Evolving Priorities and the Future of HR Service Delivery and Technology

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Despite the economic downturn, organizations continue to take a long-term view of the HR function and see value in supporting it in order to achieve key business goals. Most are continuing to invest in HR technology, and there remains a widespread interest in technologies that support talent and performance management.

HR Technology Budgets Remain Intact

According to Towers Perrin's recent HR Service Delivery Survey of over 330 global organizations:

• 21% of organizations plan to increase their HR technology spending this year.
• 43% will maintain their current level of investment.
• 36% do intend to decrease their budget.

While some organizations reported a modest tapering off of planned technology investments, it's clear that companies no longer view HR technology as a discretionary cost to be curbed during tough times. Instead, the prevalent view seems to be that HR is a needed partner, able to help the business identify cost savings and position the organization for future success. Despite some caution about spending, companies see a proven value in HR technology and are willing to make the investments needed to sustain organizational effectiveness, workforce planning and long-term growth.

Talent and Performance Management

Talent and performance management systems remain the top priority for HR service delivery professionals (see exhibit). Survey respondents specifically cite onboarding and learning management as two important areas for expansion.

However, 2009 showed organizations taking a more cost-effective tack than in prior years. They intend to streamline their existing investments in processes and systems, rather than focus on upgrading and enhancing service delivery systems. This new focus takes a more integrated view of HR service delivery systems and technologies already in place, which means closer alignment with the business to ensure that its priorities are addressed. It also allows companies to take stock of existing service delivery investments, identify gaps or areas for improvement, and determine effective solutions.

The Ongoing Evolution of the HR Function

Prior to the economic downturn, many organizations were engaged in HR transformative efforts, including human resource management and self-service. Today, there is a clear focus on leverage — from making better use of shared services and centralized structures, to realizing cost savings through HR outsourcing.

According to our survey respondents:

• Fewer than 30% do not use shared services in delivering HR services.
• Only 12% have large-scale HR outsourcing arrangements.
• Nearly two-thirds (64%) have no plans to change their HR structure in the next 18 months.

Those companies that are planning changes to their HR structure are committed primarily to one objective: moving to or expanding a shared services environment with HR centers of excellence and HR business partners. In fact, one in five organizations intends to move toward a shared services model for the first time.