The survey conducted by Deloitte Consulting indicated that revamping HR is still mostly about savings, systems, and processes, despite rising demands for the HR department to meet the challenges of an increasingly competitive business environment.
One strategy that companies azre still using to improve their HR functions is outsourcing administrative activities while retaining HR's strategic capabilities in-house. Approximately 40 percent of surveyed companies that are transforming HR have outsourced some routine activities such as compensation and benefits (94 percent), HR administration inquiry (94 percent), shared service center operations (88 percent), HR information system (88 percent), and payroll (85 percent).
Other companies are now looking to outsource more strategic HR activities, such as training and development (42 percent), recruiting and staffing (36 percent), compliance (36 percent), talent management (27 percent), and global mobility (21 percent).
"HR needs to focus more on supporting business objectives - revenue growth and talent," says Robin Lissak, Deloitte Consulting principal and director of the survey. "For instance, new market entry is an important growth strategy for many companies and is often a risky proposition because talent can't be sourced, retained, or trained in the company's culture. It is clear to us that a long-term focus can have a bigger positive impact on corporate results."
The primary motivations behind HR improvements continue to be cost savings or efficiency (85 percent) and effectiveness of service (75 percent). Only one-third of respondents cite building HR capability as a driver for the overhaul and even fewer (30 percent) responded that they were making improvements to free HR to undertake a more strategic role.
Some organizations are moving toward business-HR alignment and are identifying key business issues that are driving future HR improvements - training the next generation of leaders (40 percent), building and managing a global workforce (33 percent), mergers and acquisitions (31 percent), and an aging workforce (27 percent). However, only 40 percent of respondents have structured processes for future HR planning. This is clearly an area that needs improvement because HR will likely find it difficult to support business strategy without a formal mechanism to solidify this alignment.