SOURCE: ADP

ADP

March 03, 2009 08:30 ET

ADP and HROA Report Reveals HR Transformation Continues to Gain in Popularity

Global Appetite for HR Transformation Is Stronger Than Ever; Up From 75 Percent in 2006 to 90 Percent in 2008

ROSELAND, NJ--(Marketwire - March 3, 2009) - ADP ® Employer Services, a leading provider of HR, payroll and benefits administration services, today released a joint report with the Human Resources Outsourcing Association (HROA®) revealing that the Human Resource (HR) transformation movement is continuing to gain momentum globally. The report uncovered that a full 90 percent of respondents are currently working on HR transformation(1), up from 75 percent in 2006. Additionally, 64 percent of respondents said that they intend to expand the scope of their HR transformation in the coming years.

Now in its fifth year, the 2008 Global HR Transformation Report studies trends in HR transformation practices in organizations around the globe. The report addresses key areas involved in the HR transformation process such as: reasons organizations transform and the barriers that limit their transformation; transformation timing; cost and satisfaction; engagement of external resources and experience; current and future transformation; and, HR outsourcing and shared services strategy, budget and provider selection.

"The steady growth in HR transformation practices on a global scale reinforces that organizations rely heavily on the business-critical services provided by HR. The underlying challenge faced by HR professionals to achieve cost savings and transformation goals persists, especially as pressure increases in today's consistently shifting environment," said Greg Secord, Division Vice President, Marketing & Strategy, ADP Employer Services International and National Account Services. "This report reinforces the need for ongoing HR transformation initiatives and offers valuable insight to help HR meet the challenges ahead."

As in past years, the report underscores that there are still hurdles when it comes to HR transformation. For the last three years, the skills of existing HR staff have ranked as the number one impediment to HR transformation. Other impediments include internal bureaucracy, lack of adequate technology and change management issues.

"HR transformation is an integral part of many global HR organizations and is clearly on the rise. As this report reveals there are still multi-faceted challenges that are impeding the effective deployment of transformation," said Richard Crespin, Global Executive Director of HROA. "Through the continued efforts of the HROA and ongoing research, we can help overcome obstacles and help HR executives find innovative ways to address challenges and achieve success."

The research report is divided into four sections: Transformation Status, Transformation Scope, Transformation Outcomes to Date, and Outsourcing and Shared Services.

Additional key findings from the report revealed:

--  Either buyers aren't taking advantage of resources that are available
    in the market, or providers and advisors aren't providing the resources
    that buyers need: 70 percent of respondents report that they develop their
    own processes for identifying and selecting a provider, and only 48 percent
    say they engage consultants or sourcing advisors.
--  Satisfaction with HR transformation is highest in areas impacting
    organizational alignment, an important area as it ranks among the top five
    reasons organizations transform HR. Keys to success include: access to
    better tools/resources; change management and education; management support
    at both the top and line levels; and, alignment, focus and standardization.
--  Nearly two-thirds of organizations that are transforming HR are
    meeting or beating their cost savings goals of 16 to 25 percent. Price is
    now the most significant criterion in provider selection, up from the third
    and fourth rank in 2007 and 2006, respectively.  Multi-country capabilities
    and functional coverage and expertise round out the top three in 2008.
--  The most commonly outsourced processes continue to be transactional in
    nature, including payroll, and pension and benefits administration.
    However, recruitment outsourcing, a "hot commodity" in the HRO arena,
    continues to grow.
--  Although too soon to establish a firm trend, the report revealed a
    decline in the use of shared services across all HR processes between 2007
    and 2008.
--  The report also gauged the different methods organizations use to
    overcome HR transformation hurdles finding that just over two-thirds of
    respondents (65 percent) report that they are currently outsourcing or
    planning to outsource functions for one or more HR processes.  The most
    commonly outsourced processes include payroll and pension and benefits
    administration.
    

Research Demographics

A total of 129 respondents completed the 2008 Global HR Transformation Survey online. More than half (55 percent) of the respondents are located in EMEA -- 48 percent in Europe and 7 percent in the Middle East and Africa. 39 percent are located in the Americas -- 37 percent in North America and 2 percent in South America. The remaining 6 percent are located in the Asia-Pacific/Australia region.

More than three-quarters of respondent organizations (77 percent) have revenues of more than US$1 billion; 36 percent have revenues of more than US$10 billion and half of all respondent organizations employ more than 25,000 people globally. Respondents also reflect a broad industry distribution including: manufacturing, transportation & communication, finance, insurance and real estate as well as other services.

Nearly three-quarters (73 percent) of all survey participants hold HR functions, 11 percent are in strategic planning and the remainder are spread among a variety of functions at multinational organizations that operate in 10 or more countries. Most respondents (51 percent) hold the job title of vice president or director, or manager (31 percent).

To download a copy of the 2008 Global HR Transformation Report, visit www.hroa.org.

About ADP

Automatic Data Processing, Inc. (NASDAQ: ADP), with nearly $9 billion in revenues and over 585,000 clients, is one of the world's largest providers of business outsourcing solutions. Leveraging nearly 60 years of experience, ADP offers the widest range of HR, payroll, tax and benefits administration solutions from a single source. ADP's easy-to-use solutions for employers provide superior value to organizations of all types and sizes. ADP is also a leading provider of integrated computing solutions to auto, truck, motorcycle, marine and recreational vehicle dealers throughout the world. For more information about ADP or to contact a local ADP sales office, reach us at 1-800-225-5237 or visit the company's Web site at www.adp.com.

About the HROA

The HROA is the definitive independent organization for all those who purchase, provide, or participate in HR transformation and outsourcing. The mission of the European Chapter is to educate, promote research, publish, recognize, and provide networking opportunities to foster professionalism in HR transformation and HR outsourcing across Europe. Its membership encompasses over 7,500 HR executives, including the largest 50 buyers, the top 30 providers, the leading sourcing advisors and attorneys, and the best thought leaders in HR Transformation. The HROA brings its diverse membership together to set standards and practices, provide peer networking, and maintain a robust curriculum.

For information about the HROA, visit www.hroa.org.

(1) For the purposes of this report HR Transformation is defined as any concerted effort to change and improve HR operations, whether through outsourcing, shared services, internal reengineering or a combination of these strategies.

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