Recovery from recession
Many HR functions have become adept at ‘making do’ with existing technology over recent years. But times are changing in the HR world. With the US emerging from recession and even Europe on a surer footing than at this time last year, companies are tentatively planning for growth. Recognising that IT can be a powerful engine to drive this resurgence, many have stopped treading water and have started to ask what investment in HR technology can do to drive business performance.
Talent management is an area that companies have long strived to improve, as they have become more aware of the changing dynamic in the global workforce. This comes with a growing appreciation that to benefit from an international workforce and global talent pool, HR needs systems to manage new levels of diversity and workforce demands. The rewards can be great, with improved identification of high-potential employees, more effective deployment of existing talent and greater engagement and productivity across the board.
The future of talent
Research conducted by Oxford Economics and Towers Watson into the future of the global talent market shows that a fundamental shift in supply, demand, surplus and deficit will take place over the next 10 years. A race between technology and education is emerging as technology fuels demand for highly skilled workers, while growing economies increase the supply of talent through greater access to education. As employers require more complex skills, talent shortages are projected in many mature markets – including the US, UK, Germany, Japan, South Korea and Italy. Meanwhile, eight of the top 10 countries with the largest talent surpluses will be in developing countries, led by India, Indonesia, Colombia and South Africa.
The most dramatic jump in employment demand will be in emerging Asia, where the need for new employees will rise by 22%. Other emerging markets that will see above-average growth in required staff are Latin America (13%), the Middle East and Africa (13%) and Eastern Europe (11%). Employment demand in Western Europe, by contrast, is projected to grow a rather modest 3.5% by 2021. This dynamic change in global economics and evolving technology is pushing companies to rethink how they address their shifting talent needs. They must now come up with new and creative ways in which to access and manage talent across the globe.
Companies are recognising that to continue to grow and compete, they must take a comprehensive approach to talent management and reward. New technology is an increasingly important part of talent and reward management programmes and further research shows organisations are beginning to realise the significant competitive advantage that a fully integrated talent management system can deliver.
This trend is reflected in our annual HR Service Delivery (HRSD) Report, which shows stable or increased spending levels for technology in a climate of overall spending cuts. More agile solutions, with the flexibility to fold all HR processes into one system, are driving a move towards technology adoption.
Despite the obvious pressure on budgets in Europe, many companies are deciding that investment in supporting infrastructure and technology needs to happen if HR is to keep pace with the changing way in which its services are delivered. Fundamental shifts are taking place in the way software is implemented and used – exploiting these opportunities requires a different approach. State-of-the-art software offers enormous potential to streamline processes, improve efficiency, enhance customer responsiveness, foster innovation and support changing business strategies.
Among the trends that hold the key to tomorrow’s successful organisations, Software as a Service (SaaS), social media and data accessibility are leading the way. Harnessed effectively, they have the potential to align HR activities closely with strategic goals. Also, by improving efficiency and streamlining processes they can continue to cut costs and even be self-funding, an important distinction in a still conservative budgetary environment.
SaaS offers organisations easy access to their data and the ability to configure systems in a way that better matches business requirements. It provides speed, configurability and functionality at potentially much lower cost than in-house systems, because you only pay for what you need. It is usually priced per employee. This enables cost-effective growth and is ideal if you are recruiting fast.
It is no secret that social media tools are blurring the lines between the workplace and private lives of many employees. Companies that are still fighting against this tide are in danger of looking outdated and undesirable to the new generation of workplace talent.
Moreover, organisations are discovering the benefits that social media can have in attracting, retaining, managing and developing their talent. HR departments are already using the web to distribute information and inform staff of new policies, allowing the workforce to comment on and influence policy development.
Former generations of database software made it difficult to slice and dice multiple variables in the way that you might want to for matching individuals to jobs. But today’s SaaS and cloud-based technologies, which are structured around ‘data objects’ or ‘web objects’, enable you to search for and analyse complex combinations of characteristics at a few key strokes. This helps you get the answers you need to manage performance, rewards, succession plans and career maps.
Technologies that improve the management and development of talent are becoming more crucial in connecting business needs to human capital. They make it possible to spot the links between business performance and employee profiles and provide the wherewithal to adjust human capital programmes that produce business results. In a shifting global talent market, creating a clearer picture of talent, performance and reward throughout the organisation has never been more important.