Dive Brief:
- Human Resources organizations continue to move their management systems to the cloud as they seek improved user experience and stronger alignment with the business, according to a new survey from Information Services Group (ISG), which provides technology insights, market intelligence and advisory services.
- ISG's second annual survey, Industry Trends in Human Resources Technology and Service Delivery, found that more than 70% of respondents say they already have implemented or will move to an HR Software-as-a-Service (SaaS) platform in the next two years. Mid-sized companies (those with fewer than 10,000 employees) appear to be adopting SaaS models more readily than larger enterprises, with 34% indicating they primarily use a SaaS-based model, compared with only 17% of larger firms.
- Most larger firms, the survey found, are more likely to deploy a hybrid model that uses both SaaS and legacy on-premises Human Resource Management Systems (HRMS). Such hybrid approaches are typical when enterprises are reluctant to abandon their already significant investments in HRMS.
Dive Insight:
The most prevalent reasons for moving to HR SaaS platforms, the survey found, are access to continuous innovation and best practices, improved integration of data and applications, and the desire to deliver an improved user experience similar to what employees expect as consumers.
"When it comes to HR technology and service delivery, HR organizations are shifting their focus from cost savings to strategic business alignment, process improvement and employee engagement," said Debora Card, partner, ISG Human Resources Technology and Delivery Strategies. "We're seeing initial signs that enterprise-level HR decision making is becoming increasingly data-driven, and we therefore expect HR analytics will continue to grow in importance."
Card cautioned that companies must avoid the allure of "shiny, new HR technology for technology's sake alone." She advises employers to create a comprehensive HR technology and service delivery strategy as a first step on the path to adopting SaaS. The strategy must include a strong business case and a roadmap for change, including phasing of both new technology deployment and delivery model optimization.
"New technology alone will not bring the kind of transformation many HR organizations are seeking," she said. "The real benefits of these systems are realized only by enterprises that carefully redesign processes to work smarter with new technology, rethink HR roles and skill sets, evaluate service delivery models and plan for the impact these changes will have on those who use HR information – employees, management and the HR organization itself."
