A third of companies plan to spend more on HR technology

Companies plan to up their spending on HR (human resources) technology in the next year, to continue growth and improve efficiency in the face of a challenging economic environment, research has found.

In a survey of 628 companies, Towers Watson also found that over half are planning to match last year’s investment levels while only 16 percent expected to reduce HR Technology spending.

However, HR professionals have pointed out that the 15th annual survey on HR service delivery trends and practices, could be skewed, claiming that the main spending priority is on staff, rather than “fluffy staff portals” and technology services.

The survey found that in addition to investment, more organisations were looking to change the structure of their HR functions within the next few years in order to deliver HR services effectively. According to the survey, close to half of the organisations surveyed indicated they will change their HR structure in the coming year, a sharp increase from the 26 percent of respondents who were planning this last year.

Mike DiClaudio, head of Towers Watson’s EMEA HR Service Delivery practice, said: “In many ways this year’s findings are surprising. Despite the obvious pressure on budgets over the past few years, many companies have decided that investment cannot be postponed any longer as HR departments face pressure to adapt and update the way services are delivered.”

He added: “After the last few years of uncertainty and cost savings, many organisations are realising that their HR structure need to be refreshed in order to effectively service organisations that have themselves changed significantly over the past few years.

Among those organisations planning to increase their investment in HR technology this year, the top three areas of investment included rolling-out additional functionality from existing vendors, upgrading HRMS systems and expanding current self-service functions. The main reasons cited for these changes were to create greater efficiency with the department, encourage collaboration of processes and investment, improve quality and lower costs.

The survey showed that among companies making changes to their HR function, 39 percent would move or revert to a shared services environment, while 31 percent planned to increase the number of shared-services used and outsource additional HR functions.

Six out of ten organisations were also found to offer an HR portal to HR and employees, while 20 percent were in the process of developing an HR portal.

For European organisations, there was a particular emphasis on increasing capacity in talent and performance management software, training programmes and compensation systems.

However, while HR professionals agreed with the last finding, one claimed the rest of the research didn’t match her large organisations’ views.

She told ChannelBiz: “I know this is the opposite of what others may say but the reason behind this is because of the number of redundancies being made. HR departments need more people on board to manage staff who have been given their notice, as well as keep complaints and court threats at bay.

“Whilst we may need software that logs incidents and offers fluffy staff portals, it’s the number of professionals that departments should be spending their money on in this day and age.”