Nottingham, 11th April 2013 – New research reveals that UK organisations are leaning heavily on technology to help cope with the ever-increasing challenges of complying with complex HR and payroll legislation, such as RTI and pensions reform. This is despite nearly two-thirds (62%) of HR and payroll departments relying on out-of-date systems – over five years old – and lacking essential tools to help handle other important applications such as performance management and people development.
HR Technology 2013: How mid to large sized UK organisations are using HR technology , surveyed the opinions of over 200 senior HR and payroll directors, managers and decision-makers from UK organisations with over 500 employees. The research, commissioned byMidlandHR, a leading specialist supplier of talent management, workforce planning, HR and payroll solutions and services, examined the views of private and public sector organisations, 52% and 48% respectively.
When asked to rate the advantages of HR and payroll ‘best-of-breed’ and ERP solutions, the primary reasons for selecting either solution are the same, with the overwhelming driver being an ability to meet legislative requirements. Ease of use, increased productivity and efficiency, and being able to support strategic HR were also highlighted as significant advantages.
However, when asked if the HR department had a fair share of voice in the selection process of the system, it was clear that in those organisations which had opted for an ERP solution, the HR department felt that it had not been consulted sufficiently, with only 55% feeling they had the right level of involvement. This contrasts with specialist solution users where more than three quarters (81%) said they had been listened to.
When asked what their current system provided, in addition to HR and payroll, the results were interesting. Less than half (only 45%) said their current solution provided them with recruitment functionality and only 44% had employee and/or manager self-service functionality. Only 4 in 10 used their systems for people development (41%) and learning management (40%). Even fewer (39%) used their current systems for either workforce planning or performance management.
Commenting on the findings, MidlandHR’s managing director, Declan McGrath, said: “We were extremely surprised that more HR departments are not using technology for purposes such as performance management and people development which, by optimising workforce performance through employee engagement, retention and an enhanced skills base, can provide real efficiency savings. The fact that the majority of organisations’ HR and payroll solutions were more than five years old (62%) suggests that some respondents are dependent on out-of-date HR technology which doesn’t include such capabilities. We also suspect that many of them aren’t making use of – or are even aware of – what their existing technology can do for them.”
“Organisations need to consider adopting a wider range of technology instead of just the basic HR and payroll administration. Manager and employee self-service, for example, have been proven to provide considerable process efficiency gains. This leaves HR personnel free to focus on more strategic human resources activities which have more impact on workforce optimisation. Perhaps it is time that organisations re-examine their technology requirements and whether they are being met by their current providers. ”
The top five cost saving/efficiency improvements which organisations were expecting to realise from their current HR systems were: improved accuracy (72%), reduced duplication (70%), consistency of process (68%), improved customer satisfaction (60%) and fewer customer complaints (57%).
Only 18% had undertaken, or were planning to undertake, an HR ROI (return on investment) assessment on their current solutions. So it might not be surprising that a staggering 49% didn’t know if their HR system had achieved the level of ROI that was originally expected of it.
Just 15% said that ROI was achieved within the expected timescales and another 4% said it was achieved but took longer than expected. However, nearly 1 in 10 (8%) said that ROI had not been achieved and was not expected.
McGrath comments: “It’s incredibly disappointing that ROI assessments are not routinely being carried out. Technology providers should be willing to work with organisations to quantify the financial benefits and cost savings achieved.”
Whilst the majority of those questioned said they were not planning to change solutions, the overwhelming reason for those that intended to move was their current solution’s lack of functionality (29% HR and 38% payroll). Those that weren’t happy but were going to stay with their current provider cited the high cost of changing supplier (44% HR/52% payroll) and the amount of money already invested in the system (54% HR/61% payroll).
McGrath continues: “Lack of functionality in some HR and payroll solutions is clearly a problem for many organisations. However, it seems a certain amount of fear and inertia is playing a part in preventing companies from changing solutions. Many feel they have already invested too much money in their current systems to do so. But they are ignoring the cost benefits and long-term business gains which could be realised by investing in the right solution to meet their needs.”
To download a copy of the report, HR Technology 2013: How mid to large sized UK organisations are using HR technology, please click here.
MidlandHR is a leading supplier of talent management, workforce planning, HR and payroll solutions and services. With a wealth of industry experience, MidlandHR's solutions support some of the largest and most successful organisations in the UK, from both public and private sectors.
Whether organisations require an on-premise solution, HR and payroll outsourcing services or cloud-based SaaS, MidlandHR’s strengths lie in its cutting edge iTrent technology and a commitment to providing the highest quality service to meet the needs of every customer. For more information about MidlandHR’s commitment to outsourcing excellence, as recognised through the CIPP Service Provider of the Year Award 2012 for the second consecutive year, watch this video.
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Claudia Kellermann / Louisa Constable
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