Introduction
This report analyses the findings of a survey of 100 HR directors and managers in the UK. The survey examined a broad range of topics relating to effective people management, including HR’s preparedness for dealing with today’s challenging economic conditions and the role of software systems, services and emerging technologies in supporting HR’s efforts. Key findings include:
HR’s readiness – and ability – to manage change
Three quarters of respondents were confident they have sufficient change management expertise to manage any necessary workforce restructuring. But if they do need to restructure, almost one in ten were not confident their organisation has the information it needs to make informed decisions about the value of individual employees.
Three quarters of respondents believed their company’s workforce strategy will be guided by advice from senior HR management, as opposed to HR simply being asked to execute the board’s decisions. However, 64% of respondents agreed that HR is primarily seen as an administrative function in their organisation, not the owner of people-based information and strategy.
Drivers and barriers to investment in HR software and services
Top drivers for investment in HR software and services were improving quality of service, cutting HR administration costs and reducing IT costs. These were followed by the need to improve the quality of management information and free HR from its administrative burden to provide more strategic input to the business. Among other factors, four out of ten respondents cited the need to reduce operational risk (e.g. the risk of relying on an ageing IT system).
Surprisingly, 44% of respondents agreed that expanding their personal experience and enhancing their CV was an important factor in determining whether to invest in HR software or services – a finding that may not please board-level executives, but one that gives an indication of the critical role software and services play in the HR manager’s role.
Just over a third of respondents (35%) plan to spend less on HR-related software and HRIT services in 2009 than 2008 – but half (51%) expect to spend the same as last year, and 14% will actually spend more.
Negative factors that influence investment were ‘lack of resource to implement projects, even if they offer potential benefits and cost savings’, closely followed by budget constraints, other HR priorities and other IT priorities.
Rapid growth of Payroll and HR Self-service
Payroll self-service is emerging as one of the most popular forms of selfservice, perhaps because its transactional nature lends itself to cost reduction initiatives. Almost six out of ten respondents either already provide online pay advice (‘electronic payslips’) or plan to do so within twelve months, while a third expect to do so long-term. Similarly, 11% of respondents enable employees to view their pay history online, with 38% planning to within twelve months. In a related field, 14% of respondents enable employees and managers to input time and expense data online, with 47% planning to do so within 12 months.
Among traditional HR capabilities, self-service adoption is climbing in areas such as recruitment, where half of respondents (51%) already enable candidates to submit applications online or plan to within twelve months, and 28% expect to enable them to track the progress of their applications within twelve months. Other key areas of adoption include HR administration (41% now or within 12 months), absence (35%), benefits (35%), and training (33%).
Divided opinion over Web 2.0
Opinion was sharply divided about the use of web collaboration tools such as blogs, wikis and social media sites. A third of respondents agreed that they provide “great ways of communicating with employees and will become increasingly important to HR over the next two years” – but another third disagreed, with smaller companies particularly unimpressed.
There was also disagreement about the use of social media sites for recruitment. Well over a third (38%) of respondents see them as an extension of traditional employee referral schemes, providing a great way to reach potential new recruits – but a quarter (26%) disagreed.
The outsourcing option
Almost a third of respondents agreed that today’s challenging economic environment will make them more likely to consider HR and payroll outsourcing.
Perennial problems in reporting and analytics
Data management, software and personnel issues continue to hold back HR’s efforts to assess trends and deliver meaningful information to senior management. 78% of respondents agreed that “the difficulty of getting relevant data together undermines my reporting and analytical capability,” and 62% of respondents agreed that they do not have the software tools they need to do anything beyond basic HR reporting. Just as significantly, almost half of respondents (46%) agreed that even if they had the right software tools, they lack sufficient analytical skills within HR to take advantage of them.
Most respondents were confident about their ability to report on the staple metrics of HR, including inwardly-focused metrics such as the composition of the workforce or ‘days to hire’. But as Webster Buchanan’s research has consistently demonstrated, HR managers tend to be less confident about reporting on how broader people-related issues affect the business. For example, only 44% claimed to be good at measuring the business impact of voluntary employee attrition, with more than a quarter (28%) admitting to being poor.