Workforce analytics, talent management and technology will continue to reinforce the need for HR to make people an important agenda in Africa’s boardrooms. With the continent’s business climate hotting up, shrewd leaders are recognising the potential of HR integration to revolutionalise the traditional HR function, turning it into a strategic component in the drive for increased profitability.[hidepost=9] [/hidepost]
The Economist Intelligence Unit at KPMG International conducted a study between May and June of 2012 into human resources (HR) to consider the impact of technology and what HR might look like a decade from now. The report that was generated is entitled Rethinking Human Resources in a Changing World and it offers a fresh view of the path ahead for leaders of the HR function.
The key challenges
The value of the HR function can elicit sharply contrary views, even within the same organisation. While the ‘war for talent’ is widely understood to be crucial to almost every business, the HR function is still often dismissed as non-essential or ineffective. Eighty-one percent of the respondents said they believe implementing the most effective talent management strategy is key to competitive success. Fifty-nine percent felt HR will grow in strategic importance, but only 17% felt that HR currently does a good job of demonstrating its value to business.
The forces of globalisation, talent constraints and new technology are driving rapid change to the HR function in Africa and elsewhere. Interestingly, 55% of the respondents expressed the opinion that the metrics that define success in HR today will fundamentally change over the next three years.
The report’s main findings included the following:
- HR is struggling with the challenges of managing an increasingly global, virtual and flexible workforce. What is needed is for the HR function to manage, hire and identify talent globally while retaining important local insights. Retaining talent remains HR’s biggest concern, particularly in the African context. Tim Payne, a member of KPMG’s HR Transformation Centre of Excellence, says he believes “talent management should be the top priority for HR, but many business leaders don’t feel that HR is delivering for them. I believe that is because talent management is so often anchored in the present rather than focusing on the unique roles, capabilities and skills the organisation needs to succeed in the future.”
- Finding ways to engage with workers will help address the challenges of this global, flexible and remote workforce. Importantly, while this needs to be achieved, it must not be done at the cost of loyalty and/or career development. Companies need to maintain employee engagement in the face of a less committed and more flexible workforce. The study found that employee engagement measures from virtual teams typically are lower than those for on-site teams that work close to each other.
- Technology has already transformed HR and the application of data analytics will foster even more profound change. According to the respondents, the area most in need of IT investment in the next three years is data analytics. It is felt that this is going to be the next technological quantum leap for HR. Interviewees shared their view that the application of analytics, if done properly, will enable a more robust understanding of employee-related needs and opportunities. For example, 57% of the respondents said data analytics is already helping to identify future talent gaps.
In markets like Nigeria, Kenya, Ghana and South Africa, where new and disruptive technologies have already been embraced in many areas of business, as well as in the rest of Africa where IT development is increasing rapidly, there is a daring, forward-thinking and entrepreneurial culture ready to embrace those technologies that could enhance the HR function.
KPMG believes that powerful technologies, emerging in times of heightened financial constraints, present a rare opportunity for HR to enact long-overdue reinvention. This reinvention involves becoming more empirical and having to provide hard evidence for opinions. For Africa to hold on to and maximise the interest in it as the place of the next big wave of investment, business leaders need to lay hold of the possibilities presented by new HR technologies and strategies. If not, the rest of the world will move ahead regardless and African businesses will become increasingly unviable.
However, those companies that embrace the opportunity to reinvent will afford their HR unit much-needed credibility at the highest levels of business. When such changes are made, HR executives will gain the confidence necessary to force their arguments, as leaders, on what is good business.
This article was first published on the KPMG blog.