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HOUSTON AND LONDON (March 17, 2008) — EquaTerra and Human Resource Executive® magazine today announced they have completed a comprehensive study that assesses what “strategic HR” actually means to HR executives, and explores how talent management and alternative service delivery models such as outsourcing can enable strategic HR.  The study surveyed approximately 450 HR leaders, primarily based in North America, 29 percent of whom were vice presidents of HR and 53 percent of whom were HR directors or managers.  The two organizations jointly conducted a similar study in 2005.

Key study focuses and findings include:

HR as a Strategic Corporate Asset
Fifty eight percent of respondents felt their organization’s executive management viewed HR as a strategic asset, and just 18 percent indicated it was viewed as a cost center.  Although these are relatively positive numbers, the levels have changed little from those found in responses to the 2005 study, and depict that 40 percent of HR groups believe they are not viewed as strategic.  But because the answer to what makes HR strategic depends on whose opinion is being asked, EquaTerra encourages HR leaders to define what strategic means not only in the context of their organization’s current situation but also in the eyes of key stakeholders and decision makers within the overall corporation.  

Outsourcing’s Role in Making HR More Strategic
The 2008 edition of this study found that the use of alternative HR service delivery models, like shared service or outsourcing, was not viewed as especially important in enabling HR transformation.  Deploying shared services scored a 3.1 on a 1-5 scale (where1 was not at all important and 5 was very important to making HR more strategic).  Outsourcing supporting HR information technology applications and systems received a 2.8, and HR business process outsourcing scored a 2.3.   It is important to note, however, that the use of alternative service delivery models like shared services and outsourcing was more common and more highly regarded among respondents from larger organizations and those in the commercial sector than those in the public sector.  It is also important to note that while enthusiasm for alternative delivery models was somewhat muted, HR organizations have typically exhausted many other change mechanisms (e.g., investing more in IT, reorganizing), which means deploying these models is potentially the logical next step in the transformation progression.

Total Talent Management
Becoming a leader in “total talent management”, e.g., recruiting, performance, learning, succession planning, was deemed the most critical thing HR organizations could do to become more strategic, cited by 72 percent of respondents.  Total talent management was also most frequently cited (79 percent of respondents) as the HR activity that contributed the most to making HR strategic.

Said Stan Lepeak, EquaTerra’s Managing Director of Research, “Improving total talent management will be key for organizations and their HR groups over the next five years, as competitive differentiation and success typically hinges on talent capabilities.  One variable that shows potential in helping HR groups improve their talent management capability is the use of alternative service delivery models.

One sub-set of study results  – published in the March 17, 2008 edition of Human Resource Executive® magazine – is available by going to:  www.hrexecutive.com, or sending an e-mail to:  research@equaterra.com.  An EquaTerra podcast focusing on Outsourcing’s Role in Making HR More Strategic can be accessed by going to:  http://equaterra.com/KR/podcasts/outsourcings-role-in-making-hr-strategic.mp3.  Full study results will be examined in detail during an EquaTerra webcast to be held at 11am eastern on Wednesday, April 23, 2008.  For further information on the webcast, please contact:  Allison.Norman@equaterra.com.

EquaTerra sourcing advisors help clients achieve sustainable value in their IT and business processes. Our advisors average more than 20 years of industry experience and have supported over 2000 transformation and outsourcing projects across more than 60 countries. Supporting clients throughout the Americas, Europe, Middle East, Africa and Asia Pacific, we have deep functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes. EquaTerra helps clients achieve significant cost savings and process improvement with internal transformation, shared services and outsourcing solutions.  For more information, please contact Lee Ann Moore at +1 713.669.9292; leeann.moore@equaterra.com; www.equaterra.com.

Human Resource Executive® was established in 1987 and continues today as the premier publication focused on strategic issues in HR. Written primarily for vice presidents and directors of human resources, the magazine provides these key decision-makers with news, profiles of HR visionaries and success stories of human resource innovators. Stories cover all areas of human resource management, including personnel, benefits, training and development, HR information systems, relocation, retirement planning, workplace security, and health care.   More than 75,000 HR decision-makers currently receive the publication, which is published 16 times a year.