In 2016 we conducted our third HR Realities survey in partnership with HRN, the organisers of HR Tech World. One of the interesting and unexpected results of the survey was how it highlighted the challenges of being a “decentralised” HR function – especially in relation to their experience of HR Technology. Here are some of the headlines from the HR Realities Reports we released earlier this year.


As the data clearly shows, Federated HR seems to have a clear advantage in maximising its supplier experience.


Decentralised HR organisations find it harder to make HR tech suppliers understand what they want


Decentralised HR operations are five times more likely to report rarely or never having their needs understood by suppliers than federated HR operations.


Half of decentrailsed HR organisations report their HR Tech supplier doesn't understand their needs

Perhaps because federated HR operations are more likely to document and manage consensus around platforms, they are the most effective at making suppliers understand their needs. Typically, governance is an important aspect of managing federated solutions – and articulating shared approaches and elements of localisation could account for their ability to communicate with suppliers. Equally, in centralised HR operations there tends to be a strong process view of what HR people and systems need to do, which again is typically documented and enforced by the central HR operation.


Decentralised HR organisations receive great service less frequently from HR Tech providers than federated or centralised HR operations


How HR operations are organised seems to influence how customers perceive their quality of service. Federated and centralised HR organisations experience a higher quality of customer service than those that are decentralised.


Typically federated and centralised HR are 2 times as likley to report receiving great service

Decentralised HR operations find it hardest to achieve value for money from HR Tech suppliers


Whilst federated and centralised HR operations both report very similar levels of satisfaction with value for money, it’s decentralised organisations that struggle most significantly to get value for money from their suppliers. 63% of decentralised HR organisations rarely or never feel they receive value for money!


 63% of decentrailsed HR operations say they rarely or never receive value for money

Does that mean that I should not have a decentralised HR operation?


Whilst the data seems to indicate decentralised HR organisations usually find it harder to maximise their relationship with HR Tech suppliers, that isn’t a reason to simply junk a decentralised model. Some are clearly not suffering. But, if you want to run a decentralised HR operation effectively, you do need to think about how to mitigate the risks of independence.


You might need to think about communication with your HR peers (within your organisation) and adopt some layers of governance to make sure the flexibility and responsiveness of localised working isn’t more of a weakness than it is an asset. You might need to confederate your approaches especially where HR Tech relationships are concerned – because the data seems to show that standing alone is a riskier business than working together.


What should I do next?


We are currently conducting our latest HR Realities Survey for 2017/18 and you can get involved by completing the survey and contributing to the results.


To give you a sense of this year’s flavour, our survey 2017/18 has a big focus on Employee Engagement and the Employee Value Proposition, as well as some long term historic themes about investment in HR and HR’s impact.


We would love to have your input.