HR organizations got a boost in investment in 2014, with budgets up an average of 4% over the prior year. Much of the extra money went to increased headcount, with HR staffing up 3%, on average. Another big area of investment was HR technology, with one-fifth organizations saying they increased their spending on HR systems during 2014.  So how are these investments paying off? Unfortunately, for most organizations, not very well. In Deloitte’s newly-released study, just 36% of organizations rated their HR team's performance as either "good" or "excellent." And these ratings are not significantly better than in past years (see Figure 1.)   So for many organizations, the additional investments in HR technology, staffing, programs, and other intiatives have not paid off. But some HR groups are different, and HR leaders would do well to learn some lessons from these organizations. Our research describes a growth model in the maturity of HR capabilities. Most HR organizations start out as "compliance-driven" functions, focused on primary services such as payroll and benefits and meeting legal requirements. Over time, HR organizations need to expand their scope of initiatives and business alignment. At the highest stage of maturity, the "business-integrated" HR organization helps drive the business through workforce strategies and people data. These business-integrated HR functions do spend more than their less mature counterparts - $4,434 per employee, on average, as compared with just $2,112 among compliance-driven HR functions. But the difference is, their efforts are paying off. As evidence, business-integrated HR organizations have lower involuntary turnover compared to compliance-driven HR organizations (8% vs. 11%)—and each percentage point drop in turnover can be worth millions to a large organization. In addition, companies with business-integrated HR organizations have higher promotion rates, creating solid talent pipelines that enable them to take a long-term view of roles and future needs. So when HR organizations look at their budgets, they need to ensure their spending is helping to enhance their effectiveness. The Deloitte study recommends the following to help organizations get started: Design the HR organization to deliver solutions: For many businesses, it is time to redesign HR with a focus on consulting and service delivery, not just efficiency of administration. HR business partners must become trusted business advisors with the requisite skills to analyze, consult, and resolve critical business issues. Create business-integrated "networks of excellence." High-impact HR teams have different staffing models, relying more in specialists embedded in the business.  Recruitment, development, employee relations, and coaching are all strategic programs that should be centrally coordinated but locally implemented. When specialists in these areas live and work close to the business, their impact is greatly enhanced. Make HR a talent and leadership magnet: How do people get HR jobs in your company? If they accidentally move into HR, this may be holding you back. Create rigorous assessments for top HR staff and rotate high performers from the business into HR to create a magnet for strong leaders. Invest in HR development and skills as if the business depended on it:  Invest in professional development to make sure your HR team is constantly sharpening its own saw and developing the necessary skills to survive. Analytical skills are becoming a must for HR professionals, but many lack the ability to interpret data and communicate findings based on analytics.  Other capabilities to focus on include business acumen, consulting skills, and organizational design and change management. For more information, see Human Capital Trends 2015 and HR Factbook 2015.

I attended the SAPinsider HR conference in Las Vegas this last week - and the energy of the audience was contagious. Let me share nuggets of what I gleaned from attendees: If your production environment is on-premise, you will not be planning any rip and replace strategies in the near term; while aspects of an ERP may in fact be more cumbersome than desired, that working business infrastructure is not up for replacement. If, on the other hand, your talent management applications (learning or hiring management, for example) are on-premise, you are not only possibly ripe for replacement, but very likely seeking a Cloud-based solution rather than on-premise software. If you are part of the 44 percent[1] who are planning to replace an HRIS system this year, you are seriously investigating a Cloud solution. Payroll is generally scary.  If users have a working solution today that covers their global payroll needs, they are unlikely to replace it. Two scenarios, however, lead to payroll replacement:  companies that are replacing an older on-premise system that had embedded payroll, and those simply contemplating a change of payroll providers; these seem "up for grabs," as the saying goes. What does all this mean?  First, the understanding of what software-as-a-service (AKA Cloud computing) has grown exponentially. Today’s HRIS/HRIT professionals in general exhibit solid understanding of the concept, the advantages and sometimes-radical changes that may emanate from cloud computing.  Second, the two fears about Cloud computing -"Is my data safe?  Can I keep employee data private?" are oh-so yesterday.  Today’s buyers are in the main comfortable with both the security of HR and talent management in the Cloud, and the ability to keep it private via multi-tenant solutions. The SAP HR Future SAP CEO Mike Ettling stated in his keynote that the company would support its on-premise HCM solution until 2025, giving its 14,000+ users ten years to consider a move to the Cloud-based Employee Central, the product that SAP is putting its longer-term Core HR development Euros into.   Today’s HR and HRIT professionals at the conference seem to be very serious in their commitment to the concept of talent management. They are also savvy buyers—and looking at the SuccessFactors’ Cloud solutions in many cases as a replacement for on-premise learning, as one prominent example. Will the Cloud be a solution for everyone? Absolutely not. There are reasons why an organization might not be bounding to the Cloud. For example: The company currently has extra capacity in its data center and an internal IT staff which is not utilized 100 percent. The organization is a highly complex setting with rigid compliance requirements. It is an environment that require extensive customization to meet its business needs. It is an extremely high-secure environment (for example, federal security or top-secret defense sites). The company is located in as region with a highly unreliable communications infrastructure. Our research shows that 52 percent of buyers planned on using Cloud-delivery as a criteria in the next HCM purchase; 41 percent indicated that their HR strategy had shifted to such Cloud support.[2]  These statistics were borne out in the views of conference attendees.   This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.   As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.   Copyright © 2015 Deloitte Development LLC. All rights reserved.   [1] Investments in Human Capital Management Systems 2014. Katherine Jones, Ph.D. Bersin by Deloitte. 2014.  [2] Ibid.

We just published the major study Deloitte Global Human Capital Trends 2015, and the results are striking. Today, driven by shifts in both work ethos and the transparency of the job market, employee retention and engagement are now the #1 problems companies face.  (3,200 respondents from over 100 countries) This is the third year we've done this study, and we looked at more than ten different trends in the research. The results show that 87% of companies now rate "retention, engagement, and culture" as an important imperative and 50% rate it "urgent." The #2 trend, the need to build a global leadership pipeline, was a close second. As you will read about in the report, companies are struggling with their culture because of a variety of factors. First, millennials now make up the largest part of the workforce, and they demand flexibility, mobility, and accelerated development like never before. Second, every company's employment brand is now "on the internet," so if you have weak management or a poor working environment, people know about it (we call this "the naked organization"). Third, companies have not kept up with their leadership development and performance management practices - so often management itself is not driving the right behaviors to make people want to stay. (For more on the whole topic of Culture, please read the article Culture: Why It's the Most Important Topic in Business Today.)  One of the biggest factors may be learning. Our research shows that the #3 priority issue is the need to revamp and improve employee learning. This is not only a problem of skills development, but also one of engagement. The research shows that companies with high performing learning environments rank in the top for employee engagement - demonstrating how important learning is to engaging and empowering people. Another major finding is that HR skills remain a challenge. 80% of companies believe HR skills are an issue and 39% rate this problem urgent. This means we, as HR professionals, owe it to our organizations and ourselves to take the time and money to develop ourselves. Rotational assignments, bringing non-HR people into the function, and training are all part of the solution. Analytics was rated a high priority, as we may expect, but the progress is slow. And companies are very focused on fixing performance management, with almost 60% already in the process of re-engineering the process.  We've been studying performance management for almost ten years now, and our research clearly shows why and how it should be simpler, more agile, and more developmental in nature. Speaking of simple, let me conclude with a few comments on that issue. Last year we talked about "the overwhelmed employee" and how important it was for companies to make life easier at work. This year we found that one of the biggest new trends it "The Simplification of Work" - something we can all relate to. More than 60% of companies believe their work environment is too complex and now is the time to strip away clutter and get more focused. As I discuss in "The De-Cluttering of HR" - simplicity does not mean being simplistic. It is a tough effort to shift your culture away from "edge cases" and helping people focus on the basics.  We in HR have much to learn in this respect! I look forward to talking about all this with you at IMPACT this year. I'm going to be talking about Bold HR - and now is definitely the time to be bold. This report, which is filled with good information and insights, tells me (and hopefully you) that the bar is being raised for all of us. Now is the time for us to take charge, innovate, and lead our organizations to be more fulfilling, engaging, and focused. I look forward to seeing many of you in April, and I hope you really enjoy reading this research!  

Are you in the market for new performance management software?  See our newly published "What Works Brief: The Guide to Performance Management Software: 2015."[1] A free synopsis of the longer study, this brief covers the main trends in the changing world of performance management and the progress that software vendors are just starting to make to support that change. In addition to the software solutions covered, we included data from our recent Bersin by Deloitte study of the buying community - you folks who are seeking to replace outdated systems. We learned that of companies purchasing new talent management software this year, 67 percent were planning to purchase performance management software, either for the first time or as a replacement for existing solutions.[2] [3] Why? There are several factors: Performance management is increasingly deemed critical in today’s organizations and the historical systems are not perceived as adequately supporting next-generation practices; The current installed systems are aging; Companies may have multiple different systems and seek to consolidate into one corporate-wide platform. Of those replacing existing software, 75 percent sought to replace a standalone performance management application with an integrated suite solution.[4] The majority of organizations we surveyed (74 percent) use one software solution for their performance management system, but respondents reported that as many as ten or more systems are used inside their organizations today. Twelve percent of the population surveyed noted that they did not have a formal performance management process at all.[5] 41 percent of respondents reported that their performance management solutions are self-developed; 38 percent are provided by a vendor (often a suite vendor, although the module may be stand-alone) and 21 percent use modules that are within their core HR systems. In 19 percent of organizations, the software in use is aging -- seven or more years old. This is especially the case with large organizations, where 29 percent of organizations with more than 25,000 employees have owned their performance management system for more than 7 years. Reliance on home-grown, self-developed solutions for performance management may well be part of the reason for the interest in procuring new applications in the near future; the lack of any technology solution, as noted by 15 percent of respondents may be another.   Coaching In, Ranking Out   Our research demonstrates that organizations with higher levels of support for coaching see stronger talent outcomes.[6] As it has become increasingly important in the management of performance overall, some applications include tips for how to enhance the effectiveness of the coaching process.  These programs provide a just-in-time approach to coaching assistance, dependent on the area on which the manager is coaching. Across the solutions studied, 21 percent provide automated coaching tools and 55 percent supported the assignment of a coach within the performance management system; 38 percent provide links to on-demand coaching information, related to the area of interest at hand. 52 percent provide workflows to track coaching and mentoring conversations and activities, an important feature in coaching management. The growth of coaching as a performance support mechanism has led to support by vendors to maintain records of managers’ one-on-one coaching sessions. These provide employees with a record of the discussions and employers with evidence these discussions occurred.  The goal of such tools enables managers to track their ongoing meetings with employees to review and track goals and development plans, and discuss a variety of other organizational or employee-specific topics. It also relates the frequency and impact the meetings are having on performance ratings, engagement scores and turnover.   This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.   As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.   Copyright © 2015 Deloitte Development LLC. All rights reserved.   [1] The Guide to Performance Management Software: 2015 --A Roadmap to Performance Management and the Solutions that Support it."  Katherine Jones, Stacia Sherman Garr, and Sally-Ann Cooke. Bersin by Deloitte. 2015. [2] Investments in Human Capital Management Systems 2014: What Technology Users Have and What They Will Buy in the Year Ahead. Katherine Jones. Bersin by Deloitte. April 2014. [3] The four application areas most often sought as an integrated via a suite rather than have as standalone solutions are recruiting, onboarding, learning and performance management. [4] Op.Cit.  Investments in Human Capital Management Systems: 2014. [5] Investments in Human Capital Management Systems 2014: What Technology Users Have and What They Will Buy in the Year Ahead. Katherine Jones. Bersin by Deloitte. April 2014. [6] Ibid.

Numbers matter. And in HR numbers are beginning to matter more and more.  The ability for HR professionals to easily access financial data has become a more pronounced need, recently. True analytics (not just "reporting") requires access to cost data such as that traditionally found only in the financial applications. The ERPS of the ‘90s provided both "personnel" and financial data, but as new SaaS HR solutions and talent management applications hit the market, often the financial data was left behind. (One exception is Workday, which added financial applications to its HRIS to answer just such questions). Without integration to financials, it is difficult for HR and staffing organizations to answer questions such as: Will it be a better financial decision to hire a salaried employee to fill a current skill gap or a shorter term contingent worker? Will it cost us more in the long term to hire a data scientist than to upskill our current HR staff on analytics and statistics? At what point will our external spend on recruiting be better spend on in-house efforts?   It is access - easy access—to financial data that can help HR answer these questions.  In this light, last week Cloud HR and talent provider Ultimate Software announced a strategic alliance with Cloud ERP provider NetSuite. Primarily targeted at companies looking for integrated ERP and HR/talent solutions, the partnership will provide NetSuite’s financials, supply chain, customer relationship management (CRM) and Ultimate Software’s payroll, HR, benefits, time and labor management, performance, compensation, and succession management. While this clearly goes beyond the need for access to financial data that HR professionals need for decision making, it can solve that requirement and help manage the entire business cycle.   Areas such as integration of point of sale information from NetSuite into HR or performance management data may be anticipated. The two vendors report dozens of joint deployments of Ultimate Software’s UltiPro and NetSuite today, integrated with solutions from Informatica.  While Informatica will continue to be marketed for integration, the two companies plan on creating and providing out-of-the-box packaged integration.   Neither company is a newcomer to Cloud  delivery of its solutions: 25 year old Ultimate Software made the move from on-premise to software-as-a-service and now has 19 million people "systems of record"  in the cloud.  NetSuite, a Cloud company since its inception in 1998 (as NetLedger) has to approximately 24,000 companies and subsidiaries using its business solutions such as  finance, sales, marketing, services, supply chain, fulfillment, ecommerce, inventory and order management, and more. NetSuite acquired TribeHR, a solution it positions for SMB companies; the Ultimate Software solution is targeted at middle market and larger organizations. Alliances are only as strong as the ongoing commitment of both partners in making them work; this alliance, however, provides both companies with solid solutions that they do not have today.  Adding the ERP - especially the financial -- component to UltiPro’s HCM solution will potentially allow HR professionals to make sounder business decisions. After all, numbers do matter.   This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright © 2015 Deloitte Development LLC. All rights reserved.        

Most organizations have a limited view of their workforces in terms of both headcount numbers and costs. While HR typically reports headcount figures, the task of calculating the cost of the workforce is often left to Finance. Unfortunately, many HR groups don’t have the expertise or credibility to report costs and therefore defer to their Finance counterparts. Headcount figures are important, no doubt, but this data alone only tells part of the story. Executives and line managers want to know how much they are spending on talent, and how different decisions will impact these costs. HR, in partnership with Finance, needs to take the initiative to calculate and report these costs. The HR leaders at ConAgra Foods did not shrink away from this challenge. Until recently, ConAgra Foods struggled to collect accurate data about its workforce. Information was spread across the organization in siloed systems and was often difficult to reconcile (sound familiar?) In a relatively short timeframe, however, ConAgra Foods’ HR team has been able to leverage technology solutions to provide both current and projected headcount as well as total workforce costs. To estimate these costs, the analytics team partnered with Finance (a key relationship for HR and analytics teams) to begin mapping all of the available data and processes. The company was using two principle systems: the HRIS, managed by HR, provided data on salary and benefits; and an ERP system, technically owned by Finance, provided cost data.  Neither system held all of the necessary costs or details for accurate planning, forecasting, and analysis.  The goal was to deliver all workforce cost data, regardless of source, to the cloud-based workforce planning system (Visier) to provide a complete picture of costs. To calculate the total cost of the workforce (TCOW), the team developed a visual taxonomy of the different data elements that contribute to this figure (see Figure 1). The four major categories include direct compensation, benefits, employer costs for labor, and workforce overhead. Each of these categories, in turn, has subcategories with specific data elements.  All of these need to be considered when calculating the total cost of workforce. Many times companies only look at payroll or compensation figures, but as this chart shows, that is only part of the total cost. With all of the data in one place, ConAgra Foods’ HR and Finance teams are now able to see the impact of spending at a minute level and understand what impact its workforce costs have on its financial plan. They can also run different scenarios, for example, modeling workforce costs between two different locations, or modeling the cost of entering new markets versus continuing operations as is. In the past, this would have been a highly manual, time-consuming, and error-prone task. If your HR organization is not able to do these types of analyses, it should work to get there. Increasingly business leaders are calling on HR to step up its game in using analytics to make better workforce decisions. Cost is a key component of these decisions. So if you don't have a strong relationship with your CFO, start building that relationship now. Figure 1: Total Cost of Workforce Taxonomy        

One of the things I enjoy the most about being an analyst is the opportunity to speak with Bersin members about the Talent Acquisition issues they’re facing. Last spring, we started getting a lot of questions about campus recruiting programs, e.g., How should we structure our campus recruiting program? Do you have any frameworks, metrics, or other guidance for developing a campus recruiting strategy? What metrics should we use to measure program success?   In response to this member demand, I’m excited to announce that we’re publishing a new research report today, Developing an Effective Campus Recruiting Program, that answers these questions and more.   Why should organizations invest the time and resources in a campus recruiting program? Campus hires can provide organizations with a consistent pool of workers in today’s talent-constrained global business world, with 73 percent of large organizations hiring interns to fill full-time positions.[1] Campus programs boast high retention rates with 69 percent of campus hires remaining with an organization after five years.[2] This is good news, given that employee turnover can be costly.   Campus recruiting can deliver additional strategic benefits by helping organizations manage talent gaps and elevate their profiles as potential employers on campuses. It also can bring fresh and diverse perspectives to the organization on topics ranging from technology to contemporary workplace policies.   To help organizations assess the current state of their campus recruiting programs and identify opportunities to develop a strategic approach, the report outlines six critical steps: ·        Create a compelling business case. Present convincing business reasons for increased investment and commitment to campus programs, such as how they can tap rich talent pools, reduce turnover, and help build leadership pipelines. Presenting a clear vision for your recruiting efforts is critical to creating an effective program. ·        Identify stakeholders and decision-makers. A large number of individuals need to champion, support and ultimately manage program development and implementation. Executive buy-in and support are likely to contribute to the overall success of a campus program. ·        Develop strategy and tactics. A campus recruiting program may satisfy a variety of needs, from traditional internships and cooperative programs to entry-level positions and even experienced hiring. Organizations should align their campus recruiting initiatives with their overall talent acquisition strategy and develop a work plan. ·        Determine a budget. Some campus recruiting programs fail to launch due to lack of financial support from leadership. Set a realistic budget and look for ways to optimize efforts by using niche job posting sites, hosting virtual job fairs, and partnering with local universities. ·        Align resources. As the need to hire more skilled entry-level staff and interns in competitive fields grows, organizations should look to individuals from the business, former interns, and college alumni networks to help align campus strategies and program execution. ·        Ensure sustainability. Delivering a sustainable program requires anticipating emerging business needs and continued identification of the successes and shortcomings of a current campus recruiting program. Assessing ROI and the value of the program will be the truest measure of a program’s success.   Interested in learning more? Download the complimentary WhatWorks® Brief and join Denise Moulton and me for an online webinar, Going Back to School: Developing a More Effective Campus Recruiting Program, on February 24, 2015 2:00 p.m. ET.   As always, feel free to add a comment below, connect with me on Twitter @RAEricksonPhD, or by email at rerickson@deloitte.com                 This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.   [1] Source: "Infographic: Internships Survey and 2014 Internship Trends," Internships.com, January 23, 2014, http://www.internships.com/eyeoftheintern/news/idc-news/internships-survey-2014-internship-trends/ . [2] Source: "2014 Internship & Co-op Survey," National Association of Colleges and Employers, April 2014, http://www.naceweb.org/uploadedFiles/Content/static-assets/downloads/executive-summary/2014-internship-co-op-survey-executive-summary.pdf .  

HR organizations got a boost in investment in 2014, with budgets up an average of 4% over the prior year. Much of the extra money went to increased headcount, with HR staffing up 3%, on average. Another big area of investment was HR technology, with one-fifth organizations saying they increased their spending on HR systems during 2014.  So how are these investments paying off? Unfortunately, for most organizations, not very well. In Deloitte’s newly-released study, just 36% of organizations rated their HR team's performance as either "good" or "excellent." And these ratings are not significantly better than in past years (see Figure 1.)   So for many organizations, the additional investments in HR technology, staffing, programs, and other intiatives have not paid off. But some HR groups are different, and HR leaders would do well to learn some lessons from these organizations. Our research describes a growth model in the maturity of HR capabilities. Most HR organizations start out as "compliance-driven" functions, focused on primary services such as payroll and benefits and meeting legal requirements. Over time, HR organizations need to expand their scope of initiatives and business alignment. At the highest stage of maturity, the "business-integrated" HR organization helps drive the business through workforce strategies and people data. These business-integrated HR functions do spend more than their less mature counterparts - $4,434 per employee, on average, as compared with just $2,112 among compliance-driven HR functions. But the difference is, their efforts are paying off. As evidence, business-integrated HR organizations have lower involuntary turnover compared to compliance-driven HR organizations (8% vs. 11%)—and each percentage point drop in turnover can be worth millions to a large organization. In addition, companies with business-integrated HR organizations have higher promotion rates, creating solid talent pipelines that enable them to take a long-term view of roles and future needs. So when HR organizations look at their budgets, they need to ensure their spending is helping to enhance their effectiveness. The Deloitte study recommends the following to help organizations get started: Design the HR organization to deliver solutions: For many businesses, it is time to redesign HR with a focus on consulting and service delivery, not just efficiency of administration. HR business partners must become trusted business advisors with the requisite skills to analyze, consult, and resolve critical business issues. Create business-integrated "networks of excellence." High-impact HR teams have different staffing models, relying more in specialists embedded in the business.  Recruitment, development, employee relations, and coaching are all strategic programs that should be centrally coordinated but locally implemented. When specialists in these areas live and work close to the business, their impact is greatly enhanced. Make HR a talent and leadership magnet: How do people get HR jobs in your company? If they accidentally move into HR, this may be holding you back. Create rigorous assessments for top HR staff and rotate high performers from the business into HR to create a magnet for strong leaders. Invest in HR development and skills as if the business depended on it:  Invest in professional development to make sure your HR team is constantly sharpening its own saw and developing the necessary skills to survive. Analytical skills are becoming a must for HR professionals, but many lack the ability to interpret data and communicate findings based on analytics.  Other capabilities to focus on include business acumen, consulting skills, and organizational design and change management. For more information, see Human Capital Trends 2015 and HR Factbook 2015.

I attended the SAPinsider HR conference in Las Vegas this last week - and the energy of the audience was contagious. Let me share nuggets of what I gleaned from attendees: If your production environment is on-premise, you will not be planning any rip and replace strategies in the near term; while aspects of an ERP may in fact be more cumbersome than desired, that working business infrastructure is not up for replacement. If, on the other hand, your talent management applications (learning or hiring management, for example) are on-premise, you are not only possibly ripe for replacement, but very likely seeking a Cloud-based solution rather than on-premise software. If you are part of the 44 percent[1] who are planning to replace an HRIS system this year, you are seriously investigating a Cloud solution. Payroll is generally scary.  If users have a working solution today that covers their global payroll needs, they are unlikely to replace it. Two scenarios, however, lead to payroll replacement:  companies that are replacing an older on-premise system that had embedded payroll, and those simply contemplating a change of payroll providers; these seem "up for grabs," as the saying goes. What does all this mean?  First, the understanding of what software-as-a-service (AKA Cloud computing) has grown exponentially. Today’s HRIS/HRIT professionals in general exhibit solid understanding of the concept, the advantages and sometimes-radical changes that may emanate from cloud computing.  Second, the two fears about Cloud computing -"Is my data safe?  Can I keep employee data private?" are oh-so yesterday.  Today’s buyers are in the main comfortable with both the security of HR and talent management in the Cloud, and the ability to keep it private via multi-tenant solutions. The SAP HR Future SAP CEO Mike Ettling stated in his keynote that the company would support its on-premise HCM solution until 2025, giving its 14,000+ users ten years to consider a move to the Cloud-based Employee Central, the product that SAP is putting its longer-term Core HR development Euros into.   Today’s HR and HRIT professionals at the conference seem to be very serious in their commitment to the concept of talent management. They are also savvy buyers—and looking at the SuccessFactors’ Cloud solutions in many cases as a replacement for on-premise learning, as one prominent example. Will the Cloud be a solution for everyone? Absolutely not. There are reasons why an organization might not be bounding to the Cloud. For example: The company currently has extra capacity in its data center and an internal IT staff which is not utilized 100 percent. The organization is a highly complex setting with rigid compliance requirements. It is an environment that require extensive customization to meet its business needs. It is an extremely high-secure environment (for example, federal security or top-secret defense sites). The company is located in as region with a highly unreliable communications infrastructure. Our research shows that 52 percent of buyers planned on using Cloud-delivery as a criteria in the next HCM purchase; 41 percent indicated that their HR strategy had shifted to such Cloud support.[2]  These statistics were borne out in the views of conference attendees.   This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.   As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.   Copyright © 2015 Deloitte Development LLC. All rights reserved.   [1] Investments in Human Capital Management Systems 2014. Katherine Jones, Ph.D. Bersin by Deloitte. 2014.  [2] Ibid.

We just published the major study Deloitte Global Human Capital Trends 2015, and the results are striking. Today, driven by shifts in both work ethos and the transparency of the job market, employee retention and engagement are now the #1 problems companies face.  (3,200 respondents from over 100 countries) This is the third year we've done this study, and we looked at more than ten different trends in the research. The results show that 87% of companies now rate "retention, engagement, and culture" as an important imperative and 50% rate it "urgent." The #2 trend, the need to build a global leadership pipeline, was a close second. As you will read about in the report, companies are struggling with their culture because of a variety of factors. First, millennials now make up the largest part of the workforce, and they demand flexibility, mobility, and accelerated development like never before. Second, every company's employment brand is now "on the internet," so if you have weak management or a poor working environment, people know about it (we call this "the naked organization"). Third, companies have not kept up with their leadership development and performance management practices - so often management itself is not driving the right behaviors to make people want to stay. (For more on the whole topic of Culture, please read the article Culture: Why It's the Most Important Topic in Business Today.)  One of the biggest factors may be learning. Our research shows that the #3 priority issue is the need to revamp and improve employee learning. This is not only a problem of skills development, but also one of engagement. The research shows that companies with high performing learning environments rank in the top for employee engagement - demonstrating how important learning is to engaging and empowering people. Another major finding is that HR skills remain a challenge. 80% of companies believe HR skills are an issue and 39% rate this problem urgent. This means we, as HR professionals, owe it to our organizations and ourselves to take the time and money to develop ourselves. Rotational assignments, bringing non-HR people into the function, and training are all part of the solution. Analytics was rated a high priority, as we may expect, but the progress is slow. And companies are very focused on fixing performance management, with almost 60% already in the process of re-engineering the process.  We've been studying performance management for almost ten years now, and our research clearly shows why and how it should be simpler, more agile, and more developmental in nature. Speaking of simple, let me conclude with a few comments on that issue. Last year we talked about "the overwhelmed employee" and how important it was for companies to make life easier at work. This year we found that one of the biggest new trends it "The Simplification of Work" - something we can all relate to. More than 60% of companies believe their work environment is too complex and now is the time to strip away clutter and get more focused. As I discuss in "The De-Cluttering of HR" - simplicity does not mean being simplistic. It is a tough effort to shift your culture away from "edge cases" and helping people focus on the basics.  We in HR have much to learn in this respect! I look forward to talking about all this with you at IMPACT this year. I'm going to be talking about Bold HR - and now is definitely the time to be bold. This report, which is filled with good information and insights, tells me (and hopefully you) that the bar is being raised for all of us. Now is the time for us to take charge, innovate, and lead our organizations to be more fulfilling, engaging, and focused. I look forward to seeing many of you in April, and I hope you really enjoy reading this research!