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Companies Worldwide Spending More on HR Technology, Towers Watson Survey Finds

Companies around the world are planning to increase and redirect their investments in HR technology as they embrace talent management solutions, HR portals, software-as-a-service (SaaS) systems and mobile applications, according to an annual survey by global professional services company Towers Watson (NYSE, NASDAQ: TW). The survey also revealed that about one in three companies plan to change their HR structure in an effort to improve both efficiency and quality.

The 2014 HR Service Delivery and Technology Survey, a global survey of 1,048 companies, found that one in three respondents (33%) plan to spend more on HR technology in the coming year compared with the previous year. This includes 23% that plan to increase spending by as much as 20% and 10% that plan to increase HR technology investment by more than 20%. Only 15% plan to spend less on HR technology in the coming year.

“Despite cost cutting in some areas of HR, we are seeing a substantial spike in technology spending,” said Mike DiClaudio, global leader of Towers Watson’s HR Service Delivery practice. “Companies are realizing the value that consumer-grade technology brings to HR and are willing to make smart investments that can grow and evolve with the business. It also appears that companies are splitting their investments between core HR systems such as talent management and payroll, and next-generation technology including HR data and analytics, and integrated talent management systems.”

The survey also found a continued increase in the use of SaaS systems for core HR and talent management technologies, further adoption of mobile technologies and utilization of HR portals. Nearly half of the respondents (46%) reported using mobile technologies for HR transactions, an increase from 36% in 2013. The survey noted that there is room for much growth, as only 10% are using mobile access for a majority of HR transactions. Meanwhile, 60% of employers have an HR portal in place, up from 53% in 2013. Another 20% are in the process of developing a portal. Additionally, the adoption of SaaS increased again this year, with 40% of respondents saying they are considering SaaS as their only solution.

One in Three Companies Planning Changes to HR Structure

The survey revealed that one in three companies is planning to make changes to their HR structures either this year or next. For the second consecutive year, respondents identified streamlining their business processes as the number one HR initiative. More than half (55%) of respondents said they reengineered key HR processes over the past 18 months, while roughly half (49%) improved line managers’ people management capabilities. About one-third (36%) implemented manager and employee self-service initiatives, while 31% refocused the role of their HR business partners.

“Organizations are narrowing their focus on HR initiatives as they attempt to strike a balance among people, processes and technology priorities. We attribute this shift to high-impact HR investments, such as streamlining business processes and implementing manager self-service, to a commitment to running the HR function more like a business,” said DiClaudio.

Other key findings from the survey include:

  • Manager self-service. The adoption of manager self-service tools increased dramatically worldwide. Seventy-one percent of North American organizations are using manager self-service tools this year, compared with 61% in 2013. Similar adoption increases were experienced in Asia Pacific, and Europe, the Middle East and Africa. Worldwide, 60% of organizations want to increase their use of manager self-service tools in the future.
  • Employee engagement surveys. Nearly two-thirds of companies (63%) regularly conduct engagement surveys and use the data to direct people investments and impact their business. Companies that conduct engagement surveys have twice the satisfaction rate with the implementation of new technology, compared with companies that do not conduct surveys.

About the Survey

The 17th annual HR Service Delivery and Technology Survey was conducted in March 2014. Respondents included HR and HRIT executives at 1,048 organizations from 45 countries. Two-thirds of the respondents were large or midsize organizations with more than 5,000 employees.

About Towers Watson

Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has more than 14,000 associates around the world and is located on the web at towerswatson.com.

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