One positive side effect of the recession is that human resources is better poised to fulfill the strategic role long desired by executives, since taking care of talent and people issues is, more than ever, a key leadership issue. Human resources’ long-awaited metamorphosis from process-driven overseers to business plan enablers was born of economic necessity, but it’s gaining momentum thanks in part to renewed investments in technology and expanding self-service, according to The Towers Watson 2010 HR Service Delivery Survey, which annually examines the HR service delivery and technology plans and priorities of global companies.
The change couldn’t come at a better time, as savvy companies need holistic talent management and a real-time view of work force analytics to thrive in a rebounding economy.
“Executives can propel the evolutionary process by helping to define HR’s strategic mission and related data requirements,” says Courtnay Sotelo, senior consultant for the HR Service Delivery Practice at Towers Watson. “Once the vision is crafted, an HR task force can align priorities, technology and the service model to meet the company’s broader business objectives.”
Smart Business spoke with Sotelo about the evolution in HR service delivery and how executives can support the transition.
Why has talent management re-emerged as a priority?
HR leaders were sprinting toward holistic talent management before the recession but were forced to refocus in the short term amid layoffs and budget cuts. But the downturn only reinforced the need for better talent management, including real-time data and analytics, as companies struggled to quickly identify top performers and align reward programs and career paths to keep them from disengaging or defecting.
Also, disparate systems for performance management, compensation, training and development, and career management can occasionally impede HR’s ability to analyze bench depth and talent pipelines. Among other factors, the advent of a more integrated approach to talent management technology is contributing to a resurgence in talent management, with 20 percent of the 456 companies in our survey citing it as their No. 1 priority, while another 13 percent list it second. Cumulatively, this makes talent management HR’s top service delivery goal in 2010.
How is technology changing HR’s role?
Technology is no longer a discretionary expenditure; it has become the enabler of HR’s strategic vision because it provides the data to make informed decisions and creates efficiencies that maintain high service levels with less staff. Although many companies continue to rely on enterprise systems, 29 percent are now using software-as-a-service (SaaS) for some HR functions. Another 11 percent plan to use SaaS in the future, citing a desire for quicker implementation, lower costs and improved functionality. In 2010, 54 percent of companies plan to invest in HR technology in order to streamline business processes or deploy additional self-service functionality, which will further reduce processing costs and allow HR to take on a more strategic role.
Are companies turning to shared services?
The U.S. currently enjoys a competitive advantage as it leads the world in the adoption of HR shared services, which drives efficiencies through self-service and outsourcing. Shared services creates a scalable model that allows companies to adapt to changing business conditions while eliminating redundancies and creating standardized processes that have previously stymied HR productivity. Companies continue to build out shared services capabilities in 2010 and expand the roll out of manager self-service, which requires supervisors to initiate online personnel transactions, such as pay changes and performance management evaluations. HR had to persevere through a difficult change process, but once they recognized managers have accountability for their data and were able to convince them to participate, HR relinquished some control. Companies in our survey say they benefitted from a 73 percent decrease in administrative work, thanks to the initiative.
Can Web 2.0 technology benefit HR’s new agenda?
Although social media is here to stay, companies have been slow to embrace its functionality and use it to their advantage. Opportunities still exist to create efficiencies by using Web 2.0 to attract new employees, enhance corporate communications or train workers though online chat, Wikis and virtual classrooms. In contrast to e-mail, social media offers executives real-time communications functionality and opportunities to bolster employee engagement. Executives can reap the benefits and add velocity to the process by championing the cause and demonstrating an affinity for the functionality.
What else can executives do to support HR’s strategic transformation?
Although HR leaders are eager to embrace a strategic role (27 percent cite involvement in business issues as a priority), many need support crafting a complementary vision and structure. Once those elements are in place, they may finally become executives’ long-awaited strategic business partners.
Courtnay Sotelo is a senior consultant for the HR Service Delivery Practice at Towers Watson. Reach her at (415) 836-1011 or firstname.lastname@example.org.