HCM shifts to put employees first
Historically (circa 2000), typical core HR systems focused on payroll, ran in-house and were complex, expensive to maintain, highly customized and difficult to use. Nonetheless, these ‘systems of record’ served companies well by automating complex, time-consuming payroll and employee benefits processes. Fast forward to today. Employers are moving away from legacy point solutions that primarily serve employers to omni-purpose, cloud-based HCM systems designed, first and foremost, to meet the needs of digitally savvy employees.
Understanding that an organization is only as innovative and successful as the talent it attracts, energizes, empowers and retains, HR executives are accelerating their digital transformation initiatives. The goal is not only to cut costs and streamline service delivery but also to strengthen employee loyalty and help create a corporate culture that fosters talent development, team collaboration and continuous learning — all of which are essential if an organization is to adapt to changing markets and shifting workforce dynamics.
Today’s mandate is clear: HR must embrace digital technologies to reinvent the workplace and create an employee experience that mirrors the best customer experience, an experience that is human centered, personalized, compelling, and memorable.
The shift is toward tightly integrated multi-faceted, cloud-based systems that incorporate recruitment, on-boarding, learning and continuous performance management.
In the face of this mandate, however, many HR departments are still saddled with antiquated, ineffective, costly systems. According to Mercer's 2016 Global Human Resources Information Services study, the vast majority of HR departments' human resource information systems are antiquated, disparate and redundant.
Understanding millennials to maximize their potential
As reported in AssociationsNow, according to the annual CEO Challenge 2016 survey conducted by the Conference Board, the failure to attract and retain top talent is the leading concern among corporate CEOs, presidents and chairs.
The millennial generation (also known as Gen-Y and Echo Boomers includes births from approximately 1977 – 2000) will represent 40% of the total workforce by 2020, as reported by Forbes, making it the largest age group to emerge since the baby-boom generation. In the next ten years, according to Forbes, 75% of the workplace will be millennials.
According to DMR, there are 83.1 million millennials in the U.S. today.
PwC reports that millennials want a say in the design their contracts, working arrangements, rewards and benefits packages. They want flexibility and mobility, continual feedback on their performance, and easy access to massive open online courses (MOOCs).
A survey conducted by PwC sheds additional light on defining characteristics of millennial workers:
- Nearly 60% will deliberately seek employees whose corporate responsibility behavior reflects their own.
- 72% made compromises to get into a company.
- 52% said good opportunities for career progression made an employer attractive (the top response).
- 66% feel they need to gain international experience to further their careers.
- Less than one third of millennials expect to work regular office hours.
The mantra for millennials seeking employment is a resounding “make work-life better.” Putting a finer point to it, millennials believe more in “life” than in “work-life balance.
According to Fidelity Investments’ Evaluate a Job Offer Study, when asked how much of a pay cut they would be willing to take for an improved “quality of work life” (such as career development, purposeful work, work/life balance, company culture), millennials report they are willing to take, on average, a $7,600 pay cut.
Furthermore, when asked which is more important when evaluating an offer – financial benefits or improved quality of work life – 58% choose the latter.
The Fidelity Investments’ survey also revealed that millennials are always on the lookout for a new opportunity, with 41% expecting to start a new job in the next two years. Even with 86% of millennial professionals currently happy at work, nearly half (49%) are either actively looking, or open to a new opportunity.
Additional characteristics unique to millennial workers include (Source: DMR):
- Enter the workforce at a later age than prior generations
- Strongly expect employers to invest in employee training and growth
- Spend 18 hours on their smartphone each week (86% of U.S. millennials own a smartphone)
- Are likely to quit job if employer has substandard technology
The emergence of a new generation of workers presents an entirely new set of challenges, and talent management will become a key strategic tool, which places great responsibility on the shoulders of HR.
As masters of digital technology and natural-born multi-taskers, millennials are primed for success. The onus is on HR to employ digital tools and strategies that effectively harness the massive energy and unbridled potential of millennial workers.
HCM’s strong (and cloudy) growth
By all accounts, the global HCM software market is set to soar in the years ahead and will rapidly ascend to the cloud.
Check out this roundup of recent HCM market predictions by leading market research firms:
- As reported in AppsRuntheWorld, the worldwide HCM applications market will reach $17.8 billion by 2020, compared with $15 billion in 2015, at a CAGR of 5%.
- The HCM market will grow at a CAGR of 9.2% from $14.5 billion in 2017 to $22.51 billion by 2022, according to MarketsandMarkets.
- The global HCM market is forecast to grow from $12.59 billion in 2016 to $19.88 billion by 2021, at a CAGR of 9.6%, according to RnR Research.
- As reported in TechTarget, the HR management software market was $19 billion in 2016 and is forecasted to grow to $21 billion in 2017 and $24 billion in 2018.
- In 2017, TechTarget reports, SaaS HR software surpassed on-premises systems for the first time, accounting for 56% of installed HCM systems, up from 36% in 2013.
- More than half of all enterprises will rely on cloud-based or hybrid solutions for their human resources systems by 2020 – more than double the number that do today, according to ISG Insights. By 2020, more than 75% of companies expect to have migrated at least one HR system to the cloud, ISG finds.
- As reported in a recent Forbes Insight study, a survey of 798 HR executives from across the globe conducted by KPMG finds 40% intend to replace their existing, on-premises HR system with a SaaS solution in the near future. Specific HR functional areas ripe for cloud adoption include benefits administration (40%), HR analytics (32%), talent review services (32%), time reporting services (32%) and core HR functions (30%).
Humanizing HR with SAP SuccessFactors
SAP SuccessFactors is a leading global provider of cloud-based human capital management (HCM) software. SAP SuccessFactors’ application suite spans and integrates the entire HCM landscape, including on-boarding, social business and collaboration tools, a learning management system (LMS), performance management, recruiting software, applicant tracking software, succession planning, talent management, and HR analytics.
More than 6,200 customers (managing 47 million employees) worldwide have selected SAP SuccessFactors HCM solutions to help their HR teams step up their digital game.
Across the board, leading analyst firms (Forrester, Gartner, IDC) recognize SAP SuccessFactors for its excellence and continuous innovation across the entire suite of cloud-based HCM solutions.
Mobile access is critical in today's digital workforce, where success depends on being faster, smarter and more connected than the competition. SAP SuccessFactors recently announced a completely new design of the SAP SuccessFactors Mobile app for iOS, to be made available on the Apple App Store later this month.
With more than 20 years of implementation experience and 200 consultants around the globe, NTT DATA is an ideal partner to deliver a faster, smoother implementation by SuccessFactors Certified Consultants.
We have invested heavily in pre-configured templates with built-in best practices, project accelerators, data migration tools, bundled offerings and HCM specialists that allow our clients to significantly decrease HCM implementation timelines and costs.
In addition to being a leading provider of SAP SuccessFactors implementation services, NTT DATA is also an SAP SuccessFactors customer. We selected SuccessFactors and choreographed the rollout of the SuccessFactors Performance & Goals, SuccessFactors Compensation, including variable pay, and SuccessFactors Employee Central solutions.
The average deployment time for each module was 3 – 5 months and, today, the system, re-labeled “Navigator” by NTT DATA, reaches 20,000+ users worldwide and continues to see growth in self-assessment participation by employees.
Read more about NTT DATA’s SuccessFactors success story here.
Contact NTT DATA today to learn more about our expertise and hands-on experience with SAP SuccessFactors or to schedule a meeting with our HCM specialists at SuccessConnect in Las Vegas, August 29 – 31.
Post Date: 7/28/2017