Benefits August 9, 2005

Survey: Strategic HR Departments Make Significant Contributions

August 9, 2005 (PLANSPONSOR.com) - An Atlanta-based HR outsourcer has found that HR departments have to cope with not having time to address both administrative tasks and strategic issues, lack of involvement with setting the corporate goals, and insufficient budget to address strategic issues.
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Respondents to an Employease survey were divided into two groups. HR departments who spend 50% or more of their time on administration were deemed transaction-oriented, and those that spent 50% or more of their time on strategic issues were labeled strategically-oriented.

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According to an Employease news release, transaction-oriented HR departments encountered these barriers more frequently than their strategically-oriented counterparts. They were 42% more likely to be burdened by administrative tasks, 31% more likely to have limited involvement in setting corporate goals, and 22% more likely to reference the leading provider of on-demand HRIS, benefits administration and outsourcing solutions.

“There has never been a better opportunity for HR to elevate its impact on the organization,” said Michael Martin, director of research at Employease, in the news release. “Technology and a convergence of business factors are creating both the need and the means to catapult HR contributions into the executive suite.”

According to the survey, strategic HR departments have found ways to get around many of these barriers by harnessing technology and outsourcing services. Strategic HR departments are much more likely than transaction-oriented units to utilize:

  • employee self-service (57% versus 32%)
  • manager self-service (39% versus 21%)
  • enrollment services (52% versus 38%)
  • hosted web-based HR systems (40% to 27%).

A strategic approach to HR may also impact management’s impression of HR. HR professionals were asked which activities would be viewed by management in their organizations as delivering strategic value. Responses in order were:

1. Recruiting and hiring key employees

2. Collaborating with top management on achieving company goals

3. Controlling healthcare costs

4. Crafting compensation plans aligned with corporate objectives

The study also found that transaction-oriented departments were much less likely to have frequent interaction with top management. In fact, 79% of strategic-oriented departments interacted with top management on a daily or weekly basis compared to only 45% of their transactional counterparts, the survey found.

In the study, conducted by TwentyTen Research, 336 respondents from companies with 1,000 to 10,000 employees identified strategic HR qualities and activities as well as barriers to playing a more strategic role. More information about Employease is at http://www.employease.com .

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