Boosting competitive advantage through HR
HR Magazine met up with Ashley Clarke, Chief Operating Officer, FlexSystem to get his take on why HR needs to face its fears of the new digital era to help make the transition from administrative to strategic partner.
Clarke pointed out the disparity between HR departments that exists in today’s marketplace. He asserted that the HR department is well-established in larger organisations, with on-going investment and rigorous process enhancement. In contrast, however HR has often been left in the dark among smaller and medium-sized organisations. Clarke explained, “In the past, the detailed HR function has typically fallen under the remit of the most senior financial executive but this is now changing as it must.” Against the backdrop of changes to recent legislation such as the Minimum Wage Ordinance, and the problems associated with the lack of resources resulting from the ensuing global economic turmoil there is a continued need for HR to do more work with fewer employees. As a consequence Clarke noted, “HR is rapidly becoming more strategic than ever before.”
Organisational change
According to Clarke, ten years ago, business managers and accountants were struggling with the basics when running regional operations. Putting a precise number on regional headcount on any given date was difficult because this had to take into account recent resignations and positions which were ‘open’ and involved speaking with a lot of line managers for updates.
Legislative changes, the rapid uptake of mobile technologies and the increasing speed of office automation have all played their part in facilitating and driving organisational change. Legislative changes have driven organisations to consider how to operate more efficiently, whilst mobile technologies have created a more comfortable and flexible working platform from which staff can access information, all facilitated by the ever increasing speed of office automation which in itself is now facilitating cross-application reporting for more meaningful HR reporting.
Clarke asserted, “The next ten years will see even more change and this change is going to be two-fold. Firstly, the HR department is going to have to skill up especially in assertive inter-personal skills and, secondly, management and operational reporting is going to have more HR focus than ever before in order to extract more value.”
HR touch point
As HR moves away from what it was and still sometimes is perceived to be today, an administrative function with little value add, towards its additional identity of being a strategic driver with better representation on the Board, changes will need to take place. Clarke contends that in larger organisations where HR has been a strategic partner for much longer, this representation is already prominent, but that in the mid-sized companies which constitutes a lot of Hong Kong this representation has not yet been truly developed. Clarke asserted, “As companies move to extract greater value out of their existing human capital assets, then effectively they are going to be looking at many more reports and KPIs which have an HR content.”
Pinpointing issues
Clarke explained that in management meetings, it has traditionally been quite difficult to pinpoint where key issues originate from before they become real issues. Difficulties arise because to do so HR and management need to find answers to a lot of questions but the devil is in the detail:
- Can differences of performance and associated costs be explained across geographies?
- Who is burning out and at risk? Show me all consultants that are working flat out who have not taken any annual leave or have excessive overtime.
- What positions are unfilled after 60 days?
- For consulting companies; is the Project X profit KPI's in planned ranges.
- Show me proposed pay rises by gender within department (gender ratios).
- Which staff have a specific qualification or skills to help with a project
- Do we have succession plans for all key roles?
Clarke said that HR should also spend time trying to understand attrition and use reporting analytics to continually identify staff potentially at risk. As this pro-active talent management takes hold companies should become stronger by being able, for example, to identify successful characteristics in star performers that can be looked for in new candidates and also can help managers who perhaps have not completed all pay rise or pay reduction or appraisal discussions to complete these tasks.
Exploding reports
Analytics and cross-application reporting have become integral components of modern HR, especially the ability to take financial data and map it on top of employee data. Clarke said, “The ability to explode your reports with an HR component is very powerful.” To this end, FlexSystem has developed an individualised HR reporting system that is capable to consolidate cross-regional HR information. It runs on PC, iPad and mobile platforms, which allows organisations to generate summary reports and drill down to detailed employee information with just a few clicks as well as process-based workflow tasks.
Compliance
Clarke acknowledged that some HR personnel may have healthy concerns over the privacy and risks involved in having regional employees’ detailed information on a system, in particular a cloud-based one. Sceptics frequently voice concern over the implications of overzealous individuals who may be tempted to misuse the personal information available to them via accessing employees’ data. To allay these fears, Clarke stressed the importance of ensuring that the HR team pro-actively maintain strict controls on access to data by specifying exactly who from which department can access which data from which offices and levels within the organisation.
Timesaver
Assuming security fears can be allayed, the use of cloud technology in staff management can bring huge benefits to an organisation and allows employees to be constantly connected with HR and each other which in turn facilitates greater collaborative working practices. Cloud-based HR systems also allow employees to utilise employee self-service automation such as when applying for a business trip, sick leave application or medical claims. HR would able to focus on staff development and management rather than handling many pieces of paper.
On the people management front, when looking to build teams, systems containing qualifications and experience make it much simpler to bring the right people together. Clarke also stated “Training is not a one-stop shop, it’s progressive. Some organisations are already allowing online booking, management and delivery of training courses. Using software to perform this function can help organisations to gather data and identify which skill sets are lacking.” He added, “In terms of accepting and embracing the potential of the future of HR functionality Gen-Y is predicted to celebrate the changes. We’re expecting a greater level of collaboration.”
Metrics into money
Clarke advised that analytics should not only be employed for financial data, but for combined employee metrics as well. He argued that companies that maximise the collection and interpretation of data on its talent pool can best plan for future needs, “Using technology to enable the HR department to be proactive is a very powerful addition to the bottom line and for enhancing shareholder value.”
Paul Arkwright
Publisher
