leading the charge, driving the change: delivering the hr of the future

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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

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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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Page 1: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 2: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 3: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 4: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 5: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 6: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 7: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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)

Page 8: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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%

Page 9: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 10: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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)

Page 11: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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%

Page 12: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 13: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 14: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 15: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 16: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 17: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 18: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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)

Page 19: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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)

Page 20: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 21: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 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

Page 22: Leading the Charge, Driving the Change: Delivering the HR of the Future

© 2009 Towers Perrin 22

Questions?

Tom Keebler

1 215 246 6184

[email protected]

Robert Zampetti

1 514 982 2099

[email protected]

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.