Asia Pacific Companies to See Big Change in HR Function as They Seek Operational Efficiencies

About a third of Asia Pacific-based national and multinational companies anticipate significant changes in their human resources departments in the next couple of years, as they seek greater efficiencies and to improve the processes within the function, according to an annual survey by global professional services company Towers Watson.


The survey revealed that companies are considering new HR technologies, will continue to invest in HR technology such as mobile applications, and plan to review their HR processes. However, at the same, time 49% of Asia Pacific companies currently lack a formal written HR strategy to lay out the role of the function within the business.


The 2013 HR Service Delivery and Technology Survey, a global survey of 1,025 companies, including 578 based in Asia Pacific, found that a third of respondents (33%) will make a change to their HR structure before the end of next year.


Among companies changing their HR structure, nearly three-quarters (73%) are doing so to realise further operational efficiencies, while just over half (52%) are doing so to improve quality. Another 38% are pursuing a change in business strategy or seeking to achieve cost savings (24%).


For the Asia-Pacific region, the survey shows that HR technology spending remains steady and strong despite cost reductions in other areas of HR.


More than half of organisations (53%) indicated their investment in HR technology this year will match last year’s investment levels, while more than a quarter (27%) will either increase or significantly increase their HR technology investments.


Almost a third (31%) of the Asia-Pacific companies surveyed plan to implement or are in the process of implementing a new HR management system. SAP (Legacy HRMS 20%, Success Factors 4%) and Oracle (PeopleSoft 15%, Legacy HRMS 6%, Fusion 2%) are the main suppliers, followed by Workday (6%), all of which account for 53% of the new HR management systems chosen. Global capabilities and costs are the key selection criteria. For SAP, lower upfront costs were cited by respondents, while it was predictable ongoing costs in particular that attracted Oracle users.


HR is also catching on to the mobile technology trend. Nearly half (46%) of respondents now provide mobile access via smartphone to employees, with iPhone (60%), Blackberry (35%) and Android phone (32%) being the devices supported.


Some 17% of companies provide tablet devices, with the iPad (51%) and the Android tablet (19%) the preferred devices. A number of the companies surveyed (12%) operate a “bring your own device” policy.


But HR-enabled applications are in their infancy: just over one in 10 organisations (13%) in Asia Pacific currently use mobile applications for HR purposes. This trend is expected to accelerate, albeit at a moderate pace, as 13% of companies plan to offer HR-enabled applications in the next 12 to 18 months. However, more than half of organisations have no plans to leverage mobile applications before the end of 2014.


While only 51% of companies in Asia Pacific have a defined HR strategy in place, a further 31% of companies plan to implement such strategies within the next 18 months. In terms of HR strategy focus, the standout key areas among those surveyed in Asia Pacific are training and development (67%), identification of high potential individuals (63%), performance management (60%), succession management (58%), employee management (54%), and recruitment and selection (53%).


“We’re seeing elsewhere in the world that companies are carefully examining both their HR structures and the way HR services are being delivered, and Asia is no different: there’s a need to review, refine and enhance for the function,” says Robert Zampetti, director of Towers Watson’s Asia Pacific HR Service Delivery practice. “What is really interesting is the continued trend toward replacing core HR systems, and a willingness to invest in new technology and partners with a growing shift toward software-as-a-service.”


“Without question, HR service delivery is in a state of change. This means they can change the game by modifying their structure, rethinking long-held processes, adopting new HR technologies and processes, and extending capabilities to the organisation via manager self-service and shared services. In the end, it means using new concepts, approaches and technology to provide better HR services,” says Zampetti.


The survey also found that greater involvement in strategic business-driven issues was ranked as the primary HR service delivery issue this year (35%), followed by streamlining business processes (33%).


Nearly half of the organisations in Asia Pacific surveyed (45%) offer an HR portal to HR and employees, while 7% have an HR portal available to HR only. Another 18% are working to develop a portal.

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