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Towers Perrin HR function effectiveness and technology specialists review and interpret the brand-new results of Towers Perrin's HR service delivery research. You'll learn what organizations are focused on now and how they are planning for the future -- despite an uncertain economic climate.
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© 2009 Towers Perrin
Leading the Charge, Driving the Change:
Delivering the HR of the Future
Towers Perrin 2009 HR Service Delivery Survey
July 30, 2009
© 2009 Towers Perrin 2
About the HR Service Delivery Survey
Each spring, Towers Perrin surveys HR, HR operations and service delivery
professionals globally on their organizations’ HR service delivery strategies,
plans, tactics and tools
New this year: Modules on HR shared services and
HR outsourcing effectiveness
Fielded in March and April 2009, and drew responses from 332 companies
headquartered in North America, Europe and Asia
This year’s survey covered numerous content areas, including
HR service delivery priorities
HR function/organization design
HR technology and systems
Talent management approaches
Web 2.0 in HR
Employee/manager self-service
HR staff ratios
HR shared services approaches
and metrics
HRO effectiveness
HRO governance
© 2009 Towers Perrin 3
Headline #1:
Cost has emerged as a top service delivery issue for the first time
Top 10 HR Service Delivery Issues (top three frequency)
13%
7%
15%
9%
9%
2%
3%
9%
3%
4%
13%
16%
3%
8%
5%
5%
6%
4%
5%
3%
9%
12%
6%
6%
7%
6%
6%
2%
10%
4%
First Second Third
Talent/performance systems
Streamline processes/systems
Cost
More involvement in strategic, business-driven issues
Upgrade HR system
Define human capital metrics and dashboards
Manager self-service
New HR system
Accuracy of data
Systems integration
© 2009 Towers Perrin 4
Most organizations are focusing on cost-reduction strategies
Activities Done or Considered Due to the Economic Downturn
(n = 290)
65%
45%
37%
30%
22%
21%
Focus more on cost-reduction strategies within
our service delivery approach
Postpone certain service delivery initiatives
Shrink infrastructure supporting service
delivery (e.g., reduce staff)
Standardize service delivery tactics across all
locations (i.e., both domestic and international)
Try or consider new service delivery strategies we
would not have considered otherwise
Accelerate service delivery decisions we
would have made anyway
© 2009 Towers Perrin 5
Headline #2:
Technology spending is not the target for these cost savings
Spending on HR Technology vs. Prior Year
8%
22%
9%6%
55%
6%
15%
43%
25%
11%
(>20%
reduction)
(<20%
reduction)
Same (<20%
increase)
(>20%
increase)
(2008 Survey n = 382; 2009 Survey n = 331)
2008 Survey 2009 Survey
© 2009 Towers Perrin 6
Headline #3:
Who’s doing what…
Companies Undertaking Initiatives in Past 18 Months
Introduced a new channel of HR delivery
Sought to increase alignment of HR
strategy with business strategy
Reengineered key HR processes
Implemented a new, robust HRMS
Implemented a shared services model
Implemented and leveraged self-service
(employee and/or manager self-service)
Refocused the role of the HR business partners
Developed a standard global data architecture for HR
data
Note: Base is those who have undertaken the initiative.
53
57
64
86
129
133
208
209
© 2009 Towers Perrin 7
…and what’s paying off the most
25%
18%
13%
19%
19%
16%
12%
9%
19%
26%
19%
14%
6%
24%
22%
47%
42%
31%
52%
43%
4%
6%
10%
8%
22%
9%
14%
12%
6%
15%
17%
22%
12%
17%
21% 36%
49%
37%
4%
3%
Well above expectations Slightly above expectations Met expectations Slightly below expectations Well below expectations Too early to tell
Results Achieving Expectations Among Those 76%-100% Complete
Introduced a new channel of HR delivery (n=36)
Sought to increase alignment of HR strategy with
business strategy (n=68)
Reengineered key HR processes (n=56)
Implemented a new, robust HRMS (n=32)
Implemented a shared services model (n=25)
Implemented and leveraged self-service (employee
and/or manager self-service) (n=48)
Refocused the role of the HR business partners
(n=47)
Developed a standard global data architecture for
HR data (n=23)
© 2009 Towers Perrin 8
Headline #4:
Talent management is still top of mind…even in this economy
Top 10 HR Service Delivery Issues (top three frequency)
(n=332)
Talent/performance systems
Streamline processes/systems
Cost
More involvement in strategic, business-driven issues
Upgrade HR system
Define human capital metrics and dashboards
Manager self-service
New HR system
Accuracy of data
Systems integration
Recruiting/staffing services/systems 12%
13%
14%
15%
16%
17%
18%
23%
24%
35%
35%
© 2009 Towers Perrin 9
Methods Primarily Used to Support Each Function
Provided though
current HRMS system
Outsourced or
best of breed
Custom/in-house
developed tool
Manual/
paper-based
N/A to our
organization
Compensation — base pay (n=309) 44% 22% 19% 14% 1%
Compensation — variable pay/bonus
(n=307)29% 23% 25% 20% 3%
Workforce analytics (n=270) 24% 19% 20% 23% 14%
Recruiting/staffing — internal (n=318) 19% 59% 9% 11% 2%
Recruiting/staffing — external (n=320) 16% 66% 6% 10% 2%
Learning management and training
(n=303)16% 53% 16% 12% 3%
Onboarding (n=273) 16% 22% 15% 39% 8%
Performance management and goal
setting (n=311)15% 32% 21% 29% 3%
Compensation — sales/incentive (n=286) 15% 19% 21% 19% 26%
Career development/planning (n=274) 11% 24% 17% 36% 12%
Succession planning (n=282) 8% 23% 18% 42% 9%
A variety of methods support the delivery of talent management
programs — from HRMS, to outsourced, to paper-based processes
© 2009 Towers Perrin 10
Manager self-service (MSS) is still growing, with significant
gains expected in onboarding and succession planning
MSS Availability
62%
55%
56%
53%
50%
48%
47%
46%
28%
21%
21%
18%
6%
8%
7%
8%
10%
6%
4%
8%
8%
8%
7%
11%
9%
6%
8%
12%
10%
8%
7%
8%
11%
9%
8%
13%
19%
18%
16%
22%
26%
26%
29%
37%
40%
34%
37%
56%
59%
49%
55%
72%
View applicant résumés
Review/update employee performance
Initiate/approve job requisitions
Track status of applicants
Post jobs
Plan annual incentive pay
View employee data history
Approve training classes for employees
Extend offers
Scan existing employee population for suitable candidates
Onboard new employees
Perform succession planning activities
Workforce planning (project future workfore demand and supply)
In place now During 2009 In 2010 Beyond 2010 or no plans
(n = 302-314)
© 2009 Towers Perrin 11
While technology is effective in helping meet some key talent
management objectives, there’s still a long way to go
28%
26%
21%
17%
16%
15%
12%
12%
11%
8%
6%
39%
39%
44%
46%
49%
40%
41%
36%
36%
34%
35%
25%
25%
24%
19%
16%
32%
30%
35%
36%
34%
31%
6%
7%
10%
14%
15%
11%
16%
14%
14%
17%
24%
4%
4%
7%
4%
3%
2%
3%
2%
3%
Effectiveness of Technology in Helping Meet Talent Management Objectives
Compensation — sales/incentive (n=158)
Compensation — base pay (n=261)
Compensation — variable pay/bonus (n=237)
Learning management and training (n=255)
Recruiting/staffing — internal (n=277)
Succession planning (n=138)
Workforce analytics (n=166)
Recruiting/staffing — external (n=281)
Career development/planning (n=140)
Performance management and goal setting (n=210)
Onboarding (n=143)
Very effective Somewhat effective Neutral Somewhat ineffective Very ineffective
1%
1%
© 2009 Towers Perrin 12
Headline #5:
Web 2.0 tool usage is on the rise within the enterprise and HR
Plans to Launch Web 2.0 Tools
Note: Base is all respondents excluding insufficient personal knowledge.
24%
23%
23%
22%
17%
6%
8%
5%
5%
14%
16%
19%
19%
18%
10%
53%
53%
48%
49%
52%
78%
6%
5%
5%
5%
4% 2%
3%
3%
5%
Wikis (n=197)
Blogs (n=199)
Forums (n=188)
Podcasts (n=198)
Social networking (n=205)
Social bookmarking (n=304)
Already in place Yes, currently under development Yes, within a year Yes, no definite time frame No
© 2009 Towers Perrin 13
HR foresees numerous benefits from the use of Web 2.0 tools
Reasons for Deploying Web 2.0 Tools for HR Purposes
(n = 68-74)
36%
26%
25%
24%
23%
21%
20%
19%
16%
16%
37%
27%
37%
38%
18%
17%
25%
14%
14%
25%
11%
14%
13%
4%
15%
13%
15%
13%
7%
14%
4%
10%
11%
21%
8%
14%
14%
29%
14%
20%28%
25%
29%
33%
31%
34%
22%
22%
19%
15%Enable knowledge management and collaboration within teams
Increase engagement among all employees within company
Enable knowledge management and collaboration between departments
Increase effectiveness of onboarding and integration
Increase individual and group productivity
Increase engagement among high-performing employees
Increase employee engagement among Generation Y
Search internal talent pool for individuals with right skills
Improve peer-to-peer support
Increase employee engagement among affinity groups
Extremely important Important Moderately important Slightly important Not at all important
© 2009 Towers Perrin 14
HR is playing a major role in it’s own use of these applications…
(n = 81)
68%
67%
62%
61%
48%
44%
32%
27%
7%
4%
HR’s Role in Setup and Deployment of Tools for HR Purposes
Ongoing governance
Content generation
Catalyst for initial implementation
Involved in change management/communications
Creation of policies
Content maintenance
Risk identification/mitigation
HR not involved
Measurement
Other
© 2009 Towers Perrin 15
…but is lacking a strong role for enterprise-wide Web 2.0 applications
(n = 31)
HR’s Role in Setup and Deployment of Tools for Broader Organization
42%
35%
32%
31%
24%
23%
19%
14%
31%
3%
Creation of policies
Involved in change management/communications
Content generation
Catalyst for initial implementation
Content maintenance
Ongoing governance
Risk identification/mitigation
Measurement
HR not involved
Other
© 2009 Towers Perrin 16
Headline #6:
Shared services and outsourcing share consistent goals and results
Top Reasons HR Shared Services Organization Was Created
22%
20%
17%
16%
11%
6%
4%
40%
48%
40%
35%
25%
(n = 100)
Eliminating the distraction of administrative and transactional
HR work to focus on more strategic work
Ongoing, longer-term operational cost savings
Standardizing HR processes throughout the business
Substantial improvements in HR service quality beyond what you
could achieve on your own at the available level of investment
Changing the behaviors of employees/managers
As part of a broader HR transformation effort
Substantial improvements in the timeliness, accuracy and
meaningfulness of the workforce information
Substantial productivity improvements in HR
Changing the behaviors of HR
As part of a move to a broader Corporate Shared Services function
Reduced capital expenditures
Obtaining a higher level/quality of service and support than that
available through internal IT
1
2
3
4
© 2009 Towers Perrin 1717
20%
10%
5%
3%
73%
73%
50%
35%
23%
(n = 40)
The reasons for creating shared services are similar to the reasons
that organizations outsource
Cost savings
Eliminating the distraction
of administration and transactional HR work
HR service quality improvements
Standardized HR processes
Changing behaviors of employees and managers
Substantial improvements in timeliness, accuracy and meaningfulness of
workforce information available to management
Facilitate mergers and acquisitions
Obtain higher level of service and support
Acceptance by business as a strategic partner
Top Reasons for Outsourcing
1
2
3
4
Shared Services Ranking
© 2009 Towers Perrin 1818
Organizations that outsource are improving over
time in terms of realizing results against many of their goals
93%
75%
64%
50%
43%
37%
7%
4%
5%
14%
43%
11%
20%
25%
21%
20%
13%
50%
55%
25% 25%
50%
29%
14%
7%
Successful Neutral Unsuccessful Too soon to tell
2009 2008
Average
Score
3.4 2.9
4.7 4.0
3.9 3.8
3.5 3.1
3.1 3.0
3.0 2.0
3.1 3.3
4.1 3.6Standardized HR processes (n=14)
Facilitate mergers and acquisitions (n=4)
Cost savings (n=28)
HR service quality improvements (n=20)
Eliminating the distraction of administration and
transactional HR work (n=28)
Obtain higher level of service and support (n=7)
Substantial improvements in timeliness, accuracy and
meaningfulness of workforce information available (n=7)
Changing behaviors of employees and managers (n=8)
© 2009 Towers Perrin 19
Headline #7:
The changing face of HRO
52%48%
23%
77%
43%57%
(n = 40)
Approach to Transforming HR Delivery Model in the Context of HRO
“Lifted and shifted”
“Transferred and transformed”
Rookies Veterans
Total
(n = 27)(n = 13)
© 2009 Towers Perrin 20
How well results achieved through
HR transformation met expectations
83%
58%
67%
43%
57%
47%
17%
26%
33%
27%
25%
29%
14%
40%
16%
33%
33%
13%
40%
42%
21%
29%
7%
How Well Results of Transformation Met Expectations
3.3
4.2
3.4
3.5
3.4
3.7
3.9
Average
Percentage
Complete
46%
70%
41%
39%
46%
56%
63%
53%3.1
Average
Score
Implemented a new, robust HRMS (n=5)
Implemented a shared services model (n=19)
Developed a standard global data architecture
for HR data (n=9)
Refocused the role of the HR business partners (n=15)
Sought to increase alignment of HR strategy
with business strategy (n=12)
Implemented and leveraged self-service (n=14)
Introduced a new channel of HR delivery (n=7
Reengineered key HR processes (n=15)
Above expectations Met expectations Below expectations Too early to tell
© 2009 Towers Perrin 21
“If we had known then….”
Attributes most important in initial selection process and now
20%
20%
Attributes Ranked by Change in Importance
8%
28%
25%
50%
28%
38%
43%
3%
23%
18%
38%
15%
20%
13%
58%
28%
25%
43%
0%
30%
23%
63%
35%
33%
53%
13%
48%
65%
Quality of staff/expertise
Technological capabilities
Flexibility to meet your specific needs
Contract terms and conditions
Ability to transform HR processes
Service levels promised
Per-employee costs
Geographic reach/ability to service employees working outside your home country
Cultural match
Transition approach (e.g., methods, tools, project management skills)
Prior experience providing HRO services
Risk management processes
Implementation costs
Financial stability (of the service provider)
Prior knowledge of your organization
(n = 40)
Increased in Importance (importance was underestimated initially)
Decreased in Importance(importance was overestimated initially)
No Change in Importance
High
Low
Attributes considered most important now
Attributes considered most important in initial selection process
© 2009 Towers Perrin 22
Questions?
Tom Keebler
1 215 246 6184
Robert Zampetti
1 514 982 2099
Interested in other HR service delivery topics?
This Fall, we'll feature targeted webcasts on the following topics:
HR shared services
HR outsourcing
Best practices in total rewards portals
Best practices in onboarding/offboarding
To be notified about these events, please email either of us or hit the “Contact Us”
button on towersperrin.com and we'll make sure that you are included.