“World-class” human resource departments are more efficient andeffective than their peers -- they may spend more on technology, but their overall costs are smallerin large part because they require fewer staff, and they tend tomake less errors, according to The Hackett Group’s report,“Raising the World-Class Bar in HR Through DigitalTransformation.”

Those HR organizations in the top quartile in effectiveness andefficiency, deemed “world-class” by Hackett,spend 25 percent less than the typical HR department listed in thereport’s peer group, and the best require 30 percent fewer staff. Atypical company with $10 billion in revenue could potentially saveas much as $15 million annual if they were to attain “world-classperformance.”

Related: 6 new solutions for benefits brokers and HRmanagers

It’s not that the world-class group is cheap – it just allocatesits spending differently, particularly for technology, according tothe report. Many are anteing up more dollars for “the new wave” ofHR cloud-based applications and services ranging from core humancapital management systems to individual applications such astalent acquisition, learning, and talent analytics andreporting.

Moreover, while the best organizations may spend more onoutsourcing, they do so selectively, such as for the functions ofcompensation and benefits administration.

“This allows them to tap into greater expertise and leverageboth the capacity and capability of vendors,” the authors write.“This helps increase agility by providing resources that can scaleto demand, freeing HR staff to focus on anticipating and respondingto critical business needs.”

These efficiencies are against a backdrop ofcontinued flat-to-decreasing headcounts and budgets in HR,according to the report. Overall, the number of HR FTEs is expectedto decline by 1.4 percent, slightly more than last year’s actual1.3 percent reduction. Budgets, however, are expected to fall by anaverage of 1.6 percent – significantly more than the 0.3 percentactual decrease in 2016.

“This suggests that, while most HR organizations face an ongoingresource squeeze, some are successfully making the case for greatersupport of their performance improvement and capability developmentefforts,” the authors write.

World-class HR organizations are also more effective, as theirerror rates for different transactions range from two to five timeslower than those of the peer group – which can translate into acost savings into the millions of dollars.

“The bottom line: achieving world-class HR yields a tremendouscost and productivity advantage,” the authors write.

The HR function has been impacted by technology more so than anyother employment factor, as HR leaders and managers areincreasingly focusing on more strategic efforts “involving thepeople side of the profession,” according to HR Dive.

“Increasingly, HR is turning to automation and emergingartificial intelligence to build essential people managementtraits such as trust and engagement within their systems,” HR Divewrites.

To aid in recruitment, skills and knowledge assessments, more HRdepartments are employing data analytics, particularly, “peopleanalytics.”

“In essence: Technology is swinging the other way on thependulum, and is now more capable of returning the human factor toemployment processes,” HR Dive writes.