Companies have speeded up their move to cloud-based HR platforms amid the pandemic and say they expect adoption to grow in the coming years, according to a new survey from ISG.
The ISG survey of 260 companies worldwide found 46 percent using an HR Software-as-a-Service (SaaS) platform or hybrid solution, up from the 20 percent who said they were using a cloud-based solution two years ago. The survey found 57 percent of organisations expect to be using a subscription-based SaaS or hybrid solution by 2023.
Study co-author Stacey Cadigan said that in 2020 the COVID-19 pandemic changed work in “unimaginable ways” and increased focus on the potential of HR SaaS technologies to engage employees better and support a virtual workforce, improve productivity and enable a more agile HR model.
“Our survey reveals a growing interest in HR SaaS, as more and more companies realise measurable business value from a platform-based approach.” A hard sentence to parse.
The survey found 64 percent of companies say they are achieving measurable business value from their investment in HR SaaS platforms, up 23 percentage points, or about 50 percent, since 2019, the last time ISG conducted the survey. Business value adds up to measuring productivity, cost savings and employee retention – deciding whether to keep people in jobs or jettison them.
Among the measures of business value, the survey found organisations achieving significant HR cost savings from moving to HR SaaS solutions, with 70 percent reporting savings of 10 percent or more and 37 percent achieving savings of 20 percent or more.
Report co-author Deb Card said: “HR technologies delivered value by enabling real-time, data-driven decision-making, fostering connections and collaboration among employees in a remote work environment, monitoring performance, productivity and engagement, and enabling virtual recruiting, onboarding and offboarding.” A hard paragraph to parse.
Many leading SaaS HR solutions added COVID-specific functionality to comply with new payroll legislation, track COVID cases and help manage the return to work, Card said.
The study found a strong correlation between an organisation’s success at aligning its service delivery model and processes with its new HR platform and its ability to achieve business results.
Companies are evenly split between their use of internal shared services and outsourcing delivery models, but the report shows an evident migration toward outsourcing since the 2019 and 2017 reports. Among the 11 HR functions analysed, the most significant move toward outsourced or hybrid delivery models was in the areas of payroll and health and wellness benefits administration.
The survey found seven in 10 organisations expect a significant percentage of their employees (more than 20 percent) to work from home in 2022 and beyond, with the most common view that between 20 and 40 per cent will work from home.
