, centralised services and
internal reengineering (40% selected this option). Next most
common is internal reengineering (31%), followed by a
predominantly shared services approach (23%), then by a
predominantly outsourcing approach (6%).
This pattern is somewhat similar to the approach
organisations noted in our 2009 research, when, likely due to
the global economic recession, internal reengineering jumped
from 19% of all respondents to 33%. Whilst down slightly, to
31%, in 2010, that approach remains strong. At the same
time, outsourcing rose in 2009 over 2008, but is off again in
2010.
Transformation approaches vary somewhat by region.
Organisations in the Americas are the most likely to engage in
a hybrid approach (45%), whilst those in the Asia Pacific
region are most likely to engage in internal reengineering
(44%). Organisations headquartered in EMEA are much more
diverse in their approach, with nearly equal portions engaging
in hybrid (32%), internal reengineering (31%) and shared
services (29%) approaches. In all regions, a transformation
approach based predominantly on outsourcing is uncommon.
why organisations are transforming HR
The main reasons organisations transform HR have remained
fairly constant over the past several years, with reducing/
better managing costs the top reason (56% select this option
on 2010), as it has been for all but one year. (2008, when cost
reduction/management dropped to number three, appears to
have been an anomaly.) Other top reasons to transform HR
(also consistent across the years) are adding/improving
service for line managers and employees (52%), responding to
organisational changes (52%), aligning the organisation on
common objectives (51%), and freeing internal HR staff to
focus on strategic issues (51%).
Unlike in years past, this year’s results indicate some variation
in response by region. Respondents from organisations based
in the Americas most often say they are engaged in HR
transformation to align the organisation on common
objectives and to free internal HR staff to focus on strategic
issues (both are selected by 56% of respondents). Asia Pacific-
based respondents most often say they are engaged in HR
transformation to add and/or improve service for line
management and employees or to respond to organisational
changes (both are selected by 65% of Asia Pacific
respondents). EMEA headquartered organisations most often
say they are engaged in HR transformation to reduce/better
manage costs (62% of EMEA respondents).
[10] Conducted by SharedXpertise in association with ADP

11. research findings
figure 6: approaches organisations are taking to transform HR, all figure 7: approaches organisations are taking to transform HR, 2008 – 2010
respondents
6%
2008 44% 19% 30% 7%
23%
40%
2009 35% 33% 20% 12%
2010 40% 31% 23% 5%
31%
Figure x: approaches organisations are taking to transform HR, by region
Hybrid
Internal reengineering Americas 45% 27% 23% 5%
Predominantly shared services Asia
36% 44% 16% 4%
Predominantly outsourcing Pacific
EMEA 32% 31% 29% 7%
figure 8: reasons organisations engage in HR transformation, all respondents and by region
To reduce cost or better manage the cost of internal processes 56%
To add and/or improve service for line management and employees 52%
To respond to organisational changes 52%
To align the organisation on common objectives 51%
To free internal HR staff to focus on strategic issues 51%
all respondents To concentrate resources on core business 35%
To benefit from a new technology to empower line management 33%
To facilitate reporting 25%
To access external sources of talent, expertise or technology 17%
% who select
To align the organisation on common objectives 56%
To free internal HR staff to focus on strategic issues 56%
To reduce cost or better manage the cost of internal processes 53%
To respond to organisational changes 52%
To add and/or improve service for line management and employees 51%
americas
To benefit from a new technology to empower line management 33%
To concentrate resources on core business 33%
To facilitate reporting 25%
To access external sources of talent, expertise or technology 18%
% who select
To add and/or improve service for line management and employees 65%
To respond to organisational changes 65%
To free internal HR staff to focus on strategic issues 58%
To align the organisation on common objectives 55%
To concentrate resources on core business 52%
asia pacific
To reduce cost or better manage the cost of internal processes 48%
To benefit from a new technology to empower line management 42%
To facilitate reporting 42%
To access external sources of talent, expertise or technology 32%
% who select
To reduce cost or better manage the cost of internal processes 62%
To add and/or improve service for line management and employees 49%
To respond to organisational changes 47%
To align the organisation on common objectives 44%
To free internal HR staff to focus on strategic issues 42%
emea
To concentrate resources on core business 30%
To benefit from a new technology to empower line management 28%
To facilitate reporting 19%
To access external sources of talent, expertise or technology 9%
% who select
Conducted by SharedXpertise in association with ADP [11]

12. research findings
HR transformation outcomes
headlines
• HR transformation takes slightly longer and generates slightly less savings than first anticipated, a finding that has remained
unchanged across seven years of research.
• Organisations cite management/leadership/organisational changes as the top reason for slower-than-expected results.
• Organisations realise the best results from HR transformation in organisational management areas, and the worst results in
leveraging HR staff into more strategic areas.
• On the whole, respondents do not appear terribly happy with their HR transformation performance overall. On a 5-point
scale, the highest performing area (adding and/or improving service for line management and employees) achieves only a
2.89 score.
• That said, organisations generally report performing better in areas that they deem important and less well in areas they
deem unimportant, so it appears focus and resourcing are being thoughtfully applied.
• The main hurdles to successful HR transformation remain unchanged over the years, with skills of existing HR staff perpetually
topping the list. In the 2010 research the next most common hurdle is underestimating the resources needed to transform.
findings
time and savings As with time-to-transform results, organisations often miss
their cost savings expectations by a slim margin. A majority of
HR transformation takes slightly longer than anticipated to respondents (62%) anticipate savings of 6% – 25% (the
achieve, a result we have found throughout the seven years highest portion anticipating savings of 16% – 25%), but 57%
we have conducted this research. Across all actually achieve those savings. Whilst 14% anticipate the
average number of
years to transform respondents, those responsible for HR lowest level of savings (less than 5% savings), 20% say they
transformation most often anticipate actually achieve savings in that range. On the other end of the
2-3 transformation taking one to two years (42% of
respondents), whilst 32% actually achieve that
scale, however, virtually the same proportion of respondents
anticipate and achieve savings of more than 35% (8%
result. Another quarter (25%) expect anticipate those savings; 7% achieve them).
transformation to require three to four years, whilst 31%
actually take that amount of time; and only 10% anticipate Again here, whilst organisations in different
average cost savings
taking more than four years, whilst more than a quarter (27%) regions generally follow similar patterns, there
actually require that amount of time. The remaining 23%
anticipate transformation taking a year or less; only 11%
are regional differences. EMEA organisations
tend to be most aggressive in their planning, with 16%-
actually achieve transformation in the timeframe. just over a third (35%) anticipating savings of
Organisations in different regions tend to follow similar
more than 25% (versus 19% and 14% of Asia
Pacific and Americas respondents, respectively,
25%
patterns as the overall response, although Asia Pacific anticipating this level of savings).
organisations appear to be more aggressive in both
anticipated and actual transformation timing. Interestingly, whilst a higher proportion of EMEA respondents
actually achieve savings of more than 25% (25% of EMEA
The most common reasons respondents cite for taking longer respondents say they achieve that level of savings, versus 20%
than anticipated to achieve HR transformation include: of Asia Pacific and 19% of Americas respondents), that means
• Management/leadership/organisational changes impacted EMEA respondents are generally underperforming their
transformation progress and timing. expectations, whilst Americas and Asia Pacific respondents
• Transformation is/was more complex than expected. are outperforming their expectations, even if only slightly.
• Staff turnover impacts(ed) transformation progress and
timing.
• The staff is/was too stretched to focus on transformation
• Competing priorities impacts(ed) transformation progress
and timing.
[12] Conducted by SharedXpertise in association with ADP

13. research findings
figure 9: actual versus expected time to transform, all respondents
Less than 6 months
Anticipated 4% 19% 42% 25% 10%
6 – 12 months
1 – 2 years
2% 3 – 4 years
Actual 9% 32% 31% 27%
More than 4 years
figure 10: actual versus expected time to transform , by region
Americas 5% 16% 41% 29% 9%
Anticipated
Asia Pacific 8% 24% 44% 24%
Less than 6 months
EMEA 3% 19% 45% 20% 13%
6 – 12 months
1 – 2 years
Americas 3% 9% 30% 26% 32% 3 – 4 years
Actual
More than 4 years
Asia Pacific 4% 21% 29% 38% 8%
EMEA 5% 34% 33% 28%
figure 11: actual versus expected cost savings resulting from HR transformation, all respondents
Up to 5%
6% – 15%
Anticipated 14% 29% 33% 15% 6% 2%
16% – 25%
1% 26% – 35%
36% – 45%
Actual 20% 30% 27% 16% 5% 1%
46% – 55%
More than 55%
figure 12: actual versus expected cost savings resulting from HR transformation, by region
Americas 16% 30% 41% 8% 3%
Anticipated
3%
Up to 5%
Asia Pacific 9% 45% 27% 5% 9% 5%
6% – 15%
EMEA 13% 23% 30% 27% 6% 2%
16% – 25%
26% – 35%
Americas 21% 32% 28% 12% 7% 36% – 45%
Actual
Asia Pacific 14% 29% 38% 5% 10% 5% 46% – 55%
More than 55%
EMEA 20% 28% 27% 23% 2%
Conducted by SharedXpertise in association with ADP [13]

14. research findings
HR transformation outcomes, continued
findings
outcomes versus expectations Applying a 5-point scale to respondents’ performance (where
performance that is far below expectations=1, and
Similar to prior years, respondents report best results from performance that far exceeds expectations=5), on the whole
their HR transformation efforts in organisational management respondents are not terribly happy with their performance.
areas, including aligning the organisation around common The highest performing reported area, adding and/or
objectives (79% of respondents say they exceed or meet improving service for line management and employees,
expectations in this area) and responding to organisational achieves only 2.89 points on the 5-point scale. The
changes (73% meet or exceed expectations in this area). performance band is fairly narrow, though, as the lowest
Respondents say they most often exceed expectations in performing area, freeing internal HR staff to focus on strategic
adding or improving service for issues, scores 2.62 points on the 5-point scale.
best results in HR transformation
line management and employees;
organisational 22% of all respondents say they That said, organisations appear to be doing a reasonably good
job of matching areas of importance (see the why
management have exceeded expectations in
that area. organisations are transforming section) to performance.
Generally, organisations are performing best in the areas that
On the other hand, respondents rate themselves worst at they deem important, with the single exception being the
leveraging HR transformation to free internal HR staff to focus objective of freeing internal HR staff to focus on strategic
on strategic issues (46% say the fall below expectations in this issues, which has the lowest reported performance of all key
area) and benefiting from a new technology to empower line performance areas.
management (42% say they fall below expectations in this
area); 40% of respondents also say they are failing to access
external sources of talent, expertise or technology.
worst results in HR transformation
freeing HR staff
to focus on
strategic issues
[14] Conducted by SharedXpertise in association with ADP

15. research findings
figure 13: performance versus expectations in key HR transformation performance areas, all respondents
To align the organisation on common objectives 8% 71% 21%
To respond to organisational changes 12% 61% 27%
To add and/or improve service for line management and employees 22% 50% 29%
To reduce cost or better manage the cost of internal processes 18% 51% 31%
To facilitate reporting 17% 52% 31%
To concentrate resources on core business 16% 53% 31%
To access external sources of talent, expertise or technology 9% 51% 40%
To benefit from a new technology to empower line management 10% 48% 42%
To free internal HR staff to focus on strategic issues 11% 43% 46%
exceeds meets falls below
figure 14: importance of and performance in key HR transformation performance areas
A
B
D C
E
F
performance
G
H
I
importance
Importance Performance
Key Performance area (% of respondents (how organisations
selecting as perform on a 5-point
important) scale)
A To add and/or improve service for line management and employees 60% 2.89
B To align the organisation on common objectives 59% 2.87
C To reduce cost or better manage the cost of internal processes 63% 2.86
D To facilitate reporting 29% 2.86
E To respond to organisational changes 59% 2.85
F To concentrate resources on core business 39% 2.83
G To access external sources of talent, expertise or technology 19% 2.66
H To benefit from a new technology to empower line management 38% 2.63
I To free internal HR staff to focus on strategic issues 59% 2.62
Conducted by SharedXpertise in association with ADP [15]

16. research findings
HR transformation outcomes, continued
findings
hurdles to HR transformation existing HR staff is virtually unchanged (62% in 2010; 63% in
2009). Underestimation of resources needed grew the most,
Across all seven years we’ve been conducting this research, with 52% selecting this hurdle in 2010 versus 40% in 2009.
the main hurdles to HR transformation have remained Difficulty in dealing with national/cultural differences grew by
unchanged, with skills of existing HR staff at the top of the list 9 percentage points, from 20% in 2009 to 29% in 2010.
every year. Other top hurdles continue to include Opposition from workers’ councils, never selected by many
underestimation of resources needed (52% selected this respondents from the start, dropped the most, from 13% in
hurdle), lack of adequate technology (41% selected this 2009 to 6% in 2010. Internal bureaucracy dropped by 6
hurdle), and internal bureaucracy (40% selected this hurdle). points, from 46% in 2009 to 40% in 2010.
In 2009, we noted a reversal of a trend that we had seen in Regional differences in hurdles to HR transformation are fairly
prior years: for the first time it appeared that some hurdles limited, with all three regions selecting the same two top
were declining. In 2008 we noted that 7 of the 10 identified hurdles: skills of existing HR staff as the number one (55% of
hurdles received higher responses between 2006 and 2008. In Americas respondents; 84% of Asia Pacific respondents; 64%
2009, all but one (opposition from worker’s councils – and of EMEA respondents), and underestimation of the resources
that had only a very slight increase) experienced a decrease needed as number two (49% of Americas respondents; 56% of
(meaning fewer respondents selected almost every hurdle in Asia Pacific respondents; 58% of EMEA respondents).
2009 versus what they noted in prior years). The 2010 results
do not carry forward that trend; instead, we see a mixed bag,
with some hurdles declining whilst others are increasing.
Overall, the proportion of respondents who selected skills of
[16] Conducted by SharedXpertise in association with ADP

17. research findings
figure 15: importance of and performance in key HR transformation performance areas, all respondents, 2009 –2010
63%
Skills of existing HR staff
62%
40%
Underestimation of the resources needed
52%
40%
Lack of adequate technology
41%
46%
Internal bureaucracy
40%
36%
Lack of employee and business line buy-in
36%
2009
20%
Difficulty in dealing with national/cultural differences
29% 2010
23%
Lack of senior management support
24%
17%
Difficulty in building a justifiable business case
20%
15%
Regulatory constraints
15%
13%
Opposition from workers councils
6%
% who select
figure 16: importance of and performance in key HR transformation performance areas, all respondents, by region
55%
Skills of existing HR staff 84%
64%
49%
Underestimation of the resources needed 56%
58%
41%
Lack of adequate technology 40%
41%
42%
Internal bureaucracy 40%
39%
41%
Lack of employee and business line buy-in 36%
32%
26%
Difficulty in dealing with national/cultural differences 28%
30%
25%
Lack of senior management support 16%
25%
19%
Difficulty in building a justifiable business case 24%
22%
14%
Regulatory constraints 20%
9%
7%
Opposition from workers councils 4%
3%
% who select
Americas Asia Pacific EMEA
Conducted by SharedXpertise in association with ADP [17]

18. research findings
outsourcing and shared services
headlines
• Across the last three years, the proportion of respondents who say they are currently outsourcing HR services or plan to
outsource them has declined, from 65% (in 2008) to 54% (in 2010).
• Whilst outsourcing remains more common in organisations in the Americas than in other regions, American organisations
have experienced the greatest decline in percentage who say they are outsourcing or plan to outsource HR processes.
• Although HR outsourcing is down as a whole, a few individual processes experienced an increase in outsourcing between 2009
and 2010; the highest increase is in assessment/performance appraisal, rising from 19% in 2009 to 26% of respondents in
2010 saying they are/are considering outsourcing. Payroll also saw an increase, from 80% in 2009 to 84% in 2010.
• The greatest declines were in leave administration (52% in 2009; 34% in 2010) and recruitment/selection (47% in 2009; 37% in
2010).
• Health and welfare benefits show the greatest variation amongst regions, with 82% of Asia Pacific organisations outsourcing/
considering outsourcing the process, versus Americas organisations (62% of respondents) and EMEA orgnisations (50% of
respondents).
• Nearly three quarters (73%) of all respondents say they develop and/or use their own process to identify and select their
provider(s); the last three years has seen a decline in the use of consultants or sourcing advisors, from 49% in 2008 to 36% in
2010.
• The issuing of both requests for information (RFIs) and request for proposals (RFPs) is down in 2010 over 2009 (RFIs: 65% in
2009 to 51% in 2010; RFPs: 76% in 2009 to 65% in 2010).
• The top outsourcing provider selection criterion is proven ability to meet service levels, followed by functional coverage and
expertise, then price followed by multi-country capabilities. Amongst the three regions, all rank the same criteria in the top
three, although in different orders.
• Organisations most often budget less than US$1M annually for HR outsourcing (41% of all respondents), followed by US$1M –
US$10M (30% of all respondents).
• Analysis of year-over-year HR outsourcing budgets indicates growth at both ends of the budget scale, with an expanding
proportion budgeting either less than US$1M or more than US$11M.
• Nearly half of all respondents (48%) say they expect to increase HR outsourcing budgets over the next three years, most often
by up to 24%. That proportion of respondents shows an increase over 2009, when it was 42%, but still does not match 2008’s
55%.
• In spite of the fact that a smaller percentage say they are currently outsourcing or anticipate outsourcing HR services, over the
last two years we have seen a significant decline in the proportion of respondents who say they anticipate their HR
outsourcing budgets to decrease, coupled with a significant increase in the proportion of organisations that anticipate their
budgets to stay the same.
• Just about two-thirds of all respondents (66%) say they manage one or more HR process(es) through a shared services model,
a proportion that is essentially unchanged from 2009’s 68%.
[18] Conducted by SharedXpertise in association with ADP

19. research findings
outsourcing and shared services, continued
findings
outsourcing practices • The Americas has seen a precipitous and steady decline
from 83% saying they are/are considering outsourcing in
Across the past three years, the proportion of respondents 2008 to 60% in 2010;
who say they are currently outsourcing or considering
outsourcing HR processes has slowly declined, from 65% in • Asia Pacific experienced a sharp increase in 2009 over
2008 to 59% in 2009, and 54% in 2010. These declines in 2008, from 33% to 56% outsourcing/considering
outsourcing do not appear to be impacted by organisation outsourcing, but then a fairly steep decline to 42% in
size; various employee sizes experienced growth whilst others 2010;
experienced decline, in no clear pattern.
• EMEA has seen a steady but very slow decline from 60%
HR outsourcing remains more common in the Americas (60% saying they are/are considering outsourcing in 2008 to
of respondents say they outsource or plan to outsource HR 56% in 2009, and 54% in 2010.
processes) than in either EMEA (54% of respondents) or Asia
Pacific (42% of all respondents). However, HR outsourcing has
predominantly experienced a decline across all regions in
recent years:
figure 17: outsourcing declining, all respondents and by region
year all americas asia pacific emea
2008
% outsourcing HR
processes
65% 83% 33% 60%
2009
% outsourcing HR
processes
59% 64% 56% 56%
2010
% outsourcing HR
processes
54% 60% 42% 54%
Conducted by SharedXpertise in association with ADP [19]

20. research findings
outsourcing and shared services, continued
findings
outsourcing practices, continued provider selection
Transactional processes are more likely to be outsourced, internal and external resources
whilst strategic processes are more often retained in house, a Nearly three quarters (73%) of all respondents say they
finding that has been consistent across all years we have develop and/or use your own process to identify and select
conducted this research. With HR outsourcing as a whole their provider(s), down from 2009’s 87%. (It appears now that
down, a few individual processes experienced an increase in 2009, during which there was a significant jump over 2008’s
outsourcing between 2009 and 2010. The highest increase in 70% figure, may have been an anomaly.)These numbers do
outsourcing is in assessment/performance appraisal; although not vary significantly by region, although organisations in
still uncommon, it rose from 19% in 2009 to 26% of EMEA are more likely to develop and/or use your own process
respondents in 2010 saying they are/are considering to identify and select their provider(s) than are their
outsourcing. Payroll, always the most commonly outsourced counterparts in other regions (78% for EMEA; 75% for Asia
HR process, also saw an increase, from 80% in 2009 to 84% in Pacific; 70% for Americas).
2010.
The last three years has seen a decline in the use of
Leave administration saw the greatest decline, falling from consultants or sourcing advisors. A significantly smaller
52% in 2009 to 34% in 2010. Recruitment/selection also saw a percentage of respondents in 2010 say they engage a
decline, down from 47% in 2009 from 37% in 2010. consultant or sourcing advisor than did in 2009 – down to
Organisations in all regions are most likely to outsource/ 36% from 51% in 2009 (and a nearly equal 49% in 2008).
consider outsourcing payroll, and least likely to outsource/ There is very little difference across regions in the use of
consider outsourcing the entire HR function. Health and consultants and sourcing advisors; 38% of Americas
welfare benefits show the greatest variation amongst regions, respondents, 42% of Asia Pacific respondents, and 35% of
with 82% of Asia Pacific organisations outsourcing/ EMEA respondents say they use consultants and sourcing
considering outsourcing the process, versus Americas advisors.
organisations (62% of respondents) and EMEA orgnisations RFIs and RFPs
(50% of respondents). EMEA organisations are more likely to
outsource/consider outsourcing expatriate and relocation Just over half of companies (51%) issue requests for
administration (62% of respondents) than are their information (RFIs) as a part of their provider selection
counterparts in the other regions (55% for Asia Pacific process, down from 2009’s 65% and just about the same as
organisations; 35% for Americas organisations). And, Asia 2008. Organisations in EMEA and the Americas are more likely
Pacific respondents are more likely to outsource/consider to issue RFIs (56% and 51% respectively) than are their Asia
outsourcing performance appraisal (42% of respondents) than Pacific counterparts (42% of respondents).
are their colleagues in EMEA (34% of respondents) and the
As we have found over time, the issuing of requests for
Americas (14% of respondents).
proposals (RFPs) is more common than the issuing of RFIs,
with 65% of all respondents saying they do so. Here, too, the
proportion is down from 2009, when 76% of all respondents
indicated they issued RFPs. Again here, organisations in EMEA
and the Americas are more likely to issue RFIs (68% of
respondents from each region) than are their Asia Pacific
counterparts (42% of respondents).
figure 18: provider selection trends
organisations that
develop/use their
year own process to organisations that
identify/select engage consultants/ organisations that organisations that
provider(s) advisors issue RFIs issue RFPs
2009 87% 51% 65% 76%
2010 73% 36% 51% 65%
[20] Conducted by SharedXpertise in association with ADP

21. research findings
figure 19: outsourcing practices by process, 2008 – 2010
Payroll 61% 23%
Pensions administration 55% 13%
Health & welfare benefits 47% 13%
HRIS 36% 15%
Expatriate and relocation 30% 18%
Stock options administration 30% 12%
Training/development 14% 23%
Recruitment/selection 22% 15% Currently
Outsource
Leave 24% 10%
Plan to
Assessment/performance appraisal 15% 11%
Outsource
Compensation 10% 10%
Career & succession planning 7% 6%
Employee communications 4% 9%
Entire HR function 5% 2%
0% 20% 40% 60% 80% 100%
% who select
figure 20: currently outsourcing/planning to outsource by process, by region
Payroll
Pensions administration
Health & welfare benefits
HRIS
Expatriate and relocation administration
Stock options administration
Recruitment/selection
Americas
Training/development
Asia Pacific
Leave
EMEA
Assessment/performance appraisal
Compensation
Employee communications
Career & succession planning
Entire HR function
0% 20% 40% 60% 80% 100%
% who select
Conducted by SharedXpertise in association with ADP [21]

22. research findings
outsourcing and shared services, continued
findings
provider selection, continued
provider selection criteria
The top four provider selection criteria remain unchanged
over the previous four years, although, as we noted last year,
they regularly change positions. In 2010, the top provider
selection criterion is proven ability to meet service levels,
followed by functional coverage and expertise (these two
were in the reverse positions in 2009), then price followed by
multi-country capabilities (each of which were in the same
position in 2009). The only notable change between 2009 and
2010 is that size and market position has moved up in
importance; whilst still not in the top of the list, that criterion
moved from thirteenth position in 2009 to ninth in 2010.
Amongst the three regions, all rank the same criteria in the
top three, although in different orders. The Americas and Asia
Pacific respondents rank the same top three as the overall
rankings: proven ability to meet service levels ranks first,
functional coverage and expertise ranks second, and price
ranks third. EMEA respondents, however, rank price at the
top, followed by functional coverage and expertise, then
proven ability to meet service levels. Other significant
variances amongst the three regions are that respondents in
the Americas and EMEA rank size and market position in the
middle of the criteria set (eighth and seventh respectively)
whilst Asia Pacific respondents rank it near the bottom,
thirteenth. Likewise, Asia Pacific and EMEA respondents rank
cultural match in the middle of the criteria set (sixth and
eighth respectively), whilst Americas respondents rank it
closer to the bottom, in the twelfth position.
[22] Conducted by SharedXpertise in association with ADP