Hewitt Survey Finds Global Companies Are Moving HR Functions in the Right Direction, But Opportunities to Improve Efficiency Remain

2009-09-10 10:04 878

HR Departments Face Increased Pressure to Provide Support in an Increasingly Global Business Environment

SHANGHAI, China, Sept. 10 /PRNewswire-Asia/ -- As business globalization and cross-border trade and investments have accelerated over the last decade, companies have a more globally dispersed workforce than ever before. According to a new survey by Hewitt Associates, a global human resources consulting and outsourcing company, human resources (HR) departments have made steady progress in their ability to support the shift toward a more global business model and workforce. Yet, for many companies, questions remain on how exactly HR should be aligned from a strategy, organizational and delivery perspective. This issue is even more pressing in the current economic environment, as HR departments are being challenged to improve the effectiveness of their global HR programs and reduce global HR delivery costs.

Hewitt's survey of 85 global companies, in Latin America, North America, Asia-Pacific and Europe, found that organizations are moving in the right direction to develop global HR strategies that meet the diverse needs of their workforce across businesses and geographies. Almost half (49 percent) of companies indicated that their global HR strategy applies to all of their operating regions -- not just their primary location -- with most organizations conducting HR activities at a global, regional and local level depending on the process and the business needs. Additionally, HR is leading rather than lagging behind the business when it comes to moving to a more global focus; 30 percent of companies describe their HR organization design as global compared to 15 percent of companies that describe themselves as global.

On the other hand, companies have been slow to adopt more consistent global processes as a means to increase efficiencies -- leaving much room for improvement. Only 19 percent of companies have consolidated core HR services at a global level, 23 percent have consolidated talent management, and 18 percent have leveraged self-service globally.

"As cost demands on HR departments become greater, they need to be more deliberate and focused on critical areas that provide the greatest impact to the business including streamlining HR at the regional and global levels," said Pete Sanborn, leader of Hewitt's global HR Effectiveness business. "Leading HR departments at global organizations excel at developing effective governance mechanisms and metrics that support driving global HR strategies and reducing HR operating costs while meeting the needs of individual locations and businesses."

Planning for the Future

Looking ahead one to two years, Hewitt's survey found that companies are searching for additional ways to manage their global workforce more effectively and efficiently and to improve global operations. Not surprisingly, managing talent at a global level is a primary focus for most organizations. More than half (55 percent) plan to increase the integration of talent management processes on a global level, and 49 percent will implement more robust human capital measurements. Just as many (48 percent) plan to implement technology to support their talent management efforts.

Mr. Xu Feng, vice president of Hewitt Greater China, said: "In recent years, the number of Chinese enterprises going abroad has increased significantly; there are examples of both success and failure. Among these, the human resources department plays an important role. However, the report shows that the Chinese enterprises lag behind the global average on the use and the coverage of global human resources strategy. However, we find that 43% of globally-expanding Chinese enterprises have provided core human resources services at the global level; this figure is much higher than the global average figure 19%, which shows that Chinese enterprises have already reached a high level at the beginning of globalization, attaching great importance to the consistent global processes of human resource strategy.

"In the context of today's economic crisis and business globalization, human resources not only needs to focus on cost control and improving efficiency, but more importantly on gaining commercial sensitivity and globalization management capabilities; therefore, Chinese enterprises need to increase efforts to change human resource management models, as well as provide core human resource services at the global level, making human resources create value for the enterprise and become a booster for business growth."

About Hewitt Associates

Hewitt Associates (NYSE: HEW) provides leading organizations around the world with expert human resources consulting and outsourcing solutions to help them anticipate and solve their most complex benefits, talent, and related financial challenges. Hewitt consults with companies to design and implement a wide range of human resources, retirement, investment management, health management, compensation, and talent management strategies. As a leading outsourcing provider, Hewitt administers health care, retirement, payroll, and other HR programs to millions of employees, their families, and retirees. With a history of exceptional client service since 1940, Hewitt has offices in 33 countries and employs approximately 23,000 associates who are helping make the world a better place to work.

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Source: Hewitt Associates
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