Nearly half of all organisations intend to restructure their HR departments over the next few years in a bid to cater more effectively to the changing needs of the business.
According to professional services firm Tower Watson’s HR service delivery survey conducted among HR and HR/IT executives working at 628 organisations across the world, just under two out of five planned to move or revert back to a shared services environment.
About 31% said that they expected to increase the number of shared services facilities that they used, while just over a quarter intended to outsource more of their HR activities.
Three quarters of companies operating in only one country indicated that they preferred to have a single centralised HR department, however, while just over two thirds of global businesses opted for HR functions that covered local geographies but were subject to corporate oversight.
Mike DiClaudio, head of Tower Watson’s HR service delivery practice for Europe, the Middle East and Africa, said: “Companies are increasingly gearing up for large-scale investment in HR change, with the number of organisations planning a major restructure increasing by 75% compared to last year. These are major change projects that take a lot of planning and investment and are not taken on lightly.”
After the last few years of economic uncertainty and a focus on making cost savings, however, it was now understood that change was necessary if HR functions were to “effectively service organisations that have themselves changed significantly over the past few years”, he added.
In order to support such change, just under a third of respondents said that they intended to boost their investment in HR technology over the coming year. Some 53% expected expenditure in this area to remain the same as last year, while only 16% thought tech spend would fall.
“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,” DiClaudio explained.
The top three areas for investment comprised rolling out additional functionality from incumbent vendors, upgrading existing HR systems and expanding current self-service functionality. A third of those questioned also expected to spend money on Software-as-a-Service offerings over the year ahead.
Key aims behind their tech expenditure included boosting departmental efficiency, encouraging more collaboration, improving quality and cutting costs.
