Cloud-based HR systems are transforming the world of work. We spoke to companies at the forefront of the revolution.
For businesses today there are not just significant operational issues when it comes to managing their staff and HR systems, but major strategic challenges too.
So says Paul Burrin, Chief Marketing Officer at Fairsail which offers a cloud-based HR and People system for mid-sized multinationals to automate HR and get the best out of their staff.
As he explains: “The immediate operational issue is that these companies are often growing fast yet simply don’t know enough about their people, because they are running antiquated HR systems or relying on spreadsheets.
“It never ceases to amaze me how companies can spend a small fortune on their finance, sales and customer systems, but so little on their own workforce. They invariably know more about their customers than about their employees.”
As if these challenges were not enough, Burrin says we are also in the midst of a bigger shift. “I describe it as a general move from HR to ‘people’, supported by new roles such as people scientists, or new processes such as people marketing.
“HR typically looks at employees as a resource or capital, rather than as individuals with talents and skills who have hopes, dreams and aspirations. You have to have a more complete picture to get the best out of your staff.
“This drive is supported by technologies that provide workforce visibility and integrated, end-to-end HR process automation which allows the company to deliver great workforce experiences.”
War for talent
Burrin says that what is driving this sea change is both the global war for talent and the lack of engagement within businesses. “Companies are often battling with both challenges simultaneously. On the one hand they are struggling to get hold of, and keep, good people. On the other, it is keeping staff engaged and productive.
“Studies have suggested that in a typical business less than a third of staff are fully engaged. It is a major reason why productivity levels continue to be poor across many countries. It comes down to motivating people and designing smarter ways of working.”
The point is echoed by Andrew O’Shaughnessy, CEO and founder of Ireland-based Newsweaver, a corporate Internal Communications (IC) technology business which has pioneered solutions that overcome the complex challenges facing internal communicators working for companies with very large workforces.
“People are smart but too often companies simply don’t treat them as such. They are not communicated to properly, and without effective communication it’s very difficult to engage people. But when they are engaged the results can be spectacular,” says O’Shaughnessy. “It’s only by releasing the power of their people that companies become great.”
Against this backdrop, large organisations are looking for smart cloud-based solutions to help make them both more efficient and responsive to their employees.
Adds O’Shaughnessy: “If you take the IC industry, up until now it’s actually been underserved by technology. But that is changing fast. The CEO now wants to have key metrics at his or her fingertips, seeing the feedback on particular initiatives and campaigns, and seeing the impact of particular measures. It is only when you know precisely what is happening in your business that you can formulate a strategy to improve what you are doing.”
O’Shaughnessy concedes that the 24/7 nature of global business can make this a particular challenge. “Keeping everyone aligned can be difficult.” But he says in recent years there has been a huge change in thinking within the IC industry.
“Companies are really recognising the power of it, and it’s actually being driven by employees. Those businesses which are good at IC outperform their peers time and time again. Research has consistently shown that effective employee communication is a leading indicator of financial performance and a driver of employee engagement.”
Being able to measure the effectiveness of a company’s communication and impact on engagement is critical, he adds. For instance, Newsweaver recently launched a ground-breaking cross-channel analytics product which enables companies such as Unilever to easily measure internal communications performance across multiple platforms including email, intranet, video and enterprise social networks (ESNs).
Burrin says the key is to use not just HR, but people analytics to help companies get to know their staff better.
“Information is available in systems both within and outside a business. Internally these could be from your HR, CRM or financial applications. Externally there may be additional publicly available data from sources such as LinkedIn, Facebook and Twitter.
“Combining and analysing these sources helps an organisation get a more complete picture of its people, and people analytics can be used to identify previously unseen patterns and trends. For example, it might help identify potential employees that are a flight risk, or whether the company is really paying for performance.”
One company that relies heavily on social media is TribePad, a developer of applicant tracking software which helps companies filter quickly through thousands of applications for particular posts.
Because companies increasingly only advertise online it means candidates can apply for hundreds of jobs at any one time. As co-founder and CEO Dean Sadler says: “People increasingly take a scattergun approach. But when someone uploads their CV as part of an application it is just words, they don’t really tell you anything about that person. Software-as-a-service (SaaS) solutions make it easy for a potential employer not only to read a candidate’s CV but also to find out far more about that person. For instance, they allow that company to know if a particular candidate is looking for other jobs. Together with LinkedIn and Facebook posts they can help a company build up a personal profile.”
Sadler says TribePad has to be mindful of delivering a value-added solution. “If recruiters use the same tools they will get the same results. That’s precisely why our software uses a range of tools which allow us to build up pictures of candidates.”
The company is also increasingly using video technology. “We take a video stream of a candidate and transcribe the audio into text which then allows the recruiter to search particular answers to particular questions. Such tools massively compress the time it takes to find the right people.”
However, Sadler stresses that such a scattergun approach doesn’t apply to more specialised job roles. “In these instances we go and find those people who have the skills and start to engage with them. They often have niche skillsets for highly skilled roles and it’s not uncommon for them to work globally.”
Steve Arnold, Commercial Director at absence management software specialist e-days, says one of the problems for HR teams is getting hold of the accurate and reliable employee data that’s needed to inform strategic decision-making. He says historically it’s been very difficult to get hold of HR data, particularly for multinationals running outdated HR systems. “You almost need another solution developed to compile the data, or you need data analysts working multiple Excel files.”
This has, however, created an opportunity for the likes of e-days. “We developed a flexible report building system into our e-days solution that allows the customer to cut the data in any way they want, putting control firmly in their hands. We recognise that all firms are different, and that HR, finance, payroll and other executives all have different data reporting needs, so we give them that control.
“When we ask prospective clients how they manage HR absence data, many struggle with the answer and they love what they can do with data in e-days, and many of our clients use it in very insightful ways.
“For instance, we recently visited a company that was using paper and spreadsheets to manage employee leave across a 3,000 strong workforce. This was creating a data reporting nightmare for payroll which has now been replaced by a click of a button within e-days.”
Arnold says that when the company originally saw a gap in the market for online absence management it thought the solution would be mainly for small firms, however this quickly changed.
“Very early on we started getting larger companies coming on board. These clients had HR systems, but the systems lacked the flexibility to deal with the complexities of managing absence at a global level.”
Interestingly Arnold has also seen an emerging trend where companies are looking for a best of breed suite of SaaS HR solutions.
“Instead of looking for one HR system that will do everything, they seem to be embracing a marketplace for HR SaaS solutions. The marketplaces generally contain approved SaaS solutions connected to specific lead HR/payroll systems. In this way companies can get best of breed solutions across multiple specialist areas and they’re not tied in to one supplier for everything for several years. One of our strategies is to make e-days as ‘connected’ as possible and to appear in every HR solution online marketplace, opening significant new channels to market for us.”
Benefits of cloud
The underlying strength of all of these companies is the cloud. As Burrin says: “With cloud systems the vendor takes responsibility for delivering SaaS to help reduce IT costs, gain faster adoption, and realise a rapid return on investment for customers.”
Arnold says smaller companies like his can develop really niche businesses. “The barriers to entry are so small. All you need is a smart group of people with a smart application and the world can be your oyster. Personally, I like the fact that we are also providing something that makes everyone’s daily life just that little bit easier.”
O’Shaughnessy says first-mover advantage can be key too. “If you take the IC industry it is seen as quite a small market by the very large software players which plays to our advantage. We are helping build up an almost entirely new software category which is growing fast.”
To help serve growing global demand, Newsweaver opened its first office in the US in Boston in 2014 and is looking at possibly opening up another on the West Coast. “We are following customers who will typically put our products into a team, trial it, and if successful then roll it out. The beauty of the software is that it is so intuitive and easy to use.”
However O’Shaughnessy stresses that it is not all about geographic spread. “We are building up a category defining product. There is a lot that we can do over the next couple of years to establish our products further. There is no reason why as a business we cannot be the global leader in our field.”
Pick and mix
Sadler says ultimately one of the key benefits of SaaS solutions is that they can help solve a myriad of problems at the same time. “It is a pick and mix approach and all we are doing is trying to find problems to solve. The technology is now getting to a really interesting stage, whether it be video, facial recognition or even AI (Artificial Intelligence) engines.
“For instance when an employer is watching a video of a candidate they can search for the words they are saying as if they were doing a google word search.
And because we know what the candidate said and what phrases they used, when you aggregate all this information together you can determine an individual’s characteristics and personality traits.
“The bottom line is that people have been giving their personal data away for the last 10 years and businesses can actually use this data positively. At the end of the day I am not telling businesses how to use this data, just creating the technology that enables them to use it effectively.”