HR service delivery: changes in structure create challenges

There has been increased adoption of cloud-based HR systems.

Technology systems have helped line managers to deal with many simple HR tasks, but they still need support. How is this and other trends influencing HR service delivery and technology priorities? Cath Everett finds out. 

It may seem ironic that – having introduced technology to help line managers do many of the things HR used to do – that a high priority for HR this year is boosting those managers’ people skills.

According to the 2015 HR Service Delivery and Technology Survey undertaken by professional services company Towers Watson, 42% of the HR and HR IT executives questioned in 798 organisations across 37 countries believe line manager training is now their top priority.

The technology has now in many cases been introduced, but the problem is that people don’t necessarily know how to manage the situation effectively.” – Tim Richard, Towers Watson

Tim Richard, leader of Towers Watson’s HR service delivery practice for Europe, the Middle East and Africa, explains: “It’s being driven by making managers more responsible for people and saying that ‘you have to manage your own workforce and we’ll give you the tools and capabilities to do it’.

“The technology has now in many cases been introduced, but the problem is that people don’t necessarily know how to manage the situation effectively.”

With high levels of adoption of cloud-based HR systems, many organisations are seeing changes to their HR structure as increasing numbers of employers move to a shared-services model in a bid to boost efficiency.

Although this shift has been part of an ongoing trend, it has spiked this year. As a result, some 42% of those surveyed said they planned to change their HR organisational structure in some way over the year ahead, compared with 35% in 2014.

Investment priorities

While many organisations are currently going for a mix of in-house and outsourced shared services centres, 21% said they planned to outsource some or more functions over the coming year, while 31% said they intended to add more services to their existing shared services environment. Typical activities include payroll, benefits and pensions.

“Shared services are the best way to take transactional activity out of the hands of business partners so they can focus on more strategic activity like advising clients and more junior staff can do things like working through compensation forms,” says Richard.

“But some of it also has to do with moving to software-as-a-service (SaaS) as it makes you think about your overall HR delivery model.”

As for expenditure on HR technology across the board, the survey indicated that, while nine out of 10 respondents expected to fork out the same or more this year than last, 12% intended to increase their investment by more than one-fifth.

The most popular way to spend the money was on replacing core HR management systems – mainly by implementing SaaS rather than on-site offerings – with more than one-third of companies planning to do so.

Second on the list were talent management packages to handle activities such as performance management and compensation, while in joint third place were portals and mobile apps.

Richard says: “There’s been a big trend to increase the use of mobile, and organisations are often doing it with a portal too to create that one-stop-shop they’ve been talking about for the last 15 years.

“Also on the rise is enabling managers to approve transactions such as salary increases or new hires, and allowing people to check in online via time and attendance apps, all using their mobiles.”

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