Report Reveals How The Best HR Functions Function

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They say that you only get what you pay for, in businesses and in life, but a recent report showed that the best HR functions actually spend less than their peers on HR.

The report by Hackett Group, Forging a Digital Path to World-Class HR, was the bench marking endeavour conducted as a look into the HR functions of companies across the world. Notably, it found that world-class organisations spend 28% on labour and 29% less on outsourcing per employee than most companies, opting to use outsourcing services, like a payroll outsourcing service, selectively.

The analysis noted that the ‘world-class’ HR organisations, the ones that hit top quartile numbers for efficiency and effectiveness based on the report’s benchmark, opted to use cloud-based technology, both for HR and their payroll outsourcing service, for more effective operations; designing their services around customer experience, and focusing their resources on high value activities.

These functions, the report added, also build and utilized sophisticated analytics capabilities, which they then used to provide useful tools and insights to their business leaders.

Another noteworthy thing that the report mentioned is that the majority of the projects these ‘world-class’ organisations finished were ‘oriented towards transaction processing’, things like payroll, workforce management and reward, that sort of thing.

Mac Caldwell, Hackett Group leader of People and HR Transformation Practice, says that world-class HR organizations are now moving past exploration, and are now adopting the latest in technology and analytical tools in order to be smarter and more customer-focused with minimal components.

He says that it’s the next chapter in turning HR from just another part of the company, to a key partner for the business. This change, he adds, will require new skills in areas like smart automation, and user-driven design, which means that HR leaders need to be willing to adapt. In return, however, they’ll have a great opportunity to change the HR function for the years to come.

The main takeaway from this is that HR and payrolls, as well as functions like a payroll outsourcing service or the like are being looked at differently now; they’re not just another part of the company, it’s considered a key aspect; something that can make or break the company. Given what’s been proven in the past, it’s about time.

RichardADavis