Four questions to ask before re-tooling HR

Job candidates sought by human resources today often need to be technologically savvy, prepared to make a strategic – and global – impact.

The same can be said now of HR functions themselves, according to a new report by Towers Watson.

More than one-third (36%) of 1,025 organisations from 32 countries surveyed by the global professional services firm said they are considering changes to their HR structures in the next 18 months. The impetus for change is the development of new delivery models that can improve efficiency, service to employees, and performance, according to the report.

Opportunities exist for HR departments, according to the report, in four key areas:

• HR structure. New opportunities have arisen for HR to make strategic contributions to the business and leverage resources for more efficiency and cost containment.
• Technology. Companies are investing in technology that delivers near-term innovations and improves service delivery.
• Process changes. Business processes can be redesigned to generate higher performance and to better leverage new technology.
• Manager self-service (MSS). Organisation managers can be HR’s allies in delivering and improving HR processes and expanding a company’s offerings globally. Giving managers the tools they need to support employee engagement is seen as a key.

Nearly three-fourths (74%) of the organisations that are planning HR changes by the end of 2014 expect to experience operational efficiencies as a result. Other results sought from HR changes by organisations planning them include quality improvements (53%) and cost savings (37%).

Just under half (49%) of the companies that plan to change are moving toward a shared services environment.

As HR departments prepare for this period of change, the report offers questions to be asked for successful review and re-engineering of HR processes:

• Does it make sense from a functional and geographic standpoint?
• Is the work performed by the most capable person at the right level?
• What efficiencies can be achieved by centralising certain tasks and decisions?
• What latitude should be given to local HR and managers?

One action HR can take to improve efficiency is to change approval structures that create needless obstacles, the report says.

Modifying structure, rethinking processes, capitalising on technology, and using shared services and MSS all can lead to improvement, the report says, as organisations prepare for a period of change.

—Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine senior editor.