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At Indonesian interior design and furnishing firm PT Gema Graha Sarana Tbk (Gema), automating recruitment and employee onboarding processes has slashed the average time it takes to fill vacant positions by 20%, while employee requisition requests are now approved within a day instead of three days, as was the case previously.
These improvements, resulting from the use of a cloud-based human capital management (HCM) service, have lowered the firm’s staff turnover rate, enabling it to attract and retain talent in a highly competitive job market.
Across the Asia-Pacific (APAC) region, more organisations such as Gema are turning to HCM software to improve efficiencies in attracting and managing talent, and to reduce costs.
According to IDC, the HCM market in APAC, excluding Japan, is expected to grow at a compound annual growth rate of 19.4% by 2023, with China, Australia and India contributing almost 70% to overall revenues.
Starting from 2016, there has also been strong uptake of HCM software in Singapore, Taiwan and Thailand, says Srinivas Sameer Javvadi, market analyst for IDC’s APAC software research group based in Bangalore, India.
The availability of cloud-based HCM offerings is one of the key growth drivers of the HCM market, says Javvadi, noting that these services offer a good user experience, along with analytics and application programming interface (API) capabilities.
In addition, organisations are looking to move away from legacy HR systems that have been customised for years and are costly to maintain and upgrade. Instead, they are looking to adopt technologies that require less custom code and offer more configuration options, he adds.
From a business perspective, the increasing competition for talent, skills shortages and availability of social recruiting tools are making it easier than ever for workers to change jobs.
These challenges are driving HR leaders to align their HCM, data and talent strategies to create great employee experiences that best serve their customers and business, says Shaakun Khanna, head of HCM applications at Oracle APAC.
“Research from Oracle and the WHU-Otto Beisheim School of Management has shown that many organisations have invested in the right technologies, but are lacking the culture, skills or behaviours necessary to truly reap their benefits,” says Khanna.
“Adaptability and agility are extremely important for organisations if they want to get ahead of the competition and offer market-leading propositions. Being adaptable is also a big factor in any company attracting and retaining employees with the skills to drive them forward.”
The buying process and key considerations
HCM applications provide a broad range of functionalities throughout the employee lifecycle – from talent management to payroll and expenses.
When evaluating HCM software, organisations should draw up an in-depth map of their current systems and, from there, establish what data is being received, how the data flows and where this data sits.
Oracle’s Khanna says this starts from the very foundation of the software – the database. Any modules deployed must sit on the same platform and share common data, integrating well with each other and allowing for a seamless employee experience. This will reduce administration inefficiencies associated with overlapping systems.
Jill Popelka, SAP SuccessFactors
It is also crucial to have a complete solution that scales as the business grows. The chosen HCM software, says Khanna, should be able to handle the needs of a growing organisation that is changing its organisational structure and reporting requirements.
“Ultimately, organisations need an HCM solution that is able to provide visibility to one source of truth that is updated in real time,” he adds.
Rob Wells, president of Workday Asia, says investing in a new HCM platform is a delicate process that affects people in a very human way.
“It’s usually a once-in-a-lifetime opportunity, so they will naturally want to get it right,” says Wells. “This is why we view onboarding clients onto the Workday platform as more of an implementation partnership rather than a traditional client-vendor relationship. We constantly seek feedback throughout the process and tailor the platform to address their issues prior to going live.”
Need for analysis
Jill Popelka, senior vice-president and head of SAP SuccessFactors in APAC and Japan, says enterprises should first understand their goals and challenges when evaluating HCM software.
“Are they faced with an ageing workforce and now challenged with attracting talent? Is the organisation in hyper growth mode with multiple acquisitions in the next two to three years? What is the digital readiness of the organisation?”
Understanding these goals, Popelka says, will set the framework for what is required and what is nice to have.
Overall, taking a pragmatic approach with a long-term vision is the best way to determine an organisation’s needs. In addition, interview people in the organisation, ask what they need to be successful and to get their jobs done.
“A lot of the time HR can operate in a silo and focus on the organisational needs over those of the people. Be inclusive, be thoughtful and be honest – if you take this approach you will have a good framework for determining what you really need,” Popelka says.
IDC’s Javvadi notes that compliance with local regulations, such as those related to payroll and security, cloud migration capabilities and HR best practices, are the common criteria that APAC buyers use to evaluate an HCM system.
“At SAP SuccessFactors, we’re seeing a variety of functionalities deployed across Asia-Pacific,” says Popelka.
“In Asia-Pacific, in part because of the maturity of the market and partly because of the age of the traditional tools out there, we see more companies adopting our core HR solution, SAP SuccessFactors Employee Central, an integrated yet modular solution which allows customers to start anywhere,” she adds.
While deployment of HCM functionalities is “generally balanced across the board”, Workday sees more companies investing in features that improve employee experience and workplace engagement.
“Perhaps this may be due to changing mindsets on how best to create a productive workforce,” Wells says, adding that there is now a renewed focus on employee engagement with more research demonstrating the impact of doing so on the bottom line.
Malaysia’s AirAsia, for example, is using Workday to deliver personalised experiences for more than 22,000 employees.
AirAsia’s Workday platform keeps information on each employee and their employment record, including career path, technical skills level and professional development, as well as standard information that employees need to do their jobs.
That includes support for employees to do their jobs while on the go. “We’re starting to see a rise in the use of HCM software on mobile platforms,” says Wells. “This is, in part, thanks to the constantly evolving dynamics of the modern workplace. For instance, many companies are starting to see more hourly-based or field workers who don’t usually reside in an office with a desk and computer.”
Besides enterprise mobility, Wells points to other megatrends that are shaping the HCM market: the rise of artificial intelligence (AI) and machine learning; the growth of the gig economy; the changing definition of a worker; and the growing use of advanced analytics in decision-making.
AI and machine learning, in particular, has made its way into HCM suites as more suppliers and organisations alike realise that relying on third-party AI solutions via integration is not a viable option that degrades the user experience.
Oracle’s Khanna points out that because AI and machine learning requires accurate, precise and relevant data to deliver optimum results, Oracle is particularly attentive to the data it feeds into its so-called adaptive intelligent applications, and uses a combination of first- and third-party data.
“Tuning requires the appropriate data records to be fed into Oracle’s machine learning models, using training data and machine learning algorithms specifically selected for a particular use case, such as a process or outcome that we are optimising,” he says.
“Over time, the models are continuously refined using the customer’s unique data so that the outcomes continuously improve. The idea behind pre-tuned data models means no data scientists are required.”
The result of this is AI-infused HCM applications that provide hiring managers with the ability to process a large number of job candidates, streamline employee screening procedures and monitor and improve employee performance.
Employees can also use the built-in intelligence to find specific career advice and networking opportunities. “From there, they can reach out to these new connections and receive helpful learning points they would not otherwise have noticed or only realised much later,” says Khanna.
Some organisations may choose to keep their legacy HR systems even after rolling out new HCM software for reasons such as maintaining access to historical data, compliance and reporting requirements, as well as verifying information on terminated employees when faced with lawsuits.
When deciding if legacy systems should be retained, organisations will need to consider if supplier support is still available and at what cost, the risks of data loss or data corruption, as well as the possibility of storing the data on an archival system.
When determining the return on investment of a new HCM implementation, the cost of keeping a legacy system, as well as licensing, implementation and support costs of the new system should be weighed against expected business outcomes such as manpower savings and productivity improvements.
Also, factor in the cost of new hardware or any hardware upgrades in the case of on-premise implementations, as well as costs associated with training, data integration and software customisation.
Read more about business applications in APAC
- Oracle co-CEO Mark Hurd contends that having a common user interface and the ability to support data flows across a business are key capabilities that will spur the dominance of software suites over time.
- SAP’s Asia-Pacific business is growing and believes its latest C/4 Hana suite is uniquely geared to the scale of the region.
- Workday has increased its investments in APAC by more than 50%, and is looking to maintain its double-digit growth in international markets.
- Unit4 is giving users the ability to tweak its software easily without the need for consultants, turning the traditional enterprise software business model on its head.