Half of HR departments up for restructure

by HCA04 Sep 2012

In the digital world nothing stays the same for long, and it appears intentions to improve the efficiency of HR departments are on the rise.

Some 44% of companies have indicated they’re planning a major restructure this year, compared to just 26% who said restructuring was on the cards last year. The latest Towers Watson survey found very few companies intend to reduce spending on HR technology – 31% are currently planning an increase in technology expenditure, while 50% intend to equal that of last year’s budget.

For a department that’s usually in charge of guiding workplace changes, HR could find their own processes shaken up. Almost half (44%) of organisations said they are looking at a “major restructure” of their HR functions.

The international survey also found that 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.

A separate report, The Next Step’s HR Viewpoint 2012, indicated that 55.7% of HR functions in Aust/NZ have restructured over the past 12 months, and two-thirds of HR professionals indicated that frequent restructures impact on HR’s productivity and credibility.

Major change projects and HR restructures were necessary decisions but not ones that businesses had taken lightly, said Mike DiClaudio, head of Towers Watson’s EMEA HR Service Delivery practice. “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,” he explained.

A significant number of companies are looking to upgrade their HR information systems. According to Bryan Tan from Saba Software, companies are increasingly looking to cloud technology as the new frontier in HR technology solutions. “With the recent acquisitions of Taleo and SuccessFactors it is a pretty clear validation that the cloud is indeed the future of HR and learning software and many other types of software that were traditionally delivered behind the firewall,” Tan recently told HC. Many organisations are realising that to getting the best functionality doesn’t require a multi-million dollar upgrade – the new breed of cloud providers can yield better results, he added.

So far the top three areas of investment are focused on rolling out additional functionality from existing providers, upgrading HR management systems and expanding current self-service functions. Greater process integration, increased quality and lower end costs were the main reasons cited for the modifications.


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