Let’s face it, enterprises are always looking to optimize costs and timelines while playing catch-up with the Big Hairy Audacious Goals of growth and expansion. And in the quest to continuously achieving business growth, HR often doesn’t get a seat at the high table that it so deserves. Luckily, the top brass is starting to sit-up and take notice of the pressing need to better care for their most valuable asset – human capital. Enter: Human Capital Management (HCM) technology – the real enabler in improving workforce management, acquisition, development and optimization.
HCM technology is the secret sauce that can help your enterprise gain that elusive competitive advantage over others.
By allowing enterprises to optimize human resources management, HR processes and workforce data, HCM technology can deliver greater productivity, better employee experience and cost benefits. And the best part is that you don’t need an extremely high budget or all-star team to achieve this edge.
Especially in the current era of technological disruption, companies (small, mid-sized and large) need to embrace HCM software. It is common knowledge now that a good HMC product pays for itself through benefits such as better employee engagement, resource allocation, targeted hiring, reduced turnover; and easy access to insights on the workforce.
And by redundant removing layers of the bureaucratic admin workflow, this gamut of cloud-based HCM technologies stand to free-up your HR team’s time to take on more strategic tasks that benefit your business. It also will deliver better insights into the ‘human’ side of the business so that the team can make more informed decisions.
This is how Oracle Human Capital Management Cloud helped Fujitsu achieve a digital makeover of their HR function. By establishing a common process for employees across 37 countries, on a single platform, Fujitsu reported reduced process cost and complexity and improved business agility and employee productivity.
HCM technologies really do have a business impact. That's made clear in this piece on Centuri's use of @SuccessFactors to turn the HR department into a data-driven strategic business driver. @NextCenturi https://t.co/OXaAUWJcfC
— Kate (@kmcneel) March 6, 2019
So let’s dig deep to find out just how such software can support HCM capabilities, critical for organizations, in the journey towards smarter people management:
Most people wonder, “Why is it that my company’s HR team always looks so busy?”
Unfortunately, more often than not, the answer tends to be: “for all the wrong reasons.”
Mundane admin processes such as managing employee history and records, payroll, benefits, leave, and attendance tracking consumes over 75% of an HR professional’s time, according to Edward E Lawler III and John Boudreau in a Forbes article. This factory-line like implementation and administration of HR policies and practices leaves them with very little time to spend on more strategic initiatives. Thus, such support tasks end up becoming productivity killers, obstructing HR personnel from delivering the true value that they are capable of.
Automating these mechanical tasks using HCM technology solutions (by providers such as SAP, Workday and Oracle) helps HR transition from spending hours on spreadsheets or paper towards a highly configurable electronic workflow.
Also, the self-service option in HCM technology solutions replace the time-consuming and error-prone manual data entry processes such as filling of timesheets and tax filing forms, reviewing benefits options, changing personal details etc.
Recruiting the ‘right’ talent is one of the top challenges faced by HR personnel on a daily basis, especially in the face of cut-throat competition from other employers.
Yet another very real struggle is the process of manually shortlisting CVs from hundreds of applications. According to Glassdoor, on average, there are 250 applicants for any given corporate job posting. And most companies, at any one point in time, have scores of openings for various roles. So, just imagine how sorting through thousands of applications daily could suck HR executives dry of bandwidth, taking their focus away from optimizing hiring processes to identifying and attracting the best of the lot.
HCM technology tools such as Application Tracking Software (ATS) come to the rescue by providing a better candidate experience and saving your team the tedious task of rifling through wrong CVs. It targets the right candidate, basis your criteria, creates custom workflows (post requirements, schedule interviews, generate offers and onboard candidates seamlessly) and also communicates with internal candidates to deliver on your requirement.
The intelligent job analyzer by SAP, a Leader in the Magic Quadrant 2018, even leverages machine learning to eliminate unconscious bias in the candidate selection. Thus, the future is now all about using artificial intelligence (AI) to help the ATS smartly forecast what that the recruiter is looking for, automatically post requirements, and scan emails and calendars to schedule interviews.
Such efforts help improve candidate conversion rates and secure the right employee for the role.
Disruptive recruitment technologies are enabling organizations to attract, nurture and engage candidates through social media, web sourcing, SEO, candidate relationship management tools and hiring analytics. At the same time, it can automatically create talent pipelines for a new job by retargeting candidates and ranking prospects from a repository of past candidates.
No wonder talent professionals are starting to embrace AI-powered recruitment tools for tasks like sourcing (58%), screening (56%) and nurturing (55%) candidates.
Organizations need to constantly upskill talent to bridge employee skill gaps. Based on a survey conducted by Training Magazine, 38% of companies expect to purchase a Learning management system (LMS) – owing to their flexible and cost-effective nature. Amongst other things, LMS allows HR teams to easily upload existing learning and training content (including videos) on the cloud, customize courses and make it accessible to employees across devices and platforms.
At the same time, succession management tools (another arrow in the ‘HCM quiver’) help organizations create a pipeline of talent that ensures leadership continuity. Such modules enable the HR teams to quickly and easily devise employee career development plans – by offering personalized role recommendations that align with individual skills and interests and intelligent mentoring and feedback to encourage continuous employee development. It also proactively computes employee achievements that link to specific development goals, so as to assess their readiness for new roles.
Agricultural equipment company, AGCO Corporation, claims that adopting SAP® SuccessFactor’s® succession and development solution helped them reduce the time invested in succession planning by roughly 90%. Thus, the software freed up time to “focus on recruitment development, managing succession pipeline, and building an environment where people can grow with AGCO”, by making redundant the manual acts of inputting and analyzing spreadsheet data.
The cost of losing an employee tends to be quite high for any company. Think money spent on interviews, new hire training, loss of productivity and so on. In fact, according to research by Center for American Progress, the average cost of turnover ranges from 16% (for low paying roles) to 213% (for an executive position) of the annual salary of the employee. By that logic, replacing a retail employee who earns $10 per hour would cost $3,328, while finding a substitute for a CEO would set the company back by $213,000. Such significant business expense calls for an urgent need to reduce unnecessary attrition.
Since 80%+ new employees make their decision to stay or leave within six months of being hired, it is important to keep them suitably engaged starting with a streamlined onboarding process.
SAP SuccessFactors Onboarding portal does this by helping companies personalize communication and information dissemination with new hires from day one. It allows employees to fit into their new role quicker and also connect easily with peers and managers. Additionally, it encourages open communication and community building through interactive company news feeds or social platforms. Think of these as internal online notice boards where employees and leaders can share updates, promotions, and announcements that make everyone feel connected to the organization.
The next step, in plugging employee exit rates, is syncing the employees’ work and personal life. Apart from team-building activities, parties, and townhall sessions, some organizations even employ solutions that track wellness activities and integrate with wearables. It also matches employees with volunteer programs, mentors, and friendly competitions featuring digital leaderboards, incentives and ranking. A software solution that does all this and more is Oracle Work Life Solutions Cloud.
Together all these technologies can, to some degree, automate the process of creating a happy, loyal and healthy workforce.
You may unleash every engagement tactic in the book, but the biggest employee loyalty motivator tends to be fair, transparent and accurate performance appraisals. Yet, it is also something that most employees and managers dread undertaking, owing to the drudgery of paperwork! Thus, poorly managed appraisal processes tend to push attrition rates up quite dramatically. Ergo, going digital is the answer.
A lot can happen in a year, so performance appraisal software empowers employees and managers to keep track of every accomplishment for a more accurate representation of individual performance. Such an intuitive solution is especially relevant with the growing popularity of continuous performance reviews. With all these facts collated and easily accessible to all relevant parties, HCM technology solutions enable honest evaluations of the employee and teams.
Fitted with automated reminders, these apps ensure that each step of the appraisal happens on time. It also collects real-time employee feedback and creates employee performance reports that identify just how to help individuals execute their role better.
Employees also get to create, monitor, and collaborate on goals with their managers and other relevant stakeholders, thus facilitating an efficient on-demand feedback channel.
Focused assessments, such as these, also help the organization figure out whether targets have been met, on the basis of which individual career paths can be charted out for the employees. Via real-time analytics, such solutions can also track progress towards attaining performance-led rewards.
HR departments also use benefits administration software, to streamline the creation, implementation and management of employee benefits packages (including disability, dental, medical and life insurance).
A case study about UltiPro Benefits Prime, implemented at One Hope United (a private human service organization), talks about how the software makes benefits selection simple and easy to navigate. Offering a smooth user-experience akin to ‘shopping on an ecommerce portal’ – complete with costs and detailed plan attributes – the HCM solution was much appreciated by the organization.
“The major reduction in employee questions has lifted a significant administrative burden off our local support staff—who are not benefits specialists and have a wide range of responsibilities,” said Tom Bentley, Manager of HRIS and Benefits One Hope United in the case study. “In addition, the employee satisfaction that comes from an effortless benefits enrollment process is an important retention tool. With UltiPro Benefits Prime, we are driving business value across One Hope United.”
Therefore, undoubtedly, HCM has a significant role to play in every step of managing employees, from payroll to performance management, compensation management, recruitment and user onboarding.
Today, as demand increases for businesses to perform complex and labour-intensive tasks, here are the top 6 ways in which HCM software ends up adding value:
Owing to all such strategic, yet pocket-friendly features, Oracle claims that its cloud solution helped professional services firm, Genpact, reduce redundancies (of on-premise systems and tools) by 60%. The organization started with setting up employee and manager self-service in 2015, and in the next 12 years implemented the complete HR cloud suite.
Once you are sold on the concept of HCM technology and its many merits, is when work really begins.
From picking the best option from the large pool of HCM technology providers to integrating it with existing systems and training personnel to use it; there is much to be prepared for.
So, here is a handy guide for HCM technology implementation success:
There is no doubt that HCM technology is becoming a mainstay of every company’s growth strategy. It is up to companies to leverage HCM technology to not just optimize their human resource management but also to turn HR into a value center.