3 HR Trends Driving Competitive Advantage Across Asia

No matter how much technology advances, how increasingly digital the business, or how global the markets – the key differentiator between you and your competition remains your talent. And with reports citing that, within half a dozen years, 60% of the world’s graduates will be coming from emerging economies, it’s important that these markets set themselves up for successful recruitment and retention practices today. This article reviews some of the most important trends impacting Asian businesses as far as HR strategies are concerned, and highlights how and where leading organisations are planning to leverage their resources to drive agility and growth. Asia: Impacting Global Talent The reshaping of global talent by today’s emerging economies across Asia is a trend that will impact operations around the world. Within these economies, we are seeing more and more local managers climb the leadership ranks, with fewer expats being deployed as a result; while Asian talent is increasingly also being deployed across international roles. At the same time, however, Asian economies are still struggling with "employee engagement", regularly quoted at around 30-40% levels, and still lagging in supporting business targets through appropriate HR strategies. Steven Yeong, Chief Talent Evangelist at Hof Consulting, says in an HRBoss blog that, "In Europe, we see an uptrend of organisations investing in employee retention strategies but in Asia companies are not doing well in terms of leadership and succession planning. That is … why employees are leaving"1. Talent management and performance remain key issues, therefore, and creating a meaningful career experience is core to retaining this talent. In short: across Asia, HR needs to pull itself out of its perceived "administrator" role and take on the mantle of "business partner" in order to support continued and sustainable growth where it counts. New Skill Sets in Demand As businesses target growth in expanding markets across Asia, with multinationals competing alongside home grown companies, many are choosing to "transform" their processes by becoming leaner, more transparent, and more ‘intelligent’. This strategy is making itself felt through its impact on new skill sets required to succeed, driven by technology advances, globalization, international talent pools, shifting customer requirements, and increased and new competition. The result, according to Towers Watson’s 2013 HR Service Delivery and Technology Survey2, is increased competition for: Digital skills to support e-business and leverage social media Agile resources that can adapt to changing situations Global operating skills and associated cultural sensitivity Ability to build relationships to support collaborative environments. With projected labour shortages forecast to hit developed countries while talent surpluses are troubling emerging economies, the challenge for Asian based businesses will be to create the right shifts in HR strategy on a global level. Technology has emerged as an enabler at just the right time, so that Software-as-a-Service is increasingly replacing existing HR management systems, and providing more flexibility, integration, and sustainability in delivering a single system across different regions. Leveraging technology, therefore, is a priority for many companies and many HR leaders are already busy optimizing their structures. According to Towers Watson’s report, 70% of organisations are opting for Shared Services as a model to deploy these new processes more efficiently. Competitive Advantage The report cites three emerging trends that will offer a competitive advantage for organisations ready to leverage them: First, the adoption of technology solutions as opposed to deploying FTEs; Second, a shift from administrator to knowledge based resource; and Third, the use of HR shared services models to replace business unit based generalists. In combination, these three trends will improve organizational agility and improve resource allocation, which is often cyclical. Close to a third of HR leaders have indicated that they plan to significantly increase their technology spend3 to get there. The fact that new solutions can accommodate different languages as well as different requirements at local level is significant, and has made their impact far-reaching. Talent is Mobilising Across Asia One complicating factor is the increased mobility of talent across Asia. The demand for varied work experience and opportunities to move across and up organisations means that ambitious Millennials need to be pitched accordingly. As a result, career progression, training, and mobile engagement are all becoming important attributes of organisations that successfully attract the best talent in competitive markets. It’s also an area in which, according to Towers Watson, Asian HR leaders are lagging their global peers4. Technology to Reengineer HR The HR technology market has seen tremendous growth and evolution over the last 10 years, and is estimated to reach more than US$9 billion in sales within the next 5 years5. HR leaders seeking to support business objectives by aligning HR services accordingly are making "reengineered HR processes" a priority: 55% of respondents to Towers Watson’s HR services and technology surveylisted this as a key initiative, followed by "improving line managers’ people management skills" and "implementing self-service". Consequently, spending is strong on HR portals, talent management solutions, mobile access, and Software-as-a-Service systems. The survey also highlighted technology spending as having increased by more than 20% over 2013 levels, whereby the key areas driving this increase were talent management, HR data and analytics, and integrating talent management and compensation. The investment we are seeing in HR technology today supports the strengthening of basic services – talent management, portals, payrolls – as well as preparing for new solutions that include integrated talent management, HR data, and analytics. Maintaining Costs in the Face of Growth One of the key challenges for HR is how to build a foundation for growth without committing to rising costs in future. New technology is a key solution to this dilemma, through its ability to leverage knowledge-based business intelligence and analytics to deliver more value with fewer resources. Shared Services models are key to meeting this challenge as they offer a flexible, sustainable HR structure; improved controls and compliance; more effective employee lifecycle management; improved self-service; data transparency; and thus drive more efficient and effective decision-making in support of business objectives. Taking Initiative on Data Analytics While SSON’s 2014 "State of the Shared Services Industry"6 report highlighted the fact that a large number of Shared Services practitioners have not yet developed a robust analytics or business intelligence capability – important as big data can identify flight risks as well as talent gaps – the fact is that you can start simple. With respondents citing insufficient resources and not being able to easily access or mine the data, many are overlooking the fact that there is a lot of data already to hand, which can yield significant insights. HR needs to learn to treat its employee data in much the same way that marketing or sales uses customer data. The inability to do this is holding HR back. Summary With HR in the midst of a shift from administrative support function to proactive enabler of business growth and agility, investing in technology will be a key step to delivering more value without increasing the cost base. On the contrary, research by HR consulting firm Towers Watson highlights HR’s impact on three-year revenue growth – i.e., its impact on growing business – rather than it’s cost base as a lever for driving more effectiveness7. The key take away here is that HR needs to redefine itself as a more scientific solution to business challenges. [eventpdf] [Editor's note: If you like this content – please share it with your social media groups across Twitter and LinkedIn. Just use the buttons on the left of the page. Please also add any comments below, to contribute to this discussion.] References: 1. https://hiringboss.hrboss.com 2. Towers Watson HR Service Delivery and Technology Survey, 2014 [40% of the survey sample came from the Asia-Pacific region] 3. Towers Watson HR Service Delivery Survey, 2012 4. Transforming HR in Asia - Towers Watson 2013 5. Source: https://www.marketanalysis.com/?p=338 6. SSON’s State of the Shared Services Industry Report, 2014 7. Applying Evidence-Based Analysis To Advanced HR Effectiveness, Towers Watson 2014 Resources: Emerging HR Service Delivery Trends in APAC, Towers Watson 2013 Applying Evidence-Based Analysis To Advanced HR Effectiveness, Towers Watson 2014 A New Strategic HR Model: Preparing for What's Next, Towers Watson 2013

3 HR Trends Driving Competitive Advantage Across Asia

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