In the west, digital HR has become a booming business, with companies constantly seeking ways to improve operational efficiency and recognising the strategic value HR can provide, when empowered to act as a partner of the business.
Things have progressed immensely in the last decade and in such a highly competitive marketplace today, technology plays a pivotal role in helping organisations to deliver the strategic HR agenda.
Over the last few years, Asia has followed the trend and has also been building a strong industry within the HR technology space.
So, what about Africa? There are 54 markets in Africa and it would be impossible to summarise a complete view of the entire continent in one short article, so this one is focused on Kenya.
In 2016, I spent some time in Kenya, talking to business and HR leaders about the potential of technology for HR. It was very apparent that there was some interest but little action being taken. Much of this was attributed to lack of knowledge, leaders not viewing HR as a strategic partner and cost of investment.
To answer the question more fully, I reached out to two well-respected and trusted in-country advisors;
Stewart Samkange is SAP SuccessFactors’ East Africa Director and has previous experience working with IBM, Microsoft and Oracle. Emily Kamunde-Osoro is a Leadership Coach & Director at Rise and Learn and former HR Director at Jubilee Insurance, a well-known and respected business within East Africa.
To what extent are organisations using technology for HR?
Stewart and Emily echo a similar view to what I concluded when I visited Nairobi in 2016 and Stewart conveys it well by expressing that “there is a luke-warm reception when it comes to digital HR – there is some interest but very little action”.
Traditionally, where companies have implemented solutions, it has predominantly been to support core HR process and payroll; little has been invested in supporting the softer side of HR, such as recruitment, performance, talent, learning & development.
Many multinational and large organisations have some form of HR technology in place but there is now a growing interest from SME businesses too and this movement is starting to gain momentum, primarily driven by the following influences:
- Millennials are different and beginning to challenge the status quo when it comes to development, growth and opportunities.
- Attracting and retaining top talent is becoming increasingly crucial, as the marketplace becomes more competitive.
- The financial and telecommunication sectors, in particular, are facing growing pressures, prompted by disruption of new FinTech start-ups and better benefits being offered by cross-sector competitors. Leading organisations in these sectors are beginning to realise the importance of talent management and building proper succession plans.
- Concerns around sensitive data leaks and security breaches have put HR data on the radar of CEOs and CIOs, who are demanding more rigor around data privacy.
- Companies are under increasing pressure to show diversity statistics and demonstrate to the people that they are representing the full ‘face of Kenya’ (i.e. equality between tribes and ethnic backgrounds).
- Disruptive thinking and challenge; e.g. people don’t necessarily need to be in the office, how can HR support the business to achieve its objectives, big data & the power of analytics, opportunities to up-skill the HR community to make more of a difference.
Oracle and SAP offer top-tier solutions and their cloud-based technology solutions are becoming more affordable than traditional on-premise versions. As such, these solutions are also becoming attractive to SME businesses, as well as the larger enterprises.
However, the cost is a major factor that comes into play when considering any technology investment and many businesses will opt for a cheaper local solution, such as PERPAY. Solutions from India also have a growing presence in the marketplace, due to their affordability.
Outsourced services are growing in popularity among the smaller businesses, as it enables them to start embracing the benefits of automation, without high capital investment.
With all this said, there are still many companies that are using primarily manual systems and who have yet to embrace the benefits of a more digital and automated organisation.
What are the key barriers preventing organisations fully embracing HR tech?
Whilst mindsets are beginning to shift, there are some common barriers that prevent businesses from fully making the leap into the digital HR world. Such factors include:
- Too much focus on the cost, particularly the capital expenditure and operational overheads. Rather than looking at the overall cost-benefits, there is a perception that technology is expensive and businesses will often hone in on the cost of implementing and managing digital solutions, without also considering the cost-benefit analysis and giving merit to the return on investment over time.
- Leaders are failing to see the benefits of HR systems. Stewart explains that “from a CEO’s perspective, HR technology is not always seen as essential and in many cases is not of strategic importance.”
- Lack of forward, strategic thinking; many leaders are focused on looking at a reactive approach to HR, through things such as performance improvement plans, disputes and conflict resolutions. Clearly, none of these factors are about building or developing people. In many cases businesses are implementing technology because they need to, as opposed to appreciating how it can drive the business forward, provide value and develop a more effective and conducive working environment, through implementing strategies to proactively encourage attracting top talent, developing people and enhancing the workplace experience.
- Fear of losing jobs to technology. Emily explains that “in a country where unemployment is high and there is no government support for those without work, the prospect of losing a job is something that many people fear. This then translates into slow implementation or resistance to change, with many projects eventually failing.”
- While CIOs often see benefits of technology, they can become a big stumbling block when it comes to considering cloud-based solutions, through fears of data security and possibly also a loss of control.
- Lack of information, skills and visibility of market offerings. As HR technology is immature in Kenya, knowing where to get information on which system is best or how to effectively implement solutions can be challenging. Experienced consultants and project resources are also not easy to come by.
HR as a strategic business partner
In Kenya, the idea of Business Partnering in HR is already in place but there’s often a disconnect in expectations between Senior Business Leadership and HR teams; from a leadership standpoint, there is certainly an expectation on HR to support the business more strategically, provide greater value and offer data-driven insights. With this expectation comes a significant opportunity for HR to step up to the mark and elevate their profile.
Emily explained to me “organisations that value HR have been able to make milestones; that’s how we were able to succeed in a lot of things at Jubilee. A business that moves hand in hand with HR will find they will make more milestones than those who don’t.”
Stewart also echoes the same view and mentions “businesses that are awake are beginning to see that roles such as HR Business Partner are beginning to work. The demand from organisations is much more than simply processing leave forms and those types of things. Business Partners are beginning to realise their role is not just transactional HR but to understand the dynamics and be able to help run the business. That wakeup call is definitely hitting and leaders are beginning to put pressure on HR to make them accountable.”
During my time on the ground in 2016, I concluded that Kenya had a genuine need for technology to support and drive HR forward, yet the market had not yet seen or acknowledged this need.
Whilst there has been some increased interest and awareness in the last two years, it still seems that there is a huge potential that has not been fully acknowledged or embraced.
However, as businesses face growing pressures to develop and retain top talent, provide more strategic HR support and meet expectations of an increasingly younger workforce, they must respond and start to think differently.
In addition, as technology is beginning to have a major impact on all areas of people’s daily lives in Kenya, there is curiosity about how technology can bring real benefit and value to all areas of business. To this end, there is, without doubt, growing interest in exploring and investing in digital HR solutions.
There are a host of opportunities for those willing to challenge the status quo, break through the barriers and take a giant leap forward to fully utilise technology to help address the challenges discussed above.
Combined with an effective HR strategy, technology can be immensely powerful in enhancing operations, engaging the workforce, identifying top talent and delivering powerful, real-time insights to business leaders. These benefits can also be realised while reducing overall operating costs and enhancing productivity over a reasonable time period.
Emily explains that “technology has pushed businesses to really do things differently and effectively that means those who are leading Human Capital should align themselves, so they can understand how to help the business reach their objectives using technology, to report on time, manage talent and manage a diverse workforce in different locations and really deliver to create an impact. That can only be done using technology and it’s not something that organisations can run away from”
With this said, Emily also explains that “there is a lot more education that needs to be done.”
Considering the country’s strategic presence in the region, investment and innovation in groundbreaking technology and fast connectivity, there is an opportunity for Kenya to lead the way, certainly within East Africa, if not the wider continent. The big question is, will Kenya take up the opportunity to become a leader within this space or let another nation take the spotlight?
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