Company investment in human resources (HR) technology and software worldwide is growing at an exponential rate according to the latest annual survey by global professional services company Towers Watson.
The 2015 HR Service Delivery and Technology Survey found that nine in ten respondents in the Europe, Middle East and Africa (EMEA) region plan to spend the same or more on HR technology this year than they did last year. Furthermore, 12% of those respondents will significantly increase their investment by more than a fifth. According to the survey, the most popular way for HR departments to spend this year’s tech budget is to replace their core HR management system, with over a third of companies planning to do so in this region – an all-time high.
However, despite recording overwhelming satisfaction with new technologies, the survey highlighted a clear opportunity for HR to automate more to increase efficiency and drive down costs. For example, nearly a third of companies are still using manual or paper methods to manage bonuses and other variable pay and 39% of companies continuing to use paper-based systems to process new joiners.
“Upgrading and consolidating technology is becoming a major priority for HR,” said Tim Richard, EMEA leader of Towers Watson’s HR Service Delivery practice. “While in the past, companies have mostly invested in separate technology for talent, compensation and performance management, there has been a dramatic shift to investing in an overarching IT system with the functionality to take care of all of these areas. Many organisations are now looking at cloud-based solutions to replace traditional HR platforms.
“That said, while many HR organisations are embracing change and capitalising on the opportunities presented by new technologies, the extent to which legacy paper systems prevail is startling. I expect as more positive case studies of tech adoption are shared with peers, confidence will naturally grow and the use of paper systems will significantly decline during the next few years.”
The survey also revealed that employer interest continues to grow in the use of mobile technologies for HR purposes with almost two-thirds of companies already using such applications or planning to introduce them in the next 12 to 18 months. In addition, 90% of companies in this region now have in place or are developing a HR portal, which is a web-based self-service site that brings together information, systems and processes in one secure location.
Other key findings from the survey include:
- Changing HR Structures – A growing number (42%) of companies are changing their HR structures in the next two years to increase efficiency and quality
- Shared Services – Shared services is the HR delivery model of choice, with 9 out of 10 HR enquiries now being solved in this way or via self-service
- Employee engagement surveys – The majority of companies in EMEA (41%) currently conduct an employee engagement survey at least annually
- Payroll – Most companies are processing payroll in-house using an automated solution both in the country where they are based (55%) and in other locations (38%).
About the Survey
The 18th annual HR Service Delivery and Technology Survey was conducted in January and February 2015. Respondents included HR and HRIT executives at 798 organizations from 37 countries. Half of the respondents are global organisations.
About Towers Watson
Towers Watson (NASDAQ: TW) is a leading global professional services company that helps organisations improve performance through effective people, risk and financial management. With 15,000 associates around the world, the company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Learn more at towerswatson.com.