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Stories from the Market. Towers Watson’s 2012 HR Service Delivery Survey Results. October 2012. Housekeeping Items . All attendee phone lines are on mute.

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Stories from the Market

Towers Watson’s 2012 HR Service Delivery Survey Results

October 2012

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Today’s Presenters

Derek Beebe

HR Technology, Sales and Marketing Leader, Americas

Towers Watson

JT Woodson

Data, Surveys & Technology, Sales, Americas

Towers Watson

Introduction to Towers Watson’s research

  • HR Service Delivery Survey

    • An annual survey of HR service delivery practices that includes trends in technology, shared services, employee/manager self-service and talent management, now in its 15th year

  • Participants in the survey included HR and IT managers from more than 600 companies

  • The results shown in this presentation are based on the global results

Setting the context

  • Businesses are going through significant change

  • It has never been more critical that HR be highly effective at supporting business changes while simultaneously reducing its cost structure

  • Despite strenuous efforts, HR needs to make a more fundamental shift

  • HR in the future must be more agile to keep up with changing business needs

    • Continued global expansion will require increased focus on key growth and emerging markets

    • The evolving HR technology marketplace will be a key enabler of HR’s agility

Main trends in HR service delivery 2012

HR is in restructuring mode to be more efficient and cost-effective: Matrix relationships provide a governance tool while still serving business unit and geographic needs


Shared services is viewed as the key to success for HR organizations looking to meet efficiency and cost-saving objectives


Talent systems remain the top HR service delivery issue, and SaaS solutions are viewed as the most effective


HR technology spending remains steady with a mix of enhanced functionality, upgrades and new implementations and the HRMS market continues to shift toward SaaS


Portals are prevalent and can tie it all together, but they still aren’t reaching their potential: Keeping pace with mobile devices, maintaining content and increasing personalization continue to challenge organizations


Global payroll is challenging,but more global/multinational organizations are driving toward it


Towers Watson’s 2012 HR Service Delivery Survey Results

Key Findings



While a single HR function is the most prevalent HR structure, geographic and/or business unit matrix relationships are popular for global/multinational organizations…

Current Structure of HR Function

HR Business Partners tend to be aligned with the business unit and Shared Services align with geography

Polling Question #1

  • Do you anticipate changing your HR structure in 2012 or 2013?

    • Yes

    • No


… HR is in restructuring mode to be more efficient and cost-effective…

Do You Anticipate Changing Your Current HR Structure in 2012 or 2013?

Reasons for Changing Current HR Structure

No changes anticipated56%


28% in2011

n = 612


…And shared services is viewed as the key to success

Anticipated Changes to HR Structure in 2012 or 2013

The most common responses in the Other category include changes within existing framework (14 mentions), new structure yet to be determined (11 mentions), and increased centralization or regionalization (7 mentions).

Base: those anticipating making a change n = 271.


…For organizations of all sizes

Does your organization use HR Shared Services (HRSS)/Contact Center to Deliver HR Services?

The outsourcing movement has slowed:

In 2010, external models were comprised of 15% onshore and 8% offshore


But the lines aren’t so bright, even in large organizations

Does Current or Soon-to-be-Implemented Delivery Model Include the Following Features?

  • Hybrid roles continue to exist — even in large organizations

  • Communities of Interest, Shared Resource Pools and Virtual COEs are emerging features in service delivery models for organizations of all sizes

  • “Traditional” HR services also may be delivered outside of HR


Talent systems remain the top HR service delivery issue

Top HR Service Delivery Issues (Top Three by Frequency)

























n = 606


…And fuel the growth and acceptance of globally deployed self-service applications


SaaS Best-of-Breed applications are viewed as most effective

It remains to be seen if recent HRMS investments will close the gap in key talent management functions

Top five largest gaps in effectivenessPercent fewer of organizations reporting effectiveness using Manual or HRMS compared to Best-of-Breed (BoB) solutions*











* Best-of-Breed solutions used for this comparison are specifically SaaS/vendor hosted solutions.


HR technology spending remains steady…

HR Technology Spending v. Prior Years

  • 2008 Survey n = 382

  • 2009 Survey n = 331

  • 2010 Survey n = 453

  • 2011 Survey n = 437

  • 2012 Survey n = 599

Polling Question #2

  • Do you think your HR technology spending will change in 2013?

    • Increase significantly (>20%)

    • Increase moderately (<20%)

    • Stay about the same

    • Decrease moderately (<20%)

    • Decrease significantly (>20%)


…With a mix of enhanced functionality, upgrades and new implementations

Factors Accounting for Increased HR Technology Spend in 2012

Base: those expecting increased HR technology spending n = 189.


… and the HRMS market continues to shift toward SaaS –new SaaS selections (34%) has doubled since 2010 (17%) …

Is Your Organization Currently Implementing or Planning to Implement a New Primary HRMS?

New HRMS Chosen

Yes, new HRMS has been chosen


Yes, currently evaluating options



n = 618


… Increasing the opportunity to streamline processes

Approvals/Reviews Required When Managers Initiate HR/Pay Transactions


Portals are prevalent and can tie it all together…

Does your organization utilize an HR Portal?

What HR portal technology are you currently using?

Yes, we have an HR Portal that is available to both HR and employees

No, we have no plans to develop an HR Portal


No, but we are working to develop an HR Portal




Yes, we have an HR Portal that is available to HR only

n = 599

n = 355


…But they still aren’t reaching their potential

Does your HR portal provide a personalized experience?

Which of the following describes challenges with your existing HR portal?

No 40%


n = 370

n = 328

Polling Question #3

  • Do you have an HR portal deployed within your organization?

    • Yes – High utilization

    • Yes – Moderate utilization

    • No – Plan to deploy within next 6 months

    • No – No current plans to deploy


Global payroll is challenging, but more global/ multinational organizations are driving toward it

Does Your Organization Have a Single Payroll Vendor/System?

Payroll Strategy

Yes, it is not part of our core HRMS

No, with no plans to consolidate





Yes, it is part of our core HRMS

No, but we are working to consolidate them

n = 332

n = 338

Why the need to change HR now?

  • HR functions continue to evolve and change due to economic challenges and evolving business needs — agility is key

  • Leading HR functions are taking advantage of this economic cycle to re-establish themselves as strategic players in the business:

    • Streamlining transactional work

    • Increasing the skills of their HR professionals

    • Working across traditional HR silos

    • Capitalizing on SaaS technologies

  • 2012 will continue to be challenging, and HR will be pressed to continue to refine its organizational model and drive more efficiency

If you’d like to submit a question….

Please type your question into the Questions pane and click the send button

Additional Information

  • December 3-7

    • December 3 – Global Deployment Sponsored by:

    • December 4 – Global Mindset

    • December 5 – Global Payroll Sponsored by:

    • December 6 – Global Compliance

    • December 7 – Global Analytics



Upcoming Webinars

Wednesday, November 14, 2012 Highlights from the 15h Annual CedarCrestone HR Systems SurveyPresented by: Alexia (Lexy) Martin, Vice President, Research & Analytics, CedarCrestoneThis is an IHRIM Members Only Webinar.

Sponsored by:

Credit Hours

This program, #10086, has been approved for 1 recertification credit hour toward IHRIM’s Human Resource Information Professional Certification Program. Please visit for additional information.

This program, ORG-PROGRAM-128690 has been approved for 1.0 (Specified – Business Management and Strategy) recertification credit hour toward PHR, SPHR and GPHR recertification through the Human Resource Certification Institute (HRCI). Please be sure to note the program ID number on your recertification application form. For more information about certification or recertification, please visit the HRCI homepage at

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