Changes on the Horizon for HR Structures, Service Delivery, Towers Watson Finds

Some big changes may be in store for corporate human resource (HR) functions within the next two years as companies around the globe face mounting pressure to improve the delivery and effectiveness of HR services, according to an annual survey by global professional services company Towers Watson. The survey also suggests that companies are considering new HR technologies, will continue to invest in HR technology such as mobile applications and plan to analyze and change their HR processes.

The 2013 HR Service Delivery and Technology Survey, a global survey of 1,025 companies, found that more than one in three respondents (36 percent) will make a change to their HR structure before the end of next year. Among companies changing their HR structure, nearly three-quarters (74 percent) are doing so to realize further operational efficiencies, while more than half (53 percent) are doing so to improve quality. Another 37 percent are seeking to achieve cost savings or pursuing a change in business strategy (34 percent).

Regardless of reason, organizations that are changing their HR structures are overwhelmingly moving toward shared services, according to this survey. Almost half (49 percent) are moving toward a shared services environment with HR centers of excellence and HR business partners. The survey notes that the shared services model is the most prevalent among available options, followed by organizations' intent to outsource additional functions (17 percent) or move to a single HR function for the entire organization (12 percent).

"What is really interesting is the continued trend toward replacing core HR systems, and a willingness to invest in new technology and partners with a growing shift toward software-as-a-service," says Mike DiClaudio, global leader of Towers Watson's HR Service Delivery practice.

Indeed, the survey shows that HR technology spending remains steady and strong despite cost reductions in other areas of HR. More than half of organizations (53 percent) indicated their investment in HR technology this year will match last year's investment levels, while more than a quarter (27 percent) will either increase or significantly increase their HR technology investments.

HR also is catching on to the mobile technology trend. More than 60 percent of respondents now provide mobile access via smartphone to employees, and almost a quarter (24 percent) offer tablets. But HR-enabled applications are in their infancy: Only about one in 10 organizations currently use mobile applications for HR purposes. This trend is expected to accelerate, as 25 percent plan to offer HR-enabled applications in the next 12 to 18 months. However, fully half of organizations have no plans to leverage mobile applications before the end of 2014.

Other key findings from the survey include:

  • Streamlining business processes was ranked as the primary HR service delivery issue this year, cited by 32 percent of respondents, followed by talent and performance management systems, and greater involvement in strategic business-driven issues, both cited by 29 percent.
  • Six out of 10 organizations (59 percent) offer an HR portal to HR and employees. Another 19 percent are in the process of developing an HR portal.

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