Management of HR Systems. 4 th Australian HR Technology Report

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1 Management of HR Systems 4 th Australian HR Technology Report

2 management of HR systems Introduction Welcome. The Australian HR Technology Report is a study commissioned by Navigo Research, a research and advisory team operating under the Navigo Group. This year s report sees responses from 288 different organisations representing almost 690K employees. This year we have divided the results into two reports. This document looks at aspects associated with the management of HR systems. Our second longer report looks at HR System Adoption rates. When it comes to management of HR Systems, Australian organisations spend a lot of time trying to get more out of their legacy on-premise solutions. HR is driving HR Technology strategy and there is a requirement for mobile and analytical ability, but it seems neither are being satisfied. Cost and budget is the major road blocker to investment in HR technology and 32% of respondents did not know what their budget was for the year. Operational efficiency is still the main motivation for investing in HR technology. Software as a Service (SaaS) usage continues to grow as a method of deployment for Core HRIS although security and data privacy is still a barrier for adoption. Enjoy the report. Peter Forbes and Michael Specht 2

3 table of contents 01 SaaS Deployment 04 Motivations and Roadblocks 02 Usability 05 Strategies, Major Initiatives and Budgets 03 Management of HR Technology 06 Respondent Demography and Method

4 SaaS Deployment

5 SaaS Deployment Current HRIS Deployment Models Software as a Service 500% growth year over year 6% 5% 13% SaaS - subscription based Don't Know 11% Licensed software - Hosted Licensed software On-premise Outsourced Service 65% (n=227) section 01 5

6 SaaS Deployment What is your organisation's preference for the deployment of HR Technology? Software as a Service Today only 5% of organisations have their Core HRIS deployed in a SaaS model, with 24% indicating that SaaS is their preferred 23% 2% 24% Don't Know No Preference approach. 51% of organisations who have a preferred deployment of SaaS currently use an on-premise core HRIS. Vendors who do not offer SaaS - subscription based deployment will potentially have a 6% 20% 25% Perpetual Licensed - Hosted Perpetual Licensed - On-premise Outsourced reduction in market share over the next few years. 25% of respondents indicated they did not know their organisation s preference with another 20% saying the organisation had no preference. (n=218) section 01 6

7 SaaS Deployment What are the barriers you foresee in moving to SaaS for HR Technology? Concerns about security/data privacy 11% 4% 13% 12% 16% 6% 26% 12% Concerns about system reliability Inability to use operational budgets to fund subscription payments Integration complexities Customisation limitations Lack of functionality Lack of control around upgrades Other (n=285) section 01 7

8 Usability

9 Usability How usable is the self service (employee and manager) module? 13% Usability directly impacts the level of engagement and satisfaction your managers and employees have with the solution. 18% 69% Acceptable Excellent Poor Core HRIS solutions that have been in place for less than two years are more likely to be rated by users as having excellent usability of the employee self service functions. The more usable your employee self service features are the less requirement there is for training and support. (n=228) section 02 9

10 Management of HR Technology

11 management of HR technology How many systems does your HRIS send or extract data from? 6% 7% Smaller organisations tend to have less integrations. 22% None Between 1 and 5 Between 6 and 10 Greater than 15 65% (n = 218) section 03 11

12 management of HR technology Does your organisation have formal controls (governance) around HR Data Management? Have controls For many organisations a lack of data accuracy or trust in HR data is a significant barrier to acceptance of HR reporting projects or systems. One method to ensure the data in your organisation is accurate and trusted is to implement Data Governance practices. Larger organisations more likely to have formal controls in place. Data Governance is the convergence of concepts around data quality, data management, data policies, and business process management to ensure accuracy of data in your organisation. Too often we hear from customers that no one trusts their data or that their data is wrong. To this end we wanted to explore how many organisations had implemented controls around their data, surprisingly 74% of organisations said that they had formal controls (governance) around HR Data Management. 74 % Given the noise we hear in the market place about poor data we can only assume that these formal controls are not working. (n = 258) section 03 12

13 management of HR technology Describe the nature of HR reporting and analytics in your organisation? 18% 2% 19% Predictive analytics and big data are 2 of the top 3 new technologies impacting HR Service Delivery. Models future scenarios to predict business outcomes 61% Provides analytics linked to additional business data driving business decisions Provides limited metrics based solely on HR data Provides basic list type reports (n = 218) section 03 13

14 management of HR technology Staffing Ratios Average 1: employees employees 1,000-2,499 employees 2,500-4,999 employees 5,000-9,999 employees 10,000+ employees Average of HR to Employee Ratio Average of HRIS to Employee Ratio (n = 258) section 03 14

15 Motivations and Roadblocks

16 motivations and roadblocks Motivation and Roadblocks to improving HR Technology Motivations Roadblocks 1. Improved Operational Efficiency 1. Cost and budget 2. Meeting business objectives/strategy 2. Time and resources 3. Compliance/Legislative requirement 1 spot 3. Management buy-in 4. Systems modernisation 1 spot 4. Existing system and technology restrictions 1 spot 5. Reduce operational costs/headcount 2 spots 5. Lack of HR Technology strategy 1 spot 6. Global initiative/directive 1 spot 6. Lack of decision making ability 1 spot 7. Mergers and Acquisitions 1 spot 7. Poor understanding of available HR Solutions 1 spot section 04 16

17 motivations and roadblocks Changes year over year The top two motivations and roadblocks have not changed substantially year over year. However the order of importance of the other motivators and roadblocks have changed since last year. Legislative compliance and systems modernisation have both increased as primary motivators for investing in HR Technology. Where as Reduce operational costs/headcount have reduced year over year. Investing in HR Technology to reduce operational costs or headcount decreased by 4% as a motivation since the last survey. At the same time the number of respondents indicating costs and budget as the number one barrier to investment increased by 2%. Existing system and technology restrictions has also increased slightly in the last year to be come the 4 th highest barrier to investment. section 04 17

18 Strategies, Major Initiatives and Budgets

19 strategies, initiatives and budgets What technology is most important to HR Service Delivery? 60% 50% 40% 30% 20% 10% 0% (n=289) Mobile enablement Predictive Analytics Big Data in HR Collaboration Tools Cloud Computing Social Media Video Interviewing Gamification section 05 19

20 strategies, initiatives and budgets Where has your effort been expended over the last 12 months? 7% Performing software upgrades on existing systems 27% 36% Implementing new systems in functional areas that previously did not have technology Replacing existing systems with a new vendor 10% 20% Implementing functionality in existing systems Other - Please Specify (n=302) section 05 20

21 strategies, initiatives and budgets Who is the driver of HR Technology in your organisation? 2% 5% 3% 31% Combination of reps from groups Finance Not sure HR 53% 3% 3% IT No one - we don't have anything in place Other - please specify (n=302) section 05 21

22 strategies, initiatives and budgets What is your HR Technology Budgets for the coming year? 0% 1% 32% 1% 11% 6% 6% 19% 24% Greater than $10m Between $5m - $10m Between $1m - $5m Between $500k - $1m Between $100k - $500k Between $50k - $100k Less than $50k Nothing Don't Know (n=212) section 05 22

23 Respondent Demography and Method

24 respondent demography and method Methodology Method Sampling Bias Primary research for the Australian HR Technology Report was conducted in the form of an online survey. The survey was carried out between February and March Our respondent profile are individuals working in HR or IT, in Australia, for organisations with 100 or more employees. Overall 288 responses from 258 unique organisations fit our respondent profile. Where we received more than one response from an organisation all subjective (opinion) answers are included. Objective (fact) answers were compared and combined or investigated further if required. Navigo offers HR Technology related products and services and our customers do account for a higher percentage of the survey population than the total market. This could cause a sampling bias that represents the HR solutions Alesco, chris21 and Aurion as more popular than reality. Our aim is to get an accurate representation of the market, and we invited the majority of HR vendors to promote the survey to their customer base. This again could cause a sampling bias where one vendor has promoted the survey over another. section 06 24

25 respondent demography and method Roles and Organisation Size 2% 13% 3% 4% 19% Role 59% IT Role HR Role Non-HR Role Payroll Role Other HR/Payroll Technology Role 14% 11% 5% % Size 22% 17% 1,000-2,499 2,500-4,999 5,000-9,999 10,000+ (n=256) section 06 25

26 respondent demography and method Industry Breakdown Accommodation / Food Services 1% Agriculture / Forestry / Fishing 1% Arts / Recreation Services 1% Business / Professional Services 3% Computers (Hardware, Software) 2% Construction 1% Consulting 1% Education / Training 10% Electricity / Gas / Water Supply 6% Engineering / Architecture 2% Entertainment / Recreation 1% Finance / Insurance 10% Government 16% Health Care / Social Assistance 8% Legal 3% Manufacturing 5% Media / Printing / Publishing 1% Mining 3% Non-Profit 6% OTHER 9% Research / Science 1% Retail Trade 4% Telecommunications 1% Transportation / Distribution 3% Wholesale Trade 1% section 06 26

27 About Navigo Navigo Research provides industry news, vendor profiles, and market research into the Australian HR Technology scene. Navigo Research is operated by Navigo, a leading HR software solutions and consulting company operating since Our purpose is to provide advice and guidance to organisations regarding the best possible use of HR technology and how to leverage people and investments to create great companies. Our team consists of research analysts and consultants who are experts in HR related technology solutions in the Australian market. Since 2009 our annual survey, the Australian HR Technology Report, has been taking the pulse on how HR is using technology. For organisations we provide advisory services in HR Technology strategy, HR Operations/Systems management, integration solutions and HRIS functional consulting. For HR Vendors we offer education services, market research and vendor briefings. Learn more at 27

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