Employers increasing HR technology spend to boost growth

One-third (31%) of organisations intend to increase their spending on HR technology in the next year in order to boost growth and improve efficiency, according to a survey by Towers Watson.

In addition, more than half (53%) said that they plan to match last year’s investment levels in the coming 12 months and just 16% expect to reduce HR technology spend.

Towers Watson’s global HR service delivery survey found that the top three areas of investment include: rolling out additional functionality from existing vendors; upgrading human resource management systems (HRMS); and expanding current self-service functions.

The main reasons cited for these changes were to: create greater efficiency in the department; to encourage collaboration of processes and investment; and to improve quality and lower costs.

Mike DiClaudio, head of Towers Watson’s EMEA HR service delivery practice, said: “In many ways this year’s findings are surprising.

“Despite the obvious pressure on budgets over the past few years, many companies have decided that investment cannot be postponed any longer as HR departments face pressure to adapt and update the way services are delivered.”

The survey of HR and HR IT executives from 628 global organisations also found that, in addition to investment, more organisations were looking to change the structure of their HR functions within the next few years in order to deliver HR services effectively.

Nearly half (44%) of organisations said that they were planning a major restructure of their HR function, an increase on last year when 26% of respondents indicated they intended to do so.

Of those employers making changes to the HR structure, 39% plan to move or revert to a shared-services environment, 31% are looking to increase the number of shared services used and 26% intend to outsource additional HR functions.

DiClaudio added: “Companies are increasingly gearing up for large-scale investment in HR change, with the number of organisations planning a major restructure increasing by 75% compared to last year.

“These are major change projects that take a lot of planning and investment and are not taken lightly. After the last few years of uncertainty and cost savings, many organisations are realising that their HR structure needs to be refreshed in order to effectively service organisations that have themselves changed significantly over the past few years.”

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