In today’s digital environment, the right mix of technology is
essential for HR to align with business needs
According to Mercer’s 2017 HR Transformation Study – How HR
Needs to Change, just more than one-third (35%) of organizations
worldwide employ an HR service delivery model that includes the
three components of Centers of Expertise (COEs), HR Business
Partners (HRBPs), and HR Shared Services (HRSS). The successful
operation of all three components is an attribute of
high-performing HR functions. Moreover, few (17%) plan to change
from their existing model.
In a rapidly changing workplace, the HR function’s slow
transformation does not align with the C-suite’s plans for more
change and support. Mercer’s 2017 Global Talent Trends research
finds that the majority (93%) of executives are planning an
organization redesign in the next two years with 41% expecting to
move support functions to shared services.
“Organizations are making changes in the interest of greater
efficiency and increased agility, which requires a combination of
technologies,” said Karen Piercy, Partner in Mercer’s HR
Transformation business. “Those that have been expanding shared
services and business partnering skills have had the best success
aligning HR to business needs.”
Mercer’s HR Transformation research shows organizations with HR
functions that continuously evolve their HR service delivery model,
build capabilities among their HR team, and invest in technology
perform significantly better than those that do not. See Figure
1.
Evolve the model, build capability
Mercer’s study finds that more than two-thirds (68%) of
high-performing HR functions have redesigned their HR structure
within the last five years. As a result, many are utilizing a
framework in which HR administration and decisions are made in a
centralized manner, and processes and practices are consistent
across the multiple locations.
As service delivery models evolve, organizations with
high-performing HR functions are aligning COE and HR practices with
the overall business strategy, shifting transactions to shared
services, and providing more learning and rotational career
development opportunities for their HR team. By building alignment
to key business performance initiatives, HR professionals are
well-positioned for value-added roles. According to Mercer’s study,
more than two-thirds (69%) of CHROs/executive HR leaders meet with
the CEO or COO to discuss business and HR strategy at least twice a
month to ensure that strategic alignment.
“These meetings are important to strengthen the partnership
between these leaders and help ensure that HR is aligned tightly
with business strategies,” said Denise LaForte, North American
Leader of Mercer’s HR Transformation practice. “When business
leaders see HR programs aligned to the business strategy, they
understand the value and importance of those programs, which is
particularly significant since less than half of CEOs recognize HR
for its capability and competence.”
Invest in technology
Investing in human capital management technologies that provide
workforce analytics to drive strategic decision-making and deliver
a consumer-based HR experience for both managers and employees
should be a top priority on HR’s agenda, especially since only
one-third (35%) of CEOs believe their HR function provides a
digital experience for employees. Mercer’s study finds that
organizations with high-performing HR functions have embraced
technology and have realized significant results assessing and
applying analytics. Specifically, they achieved better business
outcomes, such as delivering exceptional customer value (94%),
reacting proactively to disruptive change (83%), and driving
innovation (89%). Additionally, they are viewed as great places to
work (86%) and attract the talent needed to excel (91%).
Despite organizations with high-performing HR functions using
technology much more than others, it is still limited. While 69%
have employee self-service in place, just 36% have manager
self-service and only 27% have mobile talent applications.
“Clearly, there is significant opportunity for the HR function
to grow its digital presence,” said Ms. Piercy. “As HR functions
adopt technology and advance their skills in data analytics, they
are strengthening strategic decision-making, enhancing partnerships
with business leaders and other functions, and providing a more
digital and consumer-oriented manager and employee experience.”
For more information and to download the Executive Brief and
replay to Mercer’s webcast, visit
https://www.mercer.com/our-thinking/why-hr-needs-to-change.html.
About Mercer
Mercer is a global consulting leader in talent, health,
retirement and investments. Mercer helps clients around the world
advance the health, wealth and careers of their most vital asset –
their people. Mercer’s more than 20,000 employees are based in 43
countries and the firm operates in over 140 countries. Mercer is a
wholly owned subsidiary of Marsh & McLennan Companies (NYSE:
MMC), a global professional services firm offering clients advice
and solutions in the areas of risk, strategy and people. With
annual revenue of $13 billion and 60,000 colleagues worldwide,
Marsh & McLennan Companies is also the parent company of Marsh,
a leader in insurance broking and risk management; Guy Carpenter, a
leader in providing risk and reinsurance intermediary services; and
Oliver Wyman, a leader in management consulting. For more
information, visit www.mercer.com. Follow Mercer on Twitter
@Mercer.
Figure 1: Business practices of high-performing HR
functions
EVOLVE THE MODEL BUILD CAPABILITY
INVEST IN TECHNOLOGY
Use a centralized structure
Deploy the prevailing model with all three
elements (COE, HRBPs, HRSS)
Build model maturity
Align COE and HR practices with business
strategy
Shift transactions to HR Shared
Services
Evolve the role of the HRBP
Invest in the right mix of HCM
technology
Invest in analytics to drive decision
making
Provide a digital employee and manager
experience
Source: Mercer’s 2017 HR Transformation Study – How HR Needs to
Change
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170531005943/en/
MercerStacy Bronstein,
215-982-8025Stacy.Bronstein@mercer.com
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