How is technology affecting the role of the HR professional in large organizations?

What are the next steps HR leaders should consider when planning their 2014 budgets?

Market trends in HR service delivery and technology can be summed up in a single sentence: More than ever before, possibilities to explore and opportunities for productive change abound.

Each year, Towers Watson explores the changing landscape of HR service delivery and technology around the world through a comprehensive study of trends, strategies, tactics and tools. Participants reveal their perspectives on what excites them about the future, what holds them back and how they plan to take advantage of new opportunities.

It’s a new world in HR

There is much for HR leaders to look forward to in the next year: exploring new ideas in HR structure, taking a fresh look at processes and seizing opportunities to deploy sophisticated new technologies that can make the HR function more effective and efficient.

Our report explores each of these areas in detail, organized by four key themes that arose from this year’s research. Leading organizations see 2013/2014 as the moment to:

• Reexamine HR structure. Many organizations see new opportunities to increase HR’s strategic contributions to the business and leverage resources across the function to achieve greater efficiency and contain costs.

• Consider new technologies. Savvy companies are investing in technologies that provide the greatest near-term innovations and advances in service delivery as well as exploring the newer technologies on today’s horizon.

• Analyze and change HR processes. New technologies are only as good as the processes that guide them. To achieve high performance, HR must also take advantage of current opportunities to rethink and redesign its business processes.

• Extend manager self-service. Managers are HR’s able allies in delivering and improving HR processes and expanding your company’s offerings globally. Leading organizations give managers the tools they need to support employee engagement.

Changing HR processes: Streamline manager and HR involvement

Even the most straightforward HR tasks can be stymied by inefficient processes and cumbersome approval requirements. And then there are the more complex processes that typically make up the HR professional’s day. Poorly designed processes can cost real money when the technology designed to help administer them is prevented from doing its job. In order to take advantage of the competencies of the HR team, the knowledge of managers and the investment in sophisticated technologies, HR processes need to be intuitive, logically designed and effective in any required situation.

Our research shows that HR organizations fully understand this need. In our study, nearly half (47%) have sought to reengineer key HR processes in the past 18 months — more than have implemented a new HR management system (HRMS) or a new MSS technology combined (Figure 2). And they are making good progress: Slightly more than half (52%) report that these initiatives are more than 50% complete. Most telling is the value achieved by making the changes. More than 80% of organizations that reengineered HR processes report that results were either at or above expectations.

What makes for successful review and reengineering of HR processes? Begin with a look at how, and by whom, work is performed.

• Does it make sense from a functional and geographic standpoint?

• Is the work performed by the most capable person at the right level?

• What efficiencies can be achieved by centralizing certain tasks and decisions?

• What latitude should be given to local HR and managers?

By addressing these questions — with the aid of feedback from both HR and the business — HR can start the work of adapting processes to better suit the organization’s needs.

Effective process review also includes exploration of whether certain types of work are better performed by an employee’s manager or the HR function. Managers have come to play a pivotal role in the career development and performance management of their employees, an area once primarily HR’s domain. Managers are also expected to manage certain elements of reward programs, often including — as MSS technology has evolved — working with a compensation tool to determine pay decisions.

To empower managers through new processes and self-service technology, organizations need to cut the clutter by changing approval structures that create needless obstacles. The best example is HR’s common inability to act on decisions already made, even when the technology is in place to quickly execute them.

Fully one-quarter of organizations we surveyed require four additional manager approvals to create a new position. A similar percentage require three additional manager approvals to set performance goals and results. Nearly half of all organizations still require two manager approvals to permit time off from work.

Improved processes empower manager and HR discretion

From our perspective, the best way to change an organization is to redefine its underlying business processes. HR is well served by trusting managers to handle these processes at the lowest level possible. We’ve observed that with greater MSS capabilities, HR has relaxed its controls somewhat and is more comfortable, in the majority of cases, with simple notification for basic transactions such as goal setting, transfers and voluntary terminations.

About the survey

Towers Watson’s 2013 HR Service Delivery and Technology Survey was fielded between the first week of January 2013 and the first week of March 2013. In total, 1,025 respondents from across 32 countries participated. Roughly 42% of the survey sample was from the Asia Pacific region, including a very large sample from China. North America, Europe, the Middle East and Africa accounted for the remaining 58% of the survey respondents.

• About half of the responses came from multinational organizations.

• Two-thirds of the responses came from organizations with more than 5,000 employees.

• The survey responses came from a broad cross section of industries, with the largest number concentrated in the manufacturing sector, followed by financial services, IT and telecom, professional services, and retail.