HR solutions in the recent years have been focused on aligning HR initiatives with corporate goals and standardised initiatives across regions. The increasing trend of industry towards a strategy-focused HR function has been steadily paving the way for the growth of HR outsourcing services. Interestingly, a transformation of HR operations shifts the focus from a traditionally reactive and administrative function to one that is tightly connected to the business. The effect of this strategy is significant in making it possible for businesses to respond to market and human capital changes more rapidly. On a strategic level however, experts say, there is a need for tools in areas such as total rewards strategy and employee communications. As Raghavendra Singh, sales manager, Buck Consultant observes: “Movement towards access to external expertise, lowering of operational expenses, reduction in IT capex and focus on core competencies will decide the direction of dynamic organisations in the ensuing years.” The key, he stresses, lies in retaining client relationships through effective and value added work.
Hot Market Trend
The market is seeing rapid changes and growth in Information Technology, especially e-mail and web-based technology (intranet/internet) enabled HR software and systems. These provide web-based e-HR software that caters for employee self service (ESS), enabling employees to view their profile, change information, training requirements, leave details, e-pay slip and other HR information. Beyond that, there are e-portal services for online staff leave and claims application records, manager self service (MSS) tools to help managers to do approval for leave and claim application via e-mail, e-recruitment, e-appraisal, e-compensation planning and information on policies and procedures. In addition, e-training, e-attendance, e-job costing, etc are all readily available to assist HR professionals. All HR needs to do is to gain more IT and web knowledge to embrace the changes which will assist the company’s goal and strategies, notes Charles Law, director, Times Software.
“Growing globalisation and outsourcing needs shape the changes to how the company runs the business. Outsourcing has become popular because companies are finding that external vendors can provide more efficient and cost-effective HR services than in-house departments, through technology and economies of scale. It will increasingly challenge the HR profession to offer creative human capital solutions that can drive business success,” he shares.
Consequently, the market is seeing more system vendors and service providers entering or re-entering Southeast Asia. “The hot market is getting hotter. Southeast Asia is the key regional headquarter hub for many global and regional players initially leveraging the Asia workforce for expense management, but now also leveraging the Asia market for revenue growth,” says Sharon Tan, marketing executive, Creative Software. Furthermore, she says, businesses which did major Y2K upgrades at the turn of the century would need to replace legacy or out-of-date systems today.
The challenges for HR
However, it is easier said than done. Experts warn that the challenges faced by the HR organisation would be talent management, employee retention, mobile workforce planning and high level HR strategy. “The challenges for HR faces are skills levels, recruitment and talent retention of staff, performance management, training and development, data security issues, compensation and benefits management, successor planning and human resource management as a whole,” says Law. To cope, re-training and re-learning exercise planning must be implement within the company, he advises, to re-train all staff with the new IT skills and technologies to cope with changes. Implementation of computerised HR solutions should assist companies to deal with the challenges mentioned above. However, Law is quick to point out that the key question for most companies is always the ownership of the HR solutions, and whether or not to outsource to third party to manage tedious process of HR functions.
“The cost of ownership for HR solutions and data confidentiality plus security of company’s human capital information is the major concern for companies to make the right decision whether to buy the HR solution or to lease or outsource out to third party,” he argues.
Singh, however, feels that to overcome these challenges, HRO should not only target cost reduction but also focus on increasing business value. “HRO should develop more effective centres of excellence that provide better policy and programs and proactive advice to the business. HRO should help the HR business partner (or generalist) staff to focus more resources on the crucial change and talent issues that drive competitive success of the business,” he states.
Talking about his own organisation’s standpoint, Singh explains, “At Buck ACS, we believe that HRO should be a component integrated within a larger HR strategy that is closely tied to the overall business direction. While everyone respects the value of cost reduction and efficient HR administration, we encourage organisations to aim even higher to realise the full potential of HRO as a catalyst for transformation and broader business value.”
Solutions for HR
It seems there’s an HR module available for virtually any HR process, whether as part of an integrated package or a standalone, says Tan. Singh elaborates that today’s HR technology offers knowledge-based solutions, providing employees with access to frequently asked HR questions, customised benefits information and employee-specific data. “These applications are delivering dramatic results for organisations, supporting employees with information and services to make effective work and life decisions and helping to achieve strategically-focused higher performance,” he says.
With advances in HR technology, HR staffs are no longer required to serve as information provider, gatekeeper or data entry clerk as has traditionally been the case. The new service delivery combines the reorganisation of HR activities in an outsourced environment with web-based direct access to personalised information and transactions for employees, managers and HR professionals. The use of direct access or self-service capabilities is a key factor in the redistribution of activities performed by HR. Transactional activities are performed under a tiered service delivery model in which technology provides the first level of support to HR’s customers.
Trends in 2007
The trend in 2007 continues moving towards IT and web-based solutions, says Law, with the latest new computer hardware, software operating systems and much advanced equipment. “The interface of software and human communications will not just be limited to computer or notebook. There will be more advanced devices that allow us to communicate easily via intranet and internet or wireless devices,” he predicts.
Singh agrees, adding, “The current trend of transforming transactional and employment services will move towards the automation of professional and advisory services. As a result of these recently available technology capabilities, an organisation can be equipped to have immediate and accurate knowledge of local policies, procedures, employee history and special arrangements, thus enabling a centralised function to provide customised service rather than ‘one-size-fits-all’ service.”
“We do expect a bigger interest in enhancing HR's role within the company by investing in the appropriates HR technologies to enable HR to meet the above challenges as companies face stiffer competition in hiring and retaining the best talents for growth in the region,” says Sam Tay, principal consultant, Intercorp Solutions. He adds, “HR departments want to be focused on their core HR functions, they should ideally be a partner to help other functional departments within their organisation in managing, improving on and measuring their personnel behaviour and performance instead of spending a bulk of their time on paper work and needless administration. They just need to deploy the right technologies to help them achieve that objective to enable them to shed their old "Cost Centre" image to that of a "Revenue Centre" that not just saves the organisation money but by spending more time on their core functions, they are actually able to help the organisation to increase their bottom line through increased morale and productivity.
But to achieve this, experts warn that the mindset of HR, staff and management must change to accept the development of new HR solutions that use IT and e-commerce capabilities. More training and staff development should be put in place in company planning to get the staff ready for such changes and future challenges. As Law sums it up, “The development of IT and HR solutions are to assist you and all staff in all aspects as a strategic partner for your company. The ease and speed with which management can gain access to the costing and human capital information could assist them to make a sound decision that would impact the growth and bottom line of the company.”