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Transforming the HR function through technology

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Suits The C-Suite

With the fast-paced development of technology, the fourth industrial revolution is reshaping nearly every aspect of business. We often read about how technology and disruption are transforming critical business functions, and one such function that needs to keep up is human resources or HR. More and more, the HR function needs to explore how new solutions, trends and technologies (such as automation) can have a direct impact on productivity.

According to proprietary research by CareerBuilder, a global human capital solutions company, HR manager respondents who do not fully automate say that they lose 14 hours a week from manually completing tasks. HR managers are optimistic about the impact of automation and artificial intelligence (AI) on HR strategies. This is also corroborated in a survey by CareerBuilder, where 72% of respondents said that they “expect that some roles within talent acquisition and human capital management will become completely automated in the next 10 years.” HR automation is, indeed, on the rise with the top three automated functions: employee messaging (57%), employee benefits (53%), and payroll (47%). It is only a matter of time before automation drastically impacts on HR operations and becomes a catalyst of employee engagement.

USING TECHNOLOGY TO IMPROVE THE PERFORMANCE OF HR FUNCTIONS
Let us consider some examples of how aligning with current technological trends can help successfully initiate and implement HR strategies. Take recruitment and talent management for instance. With the increased interest among today’s workforce to shift towards mobile technology and social media, organizations are transitioning from posting on job search websites into social media.

Data shows that 79% of job seekers are likely to use job search portals, while talent acquisition leaders also consider online professional networks as an effective branding tool. HR managers are also increasingly aligning with this trend, where 72% of recruiters use LinkedIn to hire employees and 55% of organizations strategically use Facebook and Twitter for various HR purposes.

Aside from the impact of social media, organizations are also leveraging data analytics and cloud-based solutions to deliver improved HR services and gain better insights on trends affecting their employees. Small-scale organizations are beginning to adopt cloud technology for certain functions such as talent management, human resource management systems, workforce management, and payroll.

Organizations are also investing resources for social media tools and HR technology integration. In fact, two in five organizations say that their HR technology spending is on the rise. However, investment in HR technology is not always top of mind for some business leaders because of their intangible impact on the organization’s bottom line and employee productivity. Despite the digital disruptions transforming business today, many organizations have yet to adopt technologies for their core business or for support functions that include HR.




ROBOTICS AND THE FUTURE OF THE WORKFORCE
Other technologies expected to have a huge impact on HR are robotics and AI. With the advent of automated solutions that can handle clerical or repetitive work, there is need to plan ahead, look into possible job displacement, and manage employee transitions to new roles. The onset of the machine economy is set to displace parts of the workforce, with two-thirds of all jobs susceptible to being rendered obsolete by automation. This, however, varies depending on the rate of adoption of technology in specific countries.

According to research and advisory firm Forrester, automation could lead to a net job loss of 9.8 million or 7% jobs in the US alone by 2027. As a result, a new wave of jobs will develop and require a completely new skillset (e.g., data analyst, information security specialist). Employees consider this to be one of the biggest risks of automation, but are also optimistic about their perceived benefits in their everyday work. In fact, 9 out 10 workers seek to automate mundane tasks at the workplace.

Organizations must also be able to strike a balance for complementary working systems between technology and people. The key to achieving this balance is not to displace human workers by utilizing RPA, but to make them more effective in performing more strategic activities. There is also a need to build analytic capabilities into HR that will in turn support talent strategies in boosting organizational performance and productivity.

THE GIG ECONOMY AND REMOTE WORKING ARE RESHAPING THE WORKING WORLD
As traditional business processes evolve, we are seeing an increase in the freelance or gig economy and remote working, which have become acceptable practices. According to Upwork’s Future Workforce Report, nearly half of respondent companies utilize flexible workers. Surprisingly, 90% of hiring managers say that they are more satisfied with the skills of freelancers than their recent full-time workers. Companies are more likely to hire freelancers based on quality over cost. The US, the Netherlands and the UK lead the pack in embracing the gig economy, as these countries have a high share of self-employed individuals. A favorable policy environment was one factor perceived to have fueled the growth of the gig economy in these countries.

Remote work in the Philippines has recently been institutionalized with the passing of the New Telecommuting Act (Republic Act No. 11165) in early 2019. The law recognizes telecommuting, which allows employees to work in alternative locations via enabling technologies (e.g., internet, cellular phone, computer). Many multinational organizations and business process outsourcing companies have long adopted telecommuting due to the need to communicate regularly and deliver work across time zones.

Employers and employees both directly benefit from telecommuting arrangements by gaining more flexibility in office space utilization and lessening time and money spent traveling to and from the workplace. As technology advances further, telecommuting could become the new norm. Already, some organizations are shifting corporate spending from office space and utilities to subsidizing connectivity expenses of employees who work offsite. Ultimately, this will necessitate the review and updating of company people polices and local labor laws to make telecommuting more aligned with the future of work.

Situations such as road congestion and a shortage of or high costs for work space, and insufficient facilities (e.g. parking) mean that working from home can reduce costs for companies. Focus then can be given to managing employee discipline and maximizing productivity remotely, to ensure quality output that is comparable to the work produced in a traditional workplace.

Given the rapid adoption of technology, automation and new workforce behaviors, HR functions are pressed to catch up and leverage these new trends to adequately meet the needs of tomorrow’s global workforce, and to maintain their competitiveness through effective, strategic and technology-enabled HR processes.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the authors and do not necessarily represent the views of SGV & Co.

 

Aldwin Aris C. Gregorio is an Associate Principal of SGV & Co.