World-Class HR Orgs Spend 23 Percent Less,
Operate with 32 Percent Fewer Staff; Research Details Five
Imperatives for Creating Greater HR Agility in a Digital
Age
World-class HR organizations embrace digital transformation and
advanced analytics as key levers to drive improved results,
including spending 23 percent less per employee than typical
companies, operating with 32 percent fewer staff and demonstrating
improved effectiveness, according to new research from The Hackett
Group, Inc. (NASDAQ: HCKT). For a typical company with $10 billion
in revenue, attaining world-class performance represents as much as
$14 million in savings annually.
The research also identified five imperatives used by
world-class HR organizations to achieve superior results: embrace
digital transformation; leverage analytics-based decision making;
reallocating resources from transactional focus to value adding;
adopt customer-centric service design and delivery; and reskill the
HR function. A complimentary version of the research is available
with registration at this link: http://bit.ly/29jVeqP
HR is being asked to respond to a challenging business
environment, with increasing competitive pressures, rising business
risks and disruptive change from new digital technologies. At the
same time, they face declining budgets and flat to decreasing head
counts, making it more challenging to transform their service
delivery model and respond with agility to shifting demands and
opportunities.
In addition to spending less and operating with fewer staff, The
Hackett Group’s research found that world-class HR organizations
allocate their spend very differently than typical companies,
spending 18 percent more on technology and nearly 40 percent less
on labor.
“Many world-class HR organizations are investing in the new wave
of cloud-based HR applications and services ranging from core human
capital management to background checks, benefits administration
and talent analytics and reporting,” said The Hackett Group’s
Principal in Charge, Global HR Advisory Services Harry Osle. “This
use of technology is key to how they are improving overall agility
and achieving greater efficiency and effectiveness.”
The research quantifies some of the ways in which world-class HR
organizations are more effective. For example, they see transaction
error rates for various processes that are two to five times lower
than those at typical companies. Fewer errors means higher quality
process execution, and also has a bottom-line impact, as the cost
to correct errors can be significant.
World-class HR organizations are also more effective at
generating outcomes that impact on business performance. For
example, they are much better at developing and moving people into
new roles, with a majority of manager and a near majority of
professional roles filled with internal candidates. Furthermore,
turnover rates for first and second year hires are also better for
world-class HR, enabling them to retain more organizational
knowledge.
World-class HR organizations are those that achieve top-quartile
performance in both efficiency and effectiveness across an array of
weighted metrics in The Hackett Group’s comprehensive HR
benchmark.
For each of the five imperatives of world-class HR
transformation, the research detailed the gap between world-class
HR organizations and typical companies, and steps that companies
can use to enable the change, as follows:
Embrace Digital Transformation - Cloud-based
infrastructure and applications, virtual business and technology
networks and business analytics are coming together with rapidly
transitioning employee and consumer bases, which are increasingly
adept to new mobile technologies and business models. This
convergence is creating tremendous new opportunities for HR
organizations that can apply digital technologies to transform
service delivery. Increasingly, this becomes the platform for
delivering a whole new class of services, such as information and
analytics to guide decisions. World-class HR organizations spend
more on technology in part to drive levels of process automation
that are two to four times greater than typical companies in key HR
areas. This enables them to devote more time to talent management
and other higher-value work.
The Hackett Group’s research reveals significant penetration of
cloud-based services in HR organizations, with many planning
greater adoption levels in the next 12-24 months. Talent
acquisition and learning management applications have the highest
adoption rates. Other notable areas of cloud-based applications
adoption include onboarding, collaboration and social
networking.
Leverage Analytics-Based Decision Making – Agile
operations require a “sensory” system that monitors external
conditions and analytical capabilities to put this data in a
business context. World-class HR organizations build a
sophisticated information/data architecture to enable capabilities
that include: advanced data analysis; dynamic and
information-driven planning and analysis; and performance
measurement that is aligned with the business.
These capabilities enable HR to provide critical talent-related
insights that drive better human capital decisions and outcomes.
For example, HR organizations can analyze which skills and
competencies actually drive high performance. To enable planning,
they can look at what skills will be in demand in the future. To
drive retention, they can examine which staff are at highest risk
of leaving the organization. To improve recruiting, they can
analyze information including the sources of quality hires. And to
enhance leadership, they can look at what assignments and learning
experiences are most beneficial to developing successful
leaders.
Reallocate Resources from Transactional Focus to Value
Adding – World-class HR organizations are over 5 times more
likely than their peers to use a formal HR service delivery model,
a basic step to improving efficiency and effectiveness which is
critical if HR is to self-fund transformation efforts. In most
cases this service delivery model includes global business
services/shared services, centers of excellence and HR business
partners.
Adopt Customer-Centric Service Design and Delivery –
World-class HR organizations put the customers’ needs at the focal
point of all key activities and functions. The way each service
needs to support customers’ work influences the design of the
delivery method or interface. The result is a far better customer
experience using HR services. One good example of this is
self-service. World-class HR organizations have significantly
higher usage of both employee and manager self-service because they
create capabilities with the customer experience in mind.
At one global consumer products company, the HR Global Business
Services (GBS) organization has used service design concepts to
create and introduce high-quality, customer-centric services to
employees. The recruiting and candidate onboarding processes have
been redesigned to be relevant, easy-to-use and accessible through
digital channels. Emphasizing graphics and videos, the system
design makes information easy to locate and digest and is optimized
for viewing from either the user’s desktop or a mobile device.
Re-skill the HR Function – World-class HR are more
effective at deploying people and skills with greater relevance to
the core activities of the business. They bring advanced
organizational skills to the table, with 20 percent more staff
focused on leading business change. Additionally, they partner to a
higher extent with business lines to enable organizational
performance. World-class HR organizations also have a very
different makeup and skill mix than their peers, with a far greater
number of professionals and fewer managers. This indicates a staff
with the ability to do more high-value work.
“Getting to world-class is a real challenge for even the most
agile HR organizations. But the benefits are tangible,” said The
Hackett Group’s Global Principal in Charge, People & HR
Transformation Practice Scott Leuchter. “To jump start their
journey, HR leaders can take steps like measuring baseline
efficiency and effectiveness levels to gauge performance and test
their service delivery model. They can evaluate and document the
customer value they create, and find ways to reduce complexity.
Technology is a key component, and they can look at their existing
technology architecture and consider digital business
transformation to improve how their systems enable efficient
administration, transactional processing and ease of use. And
finally they can adopt a service delivery model that enhances HR’s
alignment with business objectives.”
The Hackett Group’s World-Class HR Performance Advantage
Research is based on an analysis of results from recent benchmarks,
performance studies, and advisory and transformation engagements at
hundreds of large global companies.
About The Hackett Group
The Hackett Group (NASDAQ: HCKT) is an intellectual
property-based strategic consultancy and leading
enterprise benchmarking and best practices implementation
firm to global companies. Services include business
transformation, enterprise performance
management, working capital management, and global
business services. The Hackett Group also provides dedicated
expertise in business strategy, operations, finance, human capital
management, strategic sourcing, procurement, and information
technology, including its award-winning Oracle EPM and SAP
practices.
The Hackett Group has completed more than 11,000 benchmarking
studies with major corporations and government agencies, including
93% of the Dow Jones Industrials, 86% of the Fortune 100, 87% of
the DAX 30 and 52% of the FTSE 100. These studies drive its Best
Practice Intelligence Center™ which includes the firm's
benchmarking metrics, best practices repository, and best practice
configuration guides and process flows, which enable The Hackett
Group’s clients and partners to achieve world-class
performance.
More information on The Hackett Group is available at:
www.thehackettgroup.com, info@thehackettgroup.com, or by calling
(770) 225-3600.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161013005846/en/
The Hackett GroupGary Baker, 917-796-2391Global Communications
Directorgbaker@thehackettgroup.com
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Feb 2024 to Mar 2024
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Mar 2023 to Mar 2024