Amid a clear mandate of complete re-structuring for business verticals, Prakash Balakrishnan, group HR director and HR strategic committee head, TH Group, analyses the steps in the path to successful HR transformation.
Q. You’ve had a wide portfolio of HR experience across geographies, first in India, then Qatar, and now Vietnam. What makes the HR role in Vietnam so distinct?
I spent more than 15 years in the armed forces in India and other corporations across India, Middle East, North Africa, and South East Asia; handling large and diversified business verticals.
Moving to Vietnam was a great challenge to accept. From a professional point of view, Vietnam is an emerging market with a lot of local players moving outward and other MNCs moving in. The business landscape as well as the HR vertical is rapidly changing, beyond just staffing and personnel management.
The HR role is fast moving towards a business partner role. The domain is fast evolving to catch up with the advanced countries. In recent times, with some major events like being a member of TPP and more FDIs coming in, the HR challenges in Vietnam have become multi-fold.
Q. Having been in the HR space since 2002, after you exited the Indian Air Force, what were the big differences and similarities in the HR and the national defence role?
The defense services have a very rigid vertical hierarchical system. Civil and private entities are much more complex, competitive in nature and sometimes, the changes and growth are exponential. Changes – be in terms of practices, technology, etc. happen much faster.
But I think the most differentiating factor is the career planning. The armed forces have very clear, long-term career planning since the staff remains with the system for a span of 15 to 20 years; whereas in other corporations, people move their career quite often.
Top of the priority list were arresting the high employee turnover rate (36%), improvement in employee productivity, and overall organisational capability.
Further, we do not encounter competitive products and services in defense. Meanwhile, civil entities are very aggressive in their strategies for products and services, customer service, quality standards, and on top of everything, maintaining their brand value. The scope of key facets of HR (talent management, performance, retention, etc.) becomes their priority.
Q. When you joined TH Group in August 2013, what was your key mandate?
I had a clear mandate of complete re-structuring for three major business verticals; which was extended to six; including two acquisitions. Preparation for listing in Singapore Exchange and Dow Jones Sustainability Index were additional responsibilities. Top of the priority list were arresting the high employee turnover rate (36%), improvement in employee productivity and performance, and overall organisational capability.
TH Group has six major businesses in Vietnam, spread across five geographical areas with field and operational staff. The accuracy of personal data and payroll had been a major challenge when you operate in such difficult conditions. When I formed TH Group as a shared service centre, my first priority was to centralise payroll and digitisation of personal data and attendance system. It was a great success to bring six companies and 6,000 employees under one system and most importantly, reporting.
I had set up an action plan to bring down the turnover rate from 36% in 2014 to 18% in 2016. We did a lot of research to make TH an employer of choice and I am proud to say that we won the Asia Best Employer Brand Awards in 2016. Of course, we drastically changed all our people practices, and made ourselves competitive in terms of total rewards.
Q. One of the recent focuses for TH Group is on leveraging technology for the HR function, where you are currently involved in an implementation of SAP SuccessFactors. Tell us about the journey behind your HR tech transformation, and what it entailed?
TH Group is in a fast growth and expansion mode with more products and services coming in, and more industries added to our business portfolio (pharma, sugar, education, healthcare, etc.). In 2016, we expanded our operations to the US, Russia and in 2017 to China. To manage such complex business expansions, you need a great deal of technological support.
Keeping the cost factor into consideration, we chose a hybrid version of SAP on-premise and SuccessFactors.
In 2014, I started looking at and deliberating on an HR technology platform to support our requirements. Finally, SAP SuccessFactors was chosen; it is a great on-cloud HCM solution. Keeping the cost factor into consideration, we chose a hybrid version of SAP on-premise and SuccessFactors.
It is a real honour for me and TH to be the first to implement SAP SuccessFactors in Vietnam and one of the few in Southeast Asia. It was a risk, but I managed to get the project implementation fast-tracked to six months, with a very young team who had never worked on any ERP packages.
Q. Since the adoption of technology, what best practices and innovations have you undertaken to reimagine business as well as workforce experiences?
After going live, I have given more empowerment through decentralisation. Our performance management has improved and become much easier to monitor. Line managers have been trained to keep a watch on the departmental goals and objectives through dashboards. Currently, we are trying to install a kiosk, where employees can access their personal information, salary details, etc.
Q. What considerations did you have in mind in the selection of a technology vendor?
Since we had SAP in place for other business areas, we chose SAP for HR as well, with SuccessFactors being one of the best on-cloud solutions in the market. One key factor is that SAP keeps updating the system, which is made available to customers at zero cost.
Q. What do you envision as the future of work – any next steps pertaining to your organisation’s digital HR transformation journey?
TH Group plans to implement HANA in 2018. From the HR point of view, we will upgrade our system to SAP Employee Central, in order to make it an end-to-end process, including approvals and HR analytics.