The UK’s HR magazine has revealed research by the global professional services company, Towers Watson, showing that 31% of companies say they’re planning to increase their spending on HR technology in the coming year. The companies say that this will help them continue growth and improve efficiency in the face of a challenging economic environment.
Some 53% of the 628 global organisations involved in the research are planning to match last year’s investment levels, while only 16% expect to reduce HR technology spend.
The survey of HR service delivery trends and practices also found that more organisations were looking change the structure of their HR functions within the next few years. Some 44% of respondents said they would change their HR structure in the coming year.
Among those organisations planning to increase their investment in HR technology this year, the top three areas of investment included rolling-out additional functionality from existing vendors, upgrading HRMS systems and expanding current self-service functions. The main reasons cited for these changes were to create greater efficiency within the department, encourage collaboration of processes and investment, improve quality and lower costs.
The survey showed that, among companies making changes to their HR function, 39% would move or revert to a shared services environment, while others plan to increase the number of shared services used (31%) and outsource additional HR functions (26%). For European organisations, there was an emphasis on increasing capacity in talent and performance management software, training programmes and compensation systems.
Three-quarters of single country organisations believe in having one central HR function for the entire organisation, whereas this model only suits 32% of global organisations, which prefer HR functions that are covered by function and geography, with corporate oversight.
Comment: On the surface, this survey could indicate that, for HR departments and suppliers, the recession is almost over. Companies have postponed investment/ spending long enough: the good times are just around the corner.
Yet a more cautious interpretation of this survey might suggest that applying more technology to the HR function reduces the headcount needed – both in the HR and IT departments.
Apart from the occasional – but often expensive – glitch, systems don’t go sick, have holidays or leave the company when they have a better offer. Moreover, they work happily 24/7 and never ask for more pay. And, while many HR departments appear to be thinking that software-as-a-service (SaaS) is the up-coming thing in technology, large organisations are, increasingly, moving their investment from SaaS to the Cloud – thus effectively outsourcing their technology and maintenance requirements. HR departments may take a while to catch on to this real world trend but, when they do, IT specialists in HR systems may need to be looking for other avenues of career progression.
The future is always similar to the present but its full implications remain indecipherable.