Several years ago, when I joined the workforce as a fresh graduate, I applied to the Administration Manager of a small newspaper as a reporter. A medium-sized organisation, it had probably 100 staff. The Administration Manager who recruited me was responsible not only for hiring, but for other functions like accounts and mail distribution.
I joined another larger newspaper firm after a short while. It was the Personnel Manager who recruited me. By then, ‘people’, as a category, had become sufficiently important to have its own department. Several years after that, the ‘personnel’ office evolved from recruitment and salary management to Human Resources (HR), a term used to describe the management and development of employees in an organisation, based on the concept of employee motivation, organisational behaviour and selection assessments. Now often led by a senior management executive, HR has expanded into a larger unit. Experienced HR managers now oversee different specialties like recruitment, employee engagement and retention, compensation, training and career planning.
Redefining Human Resource Management
In this expanded remit, HR is more than just hiring people to fill vacancies. It has become the backbone of an organisation. A HR manager’s role today has evolved rapidly from administration function to key business service. The manager plays a strategic role in keeping employees engaged and motivated. Responsibilities include compensation and benefits, recruiting and hiring, onboarding, employee engagement, performance management, staff training, and organisation development and culture.
There is also a growing awareness among organisations and management that it is the people – described as talent – who actually create the right strategies and are responsible for rolling out the relevant ideas, plans, and processes to make the business successful.
HR management has taken on greater urgency as organisations recognise that happy employees make happy customers. When employees have a positive attitude toward their work and are fully engaged, that positive attitude naturally spills over into their customer relationships. Many studies have found that happy employees consistently strive to deliver high-quality service – and this results in increased customer satisfaction and loyalty.
In the past, it was acceptable to offer salary raises to keep employees. This is no longer the case as today’s employees have new wants. They are looking for work-life balance; they are ambitiously demanding technology tools to help them become more efficient and reach greater heights; and they want their views to be considered in their employers’ decision-making process.
Employee retention is complicated and complex. As a first step, employers need to recognise that people are the most important asset in a business. They must keep employees satisfied and engaged in their jobs, and try to create an environment where everyone enjoys working for the organisation.
Success Factors in Employee Retention
There is a new way of thinking about the workforce. HR previously perceived people as risks, whereas HR executives now view people as productive assets. People are a benefit and not a liability to organisations. Re-defining the way employers think of employees and taking away HR’s administrative burden to focus on employees’ entire careers are two key trends that have advanced the HR profession.
Aside from the trends surrounding the evolving workforce, organisations have tried for decades to find a good way to assess employees. Performance assessment increasingly encompasses employee satisfaction, engagement and experience. If these three metrics are combined and addressed correctly, employee retention will not be a problem.
Employee satisfaction is the hardest to nail. There will be employees who are just satisfied with their level of work, but from the organisation’s perspective, that level of performance may not be enough.
Employee engagement is about the extent to which employees feel passionate about their jobs, are committed to their organisations, and put discretionary effort into their work. Engaged employees are supported by their supervisors, often given stretch goals, and probably mentored by senior leaders. By adequately addressing the employee engagement metric, organisations can strengthen the quality of performance and deliver more wholistic performance assessments.
Employee experience is about a worker’s observations and perceptions about his or her employment. It is an intangible, like describing what it is like to work in an organisation, including the gossip. A good guide to encouraging employee retention then, would be to collectively assess the three metrics. Together, they promote a simple concept: a satisfied and engaged employee who enjoys the experience of working in an organisation is likely to be happy to go to work. A happy worker is also a more productive employee and therefore content to stay with the company for a longer period of time.
Human Resource Management vs. Human Capital Management
This is a concept that goes beyond HR management. Human capital management is about comprehensive HR practices for recruiting, managing, developing and optimising the human resources of an organisation. It is an approach that views employees as assets that can be invested in and managed to maximise business value.
Increasingly, new workforce trends and laws add more complexity to recruitment, retention, legislative compliance and employee management. HR managers must be alert regarding changing trends and laws, and act proactively rather than reactively. These are aspects of human capital management that must be handled well to ensure business success.
There are key workplace trends that make human capital management an indispensable feature. One trend is the aging workforce. New generations have different workstyles and needs. Millennials, for example, expect work-life balance. Another trend is the gig economy where temporary jobs are undertaken not by full-time employees, but by contractors and freelancers. This impacts, among other things, the management of worker status and benefits, tax and employment regulations and contracts. And then there are intangible assets. Previously, an organisation’s business assets include inventory, real estate or investments. Today, social media has turned good leadership and employee advocacy into potential assets for brand and reputation building – all in the quest for competitive advantage.
Over and above these functions, organisations, by way of operations, are also accumulating an enormous amount of personnel data like employee wants and recruitment trends, all of which can be used to better understand HR performance and make improved decisions. Human capital management lets HR manage and analyse all this big data in a faster and more efficient manner, so that businesses can ultimately prosper.
HR Tools to Aid Human Capital Management
Insights gleaned from the aggregation and analysis of personnel data will help cost savings and uncover opportunities and patterns to improve efficiency and profitability. Workplace technology tools can be used to identify key areas of improvement to create a positive employee experience – i.e. an easier working life. This could involve the streamlining of work and processes to become more efficient and similar to the experiences they have come to expect as consumers.
Initial workplace tools were used to get work done. These were licensed on-premise software used to keep employee records, payroll, and benefits. But the industry has evolved and expanded significantly due to automation and the adoption of cloud technology.
Self-service is the name of the game today. As employees become more willing to use self-service models, HR tasks like payroll, annual leave and benefits take up less administrative time. Employees can track these details on their own personalised dashboards. This then frees up HR professionals, letting them focus on recruitment, employee performance and other essential tasks.
Learning portals can also aid employees in the bid to upgrade their expertise at their own time and pace. Cloud-based learning management systems that use artificial intelligence (AI) can offer personalised courses, help employees collaborate better or engage in ‘mobile education’ anytime and anywhere.
HR tools and technology are also reinventing the human resources sector. More businesses are leveraging AI, data analytics and other technologies to improve recruitment and employee management. For example, AI will enable a smarter, faster and more responsive HR function from recruitment to training. It will complement HR managers, making the process of wading through resumes and video more efficient and effective.
The Right Partner for the Integration of HR Tools and an ERP System
A data-based human resource management system is more efficient and effective for companies embarking on their digital transformation journeys. SAP SuccessFactors, for example, can be leveraged by all employees including HR. It is a cloud-based, end-to-end platform focused on managing an individual as he or she progresses from a recruit to eventually become a senior manager. Since SAP is the parent company, the additional advantage of SuccessFactors is that it can pull data from other applications like an SAP Enterprise Resource Planning (ERP) system, and other business functions like finance and inventory management. By integrating with SAP, organisations can streamline and automate a major portion of core HR processes.
Organisations in Singapore and across the Asia-Pacific region can work with SAP Partners to identify HR and human capital management objectives and outcomes before they use SuccessFactors. SAP Partners are selected to help guide organisations through the digital transformation journey and help them understand that technological adoption is an opportunity that can be leveraged to create new revenue and business models.
In closing, human capital management today is complex and complicated, but also imperative for achieving business success. There is no “one solution fits all” as individuals perceive value differently. To get this right, employers must take the time to identify their objectives and needs, as well as the wants and desires of their employees, and then find the best HR tools and technology to satisfy both sides in the most optimal fashion.
