In the last week of October, PwC Middle East and SAP released the results of their HR Digital Survey 2020. The survey covered more than 600 executives and HR professionals from different industries and countries across the Middle East and was focused on understanding the steps organisations need to take to transform the role of HR into a more strategic, value-adding function. Respondents by location were 39% United Arab Emirates, 27% Saudi Arabia, 10% Egypt, 8% Qatar, 11% other Middle East countries, and 5% outside the Middle East. Although the survey was carried out between February and June 2020, it was adjusted in the later months to take account of the impact of the COVID-19 pandemic.
With so many organisations under increasing pressure from the impact of the Covid-19 pandemic, this survey comes at the perfect time. Companies of all sizes are welcoming information that can support them to make changes in their business models and practices.
Key Findings and Impact
Middle East governments have led the way in minimising the spread of COVID-19, and their response has led to the introduction of mass remote working supported by digital technology. This has meant that organisations have had to rapidly adapt to the new “norm”. Some 72% of survey participants said that the pandemic has accelerated their digital transformation.
The impact of the pandemic has been felt right across all business operations, and this has led to the response to embrace digital transformation being driven by the CEOs of these organisations. This view is supported in the survey results, where CEOs were identified as key sponsors of digital transformation and were 4 to 10 times more likely to lead their organisation’s transformation efforts than any other senior executives.
Now, more than ever, it is critical that HR teams support the organisation by ensuring that their processes are efficient, effective and maximise the use of technology to deliver flexible, adaptable and speedy business solutions and services. Essentially this means a complete change in company culture and an acceptance of change as being the new norm. The survey results indicate that 48% of respondents believe that the HR function will be expected to support the digital transformation of the whole organisation by driving changes in company culture and mindset.
But are HR teams ready to meet the challenge? The survey results show HR departments still have significant work to do to capture the full benefit of digital transformation. Only 9% of participants reported that their organisations are innovating in HR using digital technologies, and 55% feel that HR’s biggest contribution to the overall digital transformation of their organisation will be in digitalising HR processes. In addition, 33% believe that the future focus of HR should be in developing and coaching talent, as well as acting as the change leader of the organisation (31%). In Middle East companies, HR departments have traditionally been transactional service providers, organising recruitment and arranging visas for overseas workers, among a range of routine tasks. Now there is a significant opportunity to use technology to support digital transformation, as well as to further automate processes such as CV screening, assessments, and training.
Using a HRMS to carry out repetitive administrative tasks will free up time and resources to enable HR to focus in a more strategic, and value-add direction, to drive engagement, talent retention and upskilling, and to enhance employee experience through the full employee lifecycle from recruitment to retirement.
This is an ideal opportunity for new players in the HRMS market, such as HRBluSky, who are bringing innovation into HR via the use of AI and other leading edge technologies, and who are facilitating new and creative ways of working such as management of outsourced service provision.
The survey highlights organisation culture and resistance to change as the biggest obstacles to digital transformation (55%), closely followed by budget restrictions (51%). Interviewees also highlighted the impact of not having enough people with digital skills who are able to support digital transformation and maintain systems once they are in place.
Clearly this puts an onus on HRMS providers to ensure that their products are supporting HR needs for efficiency, effectiveness and innovation, but also to appreciate the need for appropriate pricing models and low maintenance platforms.
What This Means For You
Need for HR to engage with senior management on digitisation
The fact that CEOs are viewed as the drivers of digitisation suggests highly centralised decision-making, meaning that HR needs to actively engage with CEOs. Digital investment in the core business is often prioritised, with support functions including HR overlooked by IT teams. HR teams must make a clear business case for driving digitisation in their area of responsibility.
Need for upskilling HR and employees
Respondents highlighted that HR departments need more digital reskilling than other functions. This suggests that HR is not regarded as a core area in digitalisation programmes across organisations. HR teams need upskilling so that technology providers can work with HR teams to transform the function into one that is more digitally enabled. Pre-COVID-19, the HR activities that respondents believed would be most affected by digital disruption included recruiting and employer branding, followed by training and development, and then performance management. During the crisis there was a shift in perception with training and development becoming the most popular choice, followed by performance management, and then recruiting and employer branding.
Need to free HR time and resources to focus on value-add activities
Repetitive back-office HR functions and services such as payroll are often still carried out manually and are the most likely to be automated. Many HR teams in the Middle East use technology for efficiency and automation rather than innovation. Only 10% of survey participants believe the focus of HR should be as a provider of HR services. Using technology to automate repetitive and high- volume administrative transactions helps HR to change focus in a more strategic direction, drives upskilling, and changes the skill set required.
HR teams that digitally transform become true business partners, providing the optimum employee experience, supporting talent development, and attracting and retaining top talent.
What if you were able to invest in digitising your HR function while reducing overall costs and improving performance? HRBluSky offers a unique solution to help you re-focus your HR function by simplifying processes, shifting technologies to the cloud, and embedding wider digital HR solutions, such as self-service, automation, and AI.
Survey link: https://www.pwc.com/m1/en/publications/digital-hr-survey-2020-challenges-opportunities-middle-east-companies.html