By Somaya El Sherbini, co-founder and managing partner at RightFoot
With global economies facing challenges for the remainder of 2020, some businesses will look at creating new revenue streams, some will try to reinvent themselves introducing new product lines or different ways to attract and retain their customers, other businesses will look at ways to really understand what their operational state is, how they can work differently, to ensure the biggest return on their investments are achieved.
The key to addressing these different business challenges lies in an organisation’s ability to understand the current mode of operation of its different functions, so that they are able to come up with a well-thought through future state, that would stand the test and succeed.
An example, the savvy marketers who will look at the data to understand the performance of each product, the underlying themes influencing growth and market share rely on data and analytics to be able to make more informed decisions. In the new world of work, what if these business objectives were not only clearly tied to the teams and individuals working in the organisation but would shift as and when the data insights support this? What if businesses were able to identify their inability to drive market share growth because their teams needed to build new types of skills? What if they understood that these skills are so scarce in the market and invested sooner, rather than later in re-skilling and up-skilling their people?
The digitisation of human resources (HR) processes and creating the connections between the main business functions is how the world will need to transform. The business of HR has always been about people with relatively high subjectivity driving decision making. In the new world of work, businesses will need to weave into their business strategies data insights and predictive analytics.
HR analytics is a mixture of methodology and software that works on the statistical model in order to deliver work-related data, which enables the company’s decision-makers to optimise and enhance human resource management. This will result in the biggest disruption and will set companies up for fast-paced success, or will keep them locked in the old ways of execution.
Global technology companies and some of the top e-commerce and retailers of the world have started to look at data insights to help them make better hiring and retention decisions. On the global level, the adoption has been slow, however leading the world is the Asia Pacific where the use of some type of HR analytics has reached 70 per cent.
It is no surprise that according to Bersin Research, only 2 per cent of HR organisations have a mature people analytics capability. Despite the fact that businesses globally have adopted HR solutions and the size of this technology market has grown by 29 per cent from 2018-2019 according to PwC. The adoption of technology solutions continues to grow, however the abilities of using such solutions for data insights is still lagging.
New rising HR solution providers are tackling every point in the employee journey to be able to connect and monitor their impact on business performance. Talent acquisition has had the lion’s share of focus over the years, this will continue to grow and dominate the focus areas, however, there are a lot of close runners up. We strongly believe that by 2025, companies who have not considered and challenged the value of their investments in this space will be confronted with their inability to keep up with their financial targets.
We categorise the principles of decision making of software as a service (SaaS) HR Systems to be those that: Smart HR solutions continuously on the rise will be the disruptors in the coming few years.
- - Focus on the user experience (the employee – the manager – the HR professional)
- - Require little, to no customisation
- - Are cost effective
In summary, business leaders need to think deeply about how they are able to get the biggest return on their investments, they need to think beyond the independent processes of HR and consider the broader sense of how their People Agenda influences their businesses in the broader scale. They need to consider the fact that the digitally embracive culture and mindset is something that they might not have, and that they need to be taken into account to ensure adoption and bigger, more impactful return.