World-class HR departments do more but spend less, thanks to technology
- World-class HR organizations spend 25% less than average HR organizations and function with 30% less staff, but are more effective, according to a report from The Hackett Group. The consulting firm's benchmark analysis also found that, should an average company with $10 billion in revenue gain world-class HR status, it could save up to $15 million a year. The Hackett Group defines world-class HR operations as those which maintain a level of performance in the top quartile in effectiveness and efficiency.
- The analysis also showed that world-class HR operations spend more of their budgets on cloud-based technology and selective outsourcing compared to other HR staffs. Top-ranked departments have also reduced the amount of staff performing transactional tasks with error rates for those tasks two to fives times lower that of traditional HR operations.
- The Hackett Group’s research also found that, through digital technology, HR organizations can improve their efficiency and effectiveness in delivering services, boost customer experience, place additional resources on high-value activities and use sophisticated analytics for better decision-making.
Technology has had a bigger impact on HR than perhaps than any other employment factor. HR leaders and managers will increasingly have the option of turning over transactional or clerical tasks to automation so they can focus on more strategic efforts involving the people side of the profession. Increasingly, HR is turning to automation and emerging artificial intelligence (AI) to build essential people management traits such as trust and engagement within their systems.
Data analytics — and people analytics in particular — have become indispensable tools in recruitment, skills and knowledge assessments, and hiring. Industry thought leader Josh Bersin of Deloitte predicted in his book Everything Is Becoming Digital that people analytics would move from being a niche in HR to a major business function.
In essence: Technology is swinging the other way on the pendulum, and is now more capable of returning the human factor to employment processes.
- The Hackett Group Inc. Raising the World-Class Bar in HR Through Digital Transformation
- The Hackett Group Inc. The Journey to World Class Starts Here
- HR Dive How to create a more effective talent analytics strategy with proven data