EquaTerra Finds HR Organizations Scrambling to Refine Roles to Sync with Turbulent Economy and Shifting Corporate Strategy EquaTerra Finds HR Organizations Scrambling to Refine Roles to Sync with Turbulent Economy and Shifting Corporate Strategy Houston (January 13, 2009) – Economic turbulence is placing new stress on human resource organizations as they scramble to refine their roles to sync up with the market downturn and the resulting shifts in corporate strategy, according to EquaTerra, a global business advisory and sourcing firm. In a recent survey*, EquaTerra queried top HR professionals in virtually every major industry to determine what impact the changing competitive landscape is having on the HR function and where HR leaders should refocus their efforts to deliver the most value to their organizations. In its two-part report of findings, EquaTerra found HR leaders are struggling to balance the growing need to deliver strategic services to support critical business objectives with the need to deliver core HR services more efficiently and cost effectively. More than half those polled indicated their organizations had significantly cut back on hiring and had undertaken or were planning lay-offs not anticipated last year, generating serious employee morale problems and associated performance and conduct issues. Study findings also highlight the specific ways HR organizations themselves are being impacted by deteriorating economic conditions. Many survey participants report they are being forced to curtail or eliminate investments in HR IT applications and systems along with employee training, education and recruiting. On a more positive note, the study indicates globalization and recessionary pressures may be accelerating the evolution of the HR function as a strategic asset. A new breed of HR leader appears to be emerging. These leaders have a more formal business/finance education and are better trained and qualified to address tough business issues and support key competitive initiatives. This is exactly what is needed in the global economy, according to EquaTerra research. “HR leaders need to thoroughly understand the way their business works and makes money along with customer dynamics and current market conditions to fully engage in developing and implementing corporate strategy,” said Stan Lepeak, managing director of global research for EquaTerra. Given shrinking budgets and competing priorities, where should HR organizations focus their energies to deliver maximum benefit to their organizations? More than 70 percent of those polled cited human capital management, which includes recruiting top-notch candidates, structuring effective pay-for-performance models, ensuring knowledge transfer through succession planning and developing next-generation leaders through corporate learning programs. Other key findings include: Progress has been made toward making HR more strategic, yet 78 percent of those polled felt that corporate executives and business unit leaders still need to revise their overall mindset regarding the role, duties and importance of the HR function. There was overwhelming consensus (79 percent) among respondents that failure to make HR more strategic was a fundamental threat to their organization and that achieving operational excellence was a foundational element to becoming more strategic. Fortunately, survey respondents (88 percent) also felt playing a more strategic role within the organization had more to do with innovative thinking and executive support than bigger budgets. Outsourcing is viewed as an enabler in the transition to becoming a more strategic HR function. Current outsourcing efforts focus on the standardization and automation of transactional processes to achieve greater efficiency at lower cost. Greater automation is seen as a way to free HR managers from routine activities, allowing them to focus on more strategic initiatives. The challenges of the current economic environment coupled with changing demographics and increasing globalization will drive business to reassess the HR function, according to Lepeak. “A growing body of research indicates senior business executives within large companies understand enhancing HR administrative efficiency is a necessary first step toward refining the role HR leaders play in supporting overall business strategy.” About This Survey* EquaTerra surveyed over 250 HR decisions makers representing all major industry groups, including the public sector, during the first two weeks of October 2008. Over 60 percent of those polled represented an organization in North America, 20 percent were from organizations with operations in Europe/Middle East/Africa and 18 percent had operations in the Asia Pacific region. The survey sample included HR representatives of companies of various sizes – those with less than 3,000 employees (39 percent), those with between 3,000-15,000 employees (31 percent) and those companies with more than 15,000 employees (30 percent). Please download a copy of the survey or contact Stan Lepeak for more information. About EquaTerra 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 more than 2,000 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; www.equaterra.com. Media Contact: Kim Messerschmitt Director of Marketing North America 1.972.987.1686 kim.messerschmitt@equaterra.com