A study by Alight Solutions in Asia Pacific (APAC) revealed today (28 January) that companies in the region are largely unhappy with their HR technology platforms.
Titled The State of HR transformation Study 2019-19, the study examined more than 670 organisations across sectors in APAC, representing a total of 6.1 million employees. It aimed to determine these organisations’ approaches to identifying and implementing low-effort, high-impact HR solutions.
Based on responses, the following key data was found:
Retaining the ‘human’ aspect of HR is a priority
Nearly 66% of organisations studied said HR has direct control of resources, either through direct reporting or through a matrix structure with a line reporting to regional or global HR.
Higher staffing proportion for HR business partners (HRBP) and for Centre of Excellence (CoE) roles even at large organisations indicates low maturity of HR operations/shared services. This thus results in a lower level of perceived effectiveness of both HRBP and CoE roles.
At the same time, HR capability gaps are restraining the effectiveness of HR, and was highlighted as a priority to be addressed. The study also found large organisations face this challenge more acutely due to greater advancement in their HR transformation journey.
Moving forward, field HR and generalists will play a vital role as the custodians of culture and employee relations.
The speed of automation adoption is increasing
According to the study, the adoption of automation in HR in APAC is “growing at an explosive pace”. In fact, nearly 80% of respondents are evaluating automation use cases and building scale for future investments in the area.
Further, it was found that mature organisations are three times more likely to be in the advanced stages of robotics and cognitive adoption.
Organisations are less satisfied with current HR technology
Only 45% of organisations examined are either highly or ‘somewhat satisfied’ with their current HR technology, down 6% from 2016-17.
To address this, more than 60% of companies are actively planning and evaluating fresh technology investments over the next 12 to 24 months.
Factors including analytics engines, suite comprehensiveness and user experience now account for nearly 50% of the evaluation process.
According to the study results, there is also a noticeable increase in the satisfaction gaps between ‘in-house’ payroll models and the ‘outsourced’ payroll model. The need for consistent delivery, reporting and compliance is driving the shift towards an outsourced model.
HR technology and services are key to future readiness
The study also revealed organisations with a clear HR technology strategy and HR service delivery model are better poised to drive agility in the HR function. This is due to the following reasons:
A customer and outcome-centric HR service delivery model allows for collaboration across HR roles. Companies with this model are five times more confident in programme design and execution, and twice as productive.
Further, nearly two-thirds of respondents have a well-defined or a fully defined HR service delivery model, up from the previous year.
Currently, India and Thailand are two countries where close to 80% of the respondents have established HR service delivery models.
A digital mindset enables HR leaders to use technology platforms to deliver a consumer-grade experience across employee segments.
Analytics is vital in driving agility
According to the study, close to two-thirds of respondents plan on implementing more robust people analytics in the next 12 to 24 months. These will focus primarily on solving issues around performance, capability, productivity and retention.
Based on trends found in the study, there still remains a gap between analytics and governance, in enabling success of the HR transformation journey. Further, capability shortage and the lack of consolidated data are seen as big roadblocks that need to be addressed.
Thus, it was found that the HR function will need to build deeper talent science and data analytics capabilities so their people analytics initiatives can succeed. HR professionals also need to shift to data interpretation and consultation to help businesses make effective human capital decisions.
The following infographic also highlights the key anchors of a future-ready HR function: