HRIS: Trends & Products
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1 IS: Trends & Products National Conference of State Legislatures Randy J Di Bernardo, Principal November 2015
2 Today s Agenda Pressures facing Human Resources () Today The Evolution of Emerging Trends in Technology Trends Global Transformation Survey (Highlights) So, where do we go from here? 1
3 Pressures facing Today
4 Localization Globalization Technical Capabilities BigData Analytics Retention and Engagement War for Talent Millenials The Overwhelmed employee Waning Capabilities of The world has gotten complicated Employment Brand Social Everything Leadership Pipeline as Decision Science Global Payroll Global Recruitment Social Recruiting MOOCs Disruption of the CO Workforce Planning Cloud Systems 400 LMS and TM vendors Social Everything 3
5 What Leaders are saying We are shifting our business to a services business. How do I transform the workforce? How do we create more collaboration and knowledge sharing across the company? How do we increase women and diversity in leadership? We need to restructure to build common systems and reduce costs. How do we more rapidly move talent from early leadership to senior leadership? How can I retain and engage my top talent? Our training organization is too expensive and not driving enough value. Our mid-level and entry leadership gaps are still huge The skills of our business partners and specialists need improvement. Our performance and comp process is obsolete and not engaging people. We need to accelerate hiring of senior and mid leadership in Asia and Middle east. We are still having trouble attracting millenials and younger workers. How do we drive greater innovation into the organization? How do we optimize our global mobility program? Our company has capability gaps in new technology areas across the organization. How can we globalize our employment brand and talent programs?? We compete for engineers with some of the most successful silicon valley companies? How can I attract and retain the brightest in our company? We need better data and analytics in. 4
6 The Evolving Role of
7 The Evolution of since the 90s 1st Generation Focused on establishing and improving new service delivery models with strong emphasis on rationalizing infrastructure to deliver transactional services utilizing core systems (e.g., ERP), standardized processes, and consistent organizational designs. ERP Systems 2 nd Generation Builds on 1 st Generation foundation by improving the efficiency of service delivery, focusing on the effectiveness of strategic services that support the business, and measuring business performance targets. 1990s 2000s 2010s Shared Services Outsourcing The Evolution of Transformation Ulrich Model Process Standardization MSS ESS Workforce Analytics? Standardization Optimization Business Focus 6 6
8 Emerging Market Trends
9 Emerging Trends Today s workforce demands a whole new set of leadership, talent, recruiting, and engagement strategies and organizations are struggling to keep pace Leadership continues to be the biggest challenge companies face around the world The 21st Century Workforce is different and engagement and retention are now top issues on the minds of CEOs and COs is falling behind in structure, skills, analytics, technology, and the development of world-class recruiting and L&D programs Technology, analytics, and the overwhelmed employee are acute focus areas for Skills gaps, the rapid obsolescence of skills, the need for nextgeneration learning, and talent mobility will differentiate companies Study by Bersin by Deloitte,
10 Trends we see in the marketplace What we see in the marketplace: Business leaders view delivery of services in an efficient, effective and compliant manner as table stakes Operational efficiency is fundamental to a more effective function and no longer the primary focus of Transformation. With so many companies having already accomplished big improvements. The real value today involves leveraging those operational improvements to support the broader business strategy. Many companies are shifting to globally integrated service delivery models Leading organizations are creating increased capacity for strategic and consultative activities by streamlining operational activities first Evolution of Outsourcing Technology Benchmarks & Leading Practices Business Driven Case for Change Global Transformation Trends Talent Operations, Process and Technology Next Generation Service Delivery in the Cloud 9
11 Business Driven Case for Change What we see in the marketplace: Business leaders understand the value of people and expect to play a more central role in executing the business strategy The business is willing to invest in services that it sees as valuable (e.g. new market entry, business transformation, and M&A/divestitures) Leading organizations are using quantifiable measurements to reflect s contribution to business outcomes Most organizations focus too much attention on operational excellence and not enough on creating business value. Both are essential for making the case for change in today s market Evolution of Outsourcing Technology Business Driven Case for Change Global Transformation Trends Next Generation Service Delivery in the Cloud Benchmarkin g & Leading Practices Talent Operations, Process and Technology 10
12 Next Generation of Service Delivery What we see in the marketplace: Increased usage and breadth of self service beyond simple transactions which impacts the service delivery model Larger focus on defining and implementing shared services for transactional activities and redefining the role of the Business Partner and Centers of Expertise Technology Business Driven Case for Change Next Generation Service Delivery Moving to a more effective service delivery model requires significant behavioral change and capabilities. Strategic activities require different skills. For example, Business Partners must have broad knowledge and consultative skills and are not required to perform traditional administrative activities. Evolution of Outsourcing Global Transformation Trends in the Cloud Leading organizations are developing a roadmap for transformation, including the priorities, business cases and the future solution Benchmarkin g & Leading Practices Talent Operations, Process and Technology 11
13 in the Cloud What we see in the marketplace: Emergence of Software as a Service (SaaS) technology for and point solutions Increasing number of customers are leveraging SaaS as a key Transformation enabler as a result of faster implementation, lower total cost of ownership, intuitive usability and an accelerated time to value Technology Business Driven Case for Change Next Generation Service Delivery Changing need of the Portal to integrate SaaS and other technology/sourcing solutions Evolution of Outsourcing Global Transformation Trends in the Cloud Benchmarkin g & Leading Practices Talent Operations, Process and Technology 12
14 Talent Operations, Process and Technology What we see in the marketplace: The ability to improve talent management more than cost or efficiency is driving an increasing number of decisions around talent process and technology Business Driven Case for Change and Talent strategies vary based on geography Talent management is one of the key drivers for the business to fund technology initiatives Technology Next Generation Service Delivery Increased competition in talent technology: growth and proliferation of point solutions at same time systems are upgrading their capabilities Some organizations are failing to realize the full value of their investments by trying to implement Talent strategy solely through technology without addressing Talent operations and process Evolution of Outsourcing Benchmarkin g & Leading Practices Global Transformation Trends Talent Operations, Process and Technology in the Cloud 13
15 Benchmarking & Leading Practices What we see in the marketplace: Consistent requests for benchmarking data and leading business practices to understand where organizations fall within their peer groups Leadership values benchmarking data as important inputs into the business case for Transformation Technology Business Driven Case for Change Next Generation Service Delivery Need to go deeper into benchmarking than the traditional metrics and FTE ratio s Business Partners and Shared Services require specific data that cannot be found in the typical benchmark data set Evolution of Outsourcing Global Transformation Trends in the Cloud Leading organizations are using benchmark data and leading practices as a comparative guide to determine what makes sense for their organization and cultural identity Benchmarkin g & Leading Practices Talent Operations, Process and Technology 14
16 Evolution of Outsourcing What we see in the marketplace: There is no longer a one-size-fits-all solution for the Outsourcing space Buyers are taking control of the evolving outsourcing (O) provider landscape with custom-designed solutions that take advantage of different vendor and technology options Technology Business Driven Case for Change Next Generation Service Delivery Total Outsourcing (BPO) providers have struggled to deliver global solutions consistently causing some clients to take services back in house There is a greater need for the integration of O solutions both across providers and within the Service Delivery Model Evolution of Outsourcing Global Transformation Trends in the Cloud Benchmarks & Leading Practices Talent Operations, Process and Technology 15
17 Technology What we see in the marketplace: Focus on driving out operational costs via an integrated service delivery, process improvement and HCM technology strategy Accessing personal and workplace information 24/7 via self service applications is improving operational efficiency and is now expected practice The integration of applications with wireless and mobile technology is evolving at a rapid pace Technology Business Driven Case for Change Next Generation Service Delivery U.S. based companies are trending towards a global consolidation of Core technology to a single provider (supporting analytics and lower total cost of ownership (TCO)) Evolution of Outsourcing Global Transformation Trends in the Cloud The technology landscape has matured into fully integrated systems that link recruiting, learning, talent management, and compensation systems EMEA based companies continue to trend towards a best of breed of approach Benchmarkin g & Leading Practices Talent Operations, Process and Technology Social media and mobile devices are raising the bar on Service Delivery 16
18 The Top-7 Technology Trends we see in the marketplace: Tech Tech Trend Innovative Application User Interface Overview software applications are moving from capturing transactional data to a higher quality, intuitive user experience (i.e., no training required) Leveraging Wireless and Mobile Technology The integration of applications with Wireless and Mobile technology is evolving at a rapid pace smartphones, tablets allowing portable access to info and transactions Embracing Social Media Use of Social Media (Web 2.0 Tools) has exploded in popularity and considered mainstream today. Facebook and Linkedin are common sources of business exchange. Enhanced Flexibility in Applications ERP systems such as SAP, PeopleSoft and Oracle have seen dramatic increase in deployments since the 90 s and the flexibility is adopting to business practices drives selection 17
19 The Top-7 Technology Trends we see in the marketplace: Tech Tech Trend Increased Focus on Analytics Embracing Software as a Service (SaaS) Selecting Best-of-Breed Solutions Overview Given the importance of Talent and People, organizations have moved beyond gut instinct and tribal wisdom in making workforce decisions. Analytics are fast becoming critical in making informed business decisions. Cloud computing and SaaS are the next big disruptive technologies. SaaS has already demonstrated value in terms of scalability and flexibility while reducing support costs and expensive and disruptive upgrades. Best-of-Breed Point solutions will remain a force in M vendor selections, particularly in the Talent Management space learning, recruitment, performance, succession planning, and onboarding. 18
20 The Overwhelmed Employee 19
21 Global Transformation Survey Highlights
22 Survey Participant Demographics at a Glance * Service Delivery and Technology Survey Shared Services Survey 798 participants for the Service Delivery y and Technology Survey y 198 participants for the Shared Services Survey 37 countries 28 countries 50% are global organizations 60% are global organizations *2015 KPMG Transformation Survey formerly Towers Watson Service Delivery and Technology Survey 21
23 What Makes Successful as an Operator and Project Leader? Operator Project leader Technology Operational Effectiveness Structure and Responsibility Relative Level of Satisfaction Contributing Factors focus 22
24 Global Highlights at a Glance 40% are looking to change the structure in 88% 2015 or will spend the same or more on technology. 30% will replace their core system in 2015 an all-time high. 66% 40% provide an portal. will replace their existing, on-premise system with a software-as-a-service solution. 61% 46% Asia Pacific EMEA Americas 46% 64% 78% are using or planning to use mobile technology, up from in #2 Improving line manager effectiveness is the second most popular initiative in
25 Anticipated Changes to Structure in 2015 or 2016 (Americas cut) Bringing additional services into our shared services environment 52% Moving to a shared services environment with centers of excellence (COEs) and business partners Outsourcing some/more functions Combining our shared services with other corporate functions (e.g., Finance) Bringing some/more outsourced functions back in-house 11% 10% 17% 45% Half of organizations that anticipate changes are adding additional scope to their shared services function. Have not finalized the exact nature of the changes 6% Moving to a single function for the entire enterprise 3% Decentralizing, allowing to be run by business unit or geography 1% Moving away from a shared services environment Other 7% Base: Those anticipating making a change in 2015 or 2016 (n = 99) 24
26 Top Three Initiatives Undertaken in Previous 18 Months (Americas cut) Reengineered key processes 40% Implemented initiatives for improving line managers people management capabilities Refocused the role of the business partners Built or further invested in an analytics function Implemented and/or further leveraged manager self-service 29% 27% 25% 24% Implemented a new talent management system 20% Implemented a new core system Outsourced activities previously handled internally Implemented a new portal Implemented a shared services model Changed the scope of the COEs within 16% 16% 15% 12% 12% Introduced new types of collaboration tools for the delivery of services Built or further invested in an project management office (PMO) function Brought back services previously outsourced to a vendor Other 7% 7% 4% 7% (n = 244) 25
27 Focus on: Technology Software- as-a- Service 26
28 Focus on: Technology Investment in MS continues to grow and is now doing so at an exponential rate. Organizations are replacing their core MS more frequently than ever before. Everyone is changing, but the changes vary by region. Asia Pacific Oracle/PeopleSoft EMEA SAP/SuccessFactors Americas Workday 27
29 Primary MS (Americas cut) Oracle/Peoplesoft 29% SAP 17% Workday 12% Infor/Lawson 7% Oracle (Legacy Oracle MS) ADP/Enterprise Ultimate Software/Ultipro Custom/In-House 7% 6% 4% 4% Responses of less than 2% for the Americas: SAP/SuccessFactors Employee Central ADP/Globalview ADP/Vantage Infor/Infinium SumTotal Sage Ceridian 3% Other (please specify): 11% (n = 250) 28
30 Is Your Organization Implementing or Planning to Implement a New Primary MS? (Americas cut) New MS Chosen Workday 40% SAP/SuccessFactors Employee Central 13% Oracle/Peoplesoft 8% ADP/Enterprise 6% No 71% Yes 29% Infor/Lawson 6% Ceridian 5% Ultimate Software/Ultipro 2% Currently evaluating new MS options 17% (n = 252) Other 3% (n = 64) 29
31 Focus on: Technology portals meet or exceed expectations 69% of the time. Keys to a successful portal mobile content searchable Mobile apps are effective 85% of the time. 30
32 Current Portal Technology (Americas cut) What Is the Primary Reason You Deployed an Portal? Which Challenges Do You Have With Your Existing Portal? Promote employee/manager selfservice Single point of communication for to employees One-stop shop for access to all systems Information sharing/knowledge management Ensure compliance/policy communication Social/Collaboration across enterprise Other 4% 1% 8% 25% 23% 39% Search capabilities are not effective Site does not support mobile (tablet or phone) Content is difficult or takes too long to maintain and update Limited analytics on website usage Content is stale Information is too generic or lacks enough personalization Multiple websites with overlapping or competing Lack of governance for content management Access is limited to only intranet connections (not Internet) Sites have inconsistent branding, look and feel, or Too many logins to systems 55% 54% 50% 48% 41% 40% 38% 34% 28% 25% 22% (n = 124) (n = 123) 31
33 How Are You Using Mobile Technology? (Americas cut) Employee self-service 60% Manager self-service 55% Viewing wage/benefit statements 45% Expense approval 38% Time card approval 38% Time entry 35% Recruiting 33% Logging issue tickets 8% Other 10% (n = 40) 32
34 Focus on: Operational Effectiveness of talent management technology 74% of those using technology for performance management say the technology is effective. Yet 28% still use paper. 69% of those using technology for global grading/job leveling say the technology is effective. Yet 42% still use paper. 79% of those using technology for core compensation activities say the technology is effective. Yet 47% still use paper. 9 33
35 Primary Delivery System Currently Used for Talent Management (Americas cut) Compensation Base pay (n = 169) Compensation Variable pay/bonus (n = 167) Recruiting/Staffing Internal (n = 169) Performance management (n = 167) Recruiting/Staffing External (n = 169) Workforce planning/analytics (n = 142) Compensation Global grading/job leveling (n = 141) Total rewards statements (n = 114) Compensation Sales/Incentive (n = 131) Compensation Long term/equity/stock (n = 125) Learning management and training (n = 161) Career development/planning (n = 173) Onboarding/Joiner administration (n = 158) Succession planning (n = 146) Compensation Market analysis/survey management (n = 153) 49% 35% 35% 33% 33% 29% 29% 28% 27% 25% 25% 24% 19% 11% 64% 15% 9% 11% 27% 42% 17% 54% 14% 19% 7% 4% 32% 16% 17% 57% 4% 5% 14% 23% 21% 16% 32% 31% 34% 26% 11% 18% 21% 33% 33% 15% 25% 53% 16% 6% 26% 29% 15% 16% 33% 31% 17% 37% 12% 34% Current MS Best-of-breed technology Custom/In-house tool Manual/Paper-based 34
36 Focus on: Operational Effectiveness Companies with shared services 85% of organizations are meeting or exceeding expectations with shared services. Almost 9 out of 10 questions/inquiries are solved by self-service and shared services. 35
37 General Operating Metrics Performance Measures (Americas cut) Performance measure Average target Average actual Response time for calls routed to Tier 1 (n = 14 15) 82% of calls within 34 seconds 83% of calls within 35 seconds Average time to answer for calls to Tier 1 (n = 17 18) 32 seconds 33 seconds Average hold time during a call (n = 5 7) 54 seconds 79 seconds Abandonment rate (begin counting when call first goes into queue) (n = 22 25) 4% 4% Calls escalated (n = 7 10) 29% 23% Resolution rate on first call (n = 22 23) 78% of calls resolved or closed on first call 73% of calls resolved or closed on first call Callback response time for calls unresolved (n = 6 7) 93% within 38 hours 89% within 40 hours Average time to resolve and close open cases (n = 19) Two days Two days Response time for requests (n = 14 15) 96% within 26 hours 91% within 25 hours Response time for voic requests (n = 7) 95% within 31 hours 90% within 31 hours Transaction input accuracy (n = 13 14) 98% accuracy 90% accuracy Activities shown here were chosen by a group of subject matter experts as the top activities on the minds of our clients. 36
38 SS Technologies Used (Americas cut) Case management (n = 73) Quality monitoring (n = 69) Knowledge base tool For use only (n = 73) Call transfer/routing (via VRU to external vendor) (n = 71) Document imaging/management (n = 74) Knowledge base/portal tool For employee use (n = 71) Voice response (VRU, IVR) (n = 72) eforms (n = 72) Web chat (n = 74) Collaborative browsing (n = 73) Voice over Internet Protocol (VoIP) (n = 72) Online (audio/video) (n = 71) Computer telephony integration (screen pop) (n = 72) Enterprise 2.0 tools (e.g., wikis, forums) (n = 69) Crowdsourcing (n = 69) 7% 15% 57% 19% 10% 14% 54% 4% 9% 33% 51% 16% 10% 23% 48% 6% 8% 38% 46% 43% 17% 18% 14% 15% 23% 24% 41% 7% 10% 42% 40% 40% 40% 10% 4% 22% 22% 19% 28% 34% 38% 39% 33% 4% 18% 15% 42% 48% 32% 7% 15% 46% 25% 59% 25% 67% Note: Values of 3% or below do not have the percentage number displayed. In place now and not planning to change/deployed in 2014/Deploying in 2015 In place now but planning to change Beyond 2015 or no plans We do not use this technology 37
39 Focus on: Structure and Responsibility Percentage of overall headcount aligned to specific functional areas 9% 11% 11% leadership 24% 22% 14% 14% business partners 22% generalists 20% operations/ shared services 24% Centers of expertise 9% Other 20% 38
40 Median Employee to Staff Ratios (Global Data) Industry All Small Between 1,000 and 4,999 employees Medium Between 5,000 and 20,000 employees Large Greater than 20,000 employees n Ratio n Ratio n Ratio n Ratio Chemical, Oil and Gas 25 1:86 Insurance 128 1: : : :85 Healthcare (incl. Pharmaceuticals) 53 1: :117 High Tech (incl. Semiconductor) 78 1: : :75 Manufacturing 77 1: : :94 Professional and Business Services 45 1: :70 Property and Construction 22 1:98 Public Sector and Nonprofit 21 1:73 Retail 50 1: :116 Transportation Services 19 1:86 Utilities and Energy 54 1: :50 Global 278 1: : : :91 Multinational 81 1: : :98 Domestic 249 1: : : :120 All Firms/Organization Types 609 1: : : :103 Note: A indicates that the sample size was insufficient to ensure data accuracy and that the data has been excluded from this survey. 39
41 Organizations that have successfully transformed have done the following things 62 % 54 % Of organizations focus on involving professionals in the design and implementation of the change. Of organizations have ensured leadership ownership in the implementation of the change. 65 % Of organizations who failed at their transformation did not identify measures for success. 96 % Integrated changes to process and roles when implementing technology. 40
42 Focus on: Operational Effectiveness Manager self-service and shared services are the enablers for effective line managers. 41
43 Where should Focus?
44 So, where should focus? Invest in leadership at all levels and ensure clear career paths and succession plans exist Expand your employee engagement thinking including a revised Performance Management Process Embrace new technologies that deliver an improved employee experience and lower cost of ownership Build your Case for Change by focusing on what s best for the business Build an efficient and scalable operating model so you invest in building capabilities that support the business Revisit your talent acquisition strategy to make sure it s modern and social, and you have a compelling and authentic employment brand Performance management is broken: Replace annual ratings with real-time coaching and development Be bold, innovate, and invest in people, especially millennials Take a serious look at the overwhelmed employee and find ways to simplify his/her work environment 43 43
45 Appendix
46 About the Transformation Survey The 2015 KPMG Transformation Survey, formerly Towers Watson Service Delivery and Technology Survey, is in its 18 th year and was fielded between the second week of January and the second week of February In total, 798 organizations across 37 countries participated. Half of these participants are global organizations. During the same survey window, organizations that utilize shared services functions were given the opportunity to complete a follow-up survey: 198 organizations across 28 countries participated; 60% of these organizations are global. In both surveys, responses came from a broad cross section of industries, with the largest number concentrated in financial services, high technology, manufacturing, professional services, healthcare and hospitals, and retail. 45
47 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International.
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