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

LINCOLNSHIRE, Ill.--(BUSINESS WIRE)--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.

“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.”

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 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 more effectively and efficiently manage their global workforce and 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.

“Our research shows that many organizations face significant capability gaps in critical areas such as strategic thinking, business acumen and managing/facilitating change,” said Diane Caldwell, senior Hewitt consultant and study lead. “Leading companies are focusing on developing the critical HR capabilities that are needed to keep pace with the increasing complexity of supporting global 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 works with companies to design, implement, communicate, and administer a wide range of human resources, retirement, investment management, health care, compensation, and talent management strategies. With a history of exceptional client service since 1940, Hewitt has offices in more than 30 countries and employs approximately 23,000 associates who are helping make the world a better place to work. For more information, please visit www.hewitt.com.

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