HR’SROLEINUNLOCKING

ORGANIZATIONALGROWTH

EmbracingthetransformativepowerofinnovativeHRcapabilities.

l

OXFORD

ECON0MICS

Introduction

Midsizeorganizationsface

complexthreatsinanincreasinglyunpredictableandcompetitive

environment.

HRexecutiveshaveauniqueperspectiveon

howtheworkforcecancontributetotheoverallsuccessoftheorganization.

Tobetterunderstandtheopportunitiesand

challengesfacingthisimportantsectoroftheglobaleconomy,OxfordEconomicspartneredwithSAPtosurvey2,100midsizebusiness

leadersaroundtheworldandacrossindustries.Thesampleincluded400HRexecutivesand

150ITexecutives—eachofwhichplayan

importantroleinsupportingHRinitiatives.Keyfindingsinclude:

1.ScalabilityistopofmindforHRexecutives,whoseeitasameansofunderpinningthe

financialgoalsoftheirorganizations.

2.CloudadoptersinHRareconsiderably

aheadofnon-adoptersinimplementing

abusiness-widetechnologystrategyand

tacklingworkforceplanningandoptimization.

Howdoyoucompetitive?

plantostay

3.HRstillreliesheavilyonmanual,low-valuetaskstoworkaroundlegacysystems,whichmidsizeorganizationsseektoremedyby

investinginintegratedtechnologysolutions.

competitive,wewill

workforce

creatinganenvironmentworkerscanthriveand

ideas.”

industrialmanufacturingfirmin

“Toremain

implementmoresolutions—

whereour

deliverthebest

—ACFOatanSaudiArabia

MidsizeGrowth:Addressingscalability

andtalentchallenges

Figure1:Whatareyourorganization’stopbusinessobjectivesforthenexttwoyears?

Selectthetop5;top10resultsshown.

HR

Attractnewcustomers

Theprimaryfocusformidsizeorganizationsoverthenexttwoyearsisgrowth.Morethanathirdofmidsizeorganizationssaytheirtopobjectivesareattractingnewcustomers,increasingmarketshare,andimprovingmargins/profitability.

Growingrevenueandimprovingcustomer

45%

experience/retainingexistingcustomersroundofftheirtopfiveobjectives(seeFigure1).

Increasemarketshare

40%

HRmanagersareabitmorefocusedonscalability

thanothers.Scalabilityefforts,however,are

Improvemargins/profitability

complicatedbypressingITinfrastructure

38%

challenges,whichhindercapacityforaround

Growrevenue

38%

Improvecustomerexperience/retainexistingcustomers

36%

Innovatewithnewproducts,services,andbusinessmodels

halfofmidsizeorganizations.HRrespondentsciteaninabilitytoscaleprocessesandsystemstomatchorganicbusinessgrowth(53%),standupnewbusinesses,enternewgeographiesordeploynewbusinessmodels(47%),andadjustorreplanbasedonnewinformationorshiftingpriorities,resultingindelayedordereddeliveryandcustomerdissatisfaction(46%),astheirtopthreechallenges.

35%

Attractandretaintoptalent

Anotherareathatcouldimpactorganizations’abilitytoscalearethechallengesaround

33%

Increaseorganizationalagility

havingtherighttalentinplace.HRleaderscitedthesetalent-relatedrisks:

30%

■Findtherighttalenttomaintainoperations(49%)

Minimizebusiness/compliancerisk

■Retaintalent(42%)

30%

■Reskill/upskilltalenttoadjusttochangingrequirements(41%)

Increaseemployeeproductivity/efficiency

27%

Inagrowingorganization,HR’srolebecomescrucialinareasliketalentmanagement,

workforceplanning,andcompliance.

Topperformersarealreadyinthecloud

Figure2:Whichofthefollowingbenefits

havebeenmostsignificantasaresultofyouradoptionofcloudsolutions?

Selectuptothree;topfiveresponsesshown.

WithITinfrastructuresholdingbackgrowth

possibilities,manymidsizeorganizationsare

movingawayfromlegacy,on-premisessolutionsandshiftingtothecloud.Indeed,cloudsolutionshaveearnedwideracceptancebecausethey

●HR+IT

Improvedouragility

supportenhancedcollaboration,enableinnovationandgrowth,andoffergreaterflexibility.

38%

Optimizedourprocesses

37%

Thevastmajorityofmidsizeorganizations(73%)haveadoptedcloudsolutions.Companiesthatareconsideredtopfinancialperformers-thosewithrevenuegrowthandprofitmarginsgreaterorequalto10%and5%respectively—showan

Improvedourcustomerexperience

evengreateradoptionofthecloud(78%).

36.5%

HRandITrespondentscitedthesestrategic

Reducedcosts

35.5%

benefits:improvedagility,optimizedprocesses,improvedcustomerexperience,reducedcostsandimprovedemployeeexperience(see

Figure2).Inaddition,asmidsizeorganizations

Improvedouremployeeexperience

35.5%

competeagainstlargerorganizationswithlargerbudgets,thecloudhasenabledthemtoimprovetheirscalabilitywhilekeepingcostsdown.

Howdoyouplantostaycompetitive?

“Weplanonmovingworkloadstothecloudforbetteroperational

management.”

—AdirectreporttotheCTOataConsumerProductscompanyintheNordics

Thebenefitsofcloudadoptionextendtotheorganizations’overallbusinessandtechnologycapabilities;andcloudadoptersreport

beingmuchmoreconfidentintheirabilityto

overcomecompetitiverisks.Cloudadoptersaremorelikelyto:

■Haveabusiness-widetechnologystrategy(57%vs50%ofnon-adopters)

■Feelcomfortablewithemployeeproductivityandengagement(83%vs68%ofnon-

adopters)

■Havelowerstaffturnover(25%vs.15%ofnon-adopters)

■Prioritizeexpandingtheirgeographic

footprint(57%vs45%ofnon-adopters)—whichmayindicatethatcloudisfundamentaltoeffectivescaling.

Howdoyouplantostaycompetitive?

“Optimizingourcloud

infrastructureforscalabilityandcost-efficiencyforbetterdataprotectionandeasyexchangeofinformationinsidethe

organizationsothatweimproveonourproductandservice

qualityanddeliverytime.”

—AChiefTechnologyOfficeratanAustralianprofessionalservicesfirm

Cloudadoptersarealsomorelikelytohaveanopenstandardplatformacrossallsolutions,

makingiteasiertotakeadvantageofthelatestincoreHRandpayrollinnovation.Forexample,morecloudadoptersareplanningtoinvestin:

■Employeeself-service(54%vs.45%ofnon-adopters)

■Chatbotsanddigitalassistants(47%vs.34%ofnon-adopters)

■AI-poweredpersonalization(35%vs.25%ofnon-adopters)

■Mobilecapabilities(30%vs.17%ofnon-adopter)

AddressingWorkforceChallenges

withIntegratedTechnology

Figure3:WhichofthefollowingcoreHR

andpayrollfunctionalitiesareconsidereda

must-havetocompeteandaccelerateyour

organization’sgrowthpathoverthenext2year?

Selectuptothree.

Whenaskedabouttheirtopworkforcechallenges,HRrespondentshighlightedworkforceplanning

(79%),regionalcompliance(69%),andmanagingadispersedworkforce(64%).Manyfacedrelianceonmanualtasksduetolegacysystems(44%)

●HR+IT

andstruggledtoscaleprocessesandsystemstomatchbusinessgrowth(53%).

TimeManagement

49%

Benefitsadministration

Toaddresstheseissues,ITandHRexecutivesconsidercoreHRfunctionsessential,includingtimemanagement,benefitsadministration,

40%

Reportingandanalytics

andmobileaccessibility(seeFigure3).Thesecapabilitieshelptobreakdownsilos,enhanceflexibility,andsupportgrowth.

35%

Acrucialmechanismbehindachieving

Mobileaccessibility

thesecapabilitiesisthecentralizationand

optimizationofdatacollection,analysis,and

32%

Employeeself-service

archivingaswellasinvestmentinanintegratedsolution.Integratingprocessesanddata

company-widecanhelporganizationscreate

31%

positiveemployeeexperiences,toaddress

Globalpayroll

talentattractionandretention,andefficiency,toaddressscalabilitychallenges.

30%

Therespondentsalsoseethevalueof

Visibilityintoallworkers(FTE,contingent)

integratingprocessesanddataacrosstheir

27%

organization.Morethanthree-quartersbelievethatintegrationsupportstheireffortstooffer

Flexibilitytomodifysolutionsbasedonneeds

createinnovativebusinessmodelsatscale,

19%

keepdataaccurateanduptodate,andoffer

consistentemployeeexperiences(seeFigure4).

Embeddedcomplianceandlocalization

18%

NativeERPintegration

10%

However,inpractice,someprogresstowardsthesegoalsmaybeneeded.Only45%of

theHRandITrespondentsseeasingledata

repositoryascrucial,while29%valueaunifiedsolutiontointegratedata,workflowsand

experiences.Inaddition,onlyaroundhalfareusingdatamanagement/analytics(53%)andaworkforcemanagementsolution(51%).So,theymaynotbegettingthefullvaluefromtheirHRtechnology.

Integratedplatformsoffergreatersecurity,

simplicity,andagility.Lookingahead,thereareindicationsthatintegrationandunificationwillbeafocus:31%plantoinvestinaunifiedworkexperience,withsmallermidsizeorganizationsshowingevenmoreinterest(37%).

Inaddition,thereisapreferenceforanintegratedbuyingapproach.

■37%prefertostartwithcoreHRandaddsolutionsfromthesameprovider

■30%purchaseindividualsolutionsfromthesameprovider

■28%buyasinglebundlefromthesameprovider

Figure4:Towhatextentdoestheintegrationofprocessesanddataacrossyourorganizationhelpyouachievethefollowingbusiness

outcomes?

Toasignificantandmoderateextent

●HR+IT

Deliverreal-timeinsightsonkeyperformanceindicators

Enable,measure,andsupportongoingdigitaltransformation

77%

Offersconsistentemployeeexperiences

78%

Keepdataaccurateanduptodate

80%

Createinnovativebusinessmodelsatscale

83%

74%

Howdoyouplantostaycompetitive?

“OurplanistoworkonenablingourHRdepartmenttobemoredatadrivenandstrategic.”

—ACHROataJapaneseprofessionalservicesfirm

HR,Financeintegrationimprovesdecision-making

Currently,53%usemanagement/analytics,

and51%useworkforcemanagement

software.However,asignificantshareoftherespondentsplanstoimplementtheminthenext12months(35%inHR,40%inFinance).Connectingpeopleandfinancedata

enablespredictiveinsightsthroughanalyticsdashboards,improvingtalentandfinancialdecision-makingincludingthebenefits

outlinedinFigure4.

Thewidespreadadoptionofcloud

withinHR,generatesbenefitsacrosstheorganization.includingfortheFinance

function.Thesebenefitsincludereducingcosts(36%),optimizingprocesses(39%),improvingvisibility(20%),andenhancingautomation(25%).Suchadvantagesalignwiththecommongoalsofreducingcost,risk,andcomplexity.

Asthefinancialsuccessofmidsize

organizationsincreasinglyreliesonHR

decisions,thealignmentbetweenHRandFinancestrengthens.Technologysolutionsserveascatalysts,enablingHRtobetter

supportfinancialresponsibilities,suchasforecasting,planning,andriskreduction.

Over25%ofHRandFinancerespondents

prioritizeminimizingbusinessand

compliancerisk.Inaccuraciesinforecastinghinderscalabilityfor33%ofHRand22%

ofFinancerespondents.HRisaddressingthisbyimplementingtechnologysolutionswhichsupporttheacquisitionofworkforceandfinancedata,leadingtomoreaccuratemodelsandinsights.

Howdoyouplantostaycompetitive?

“Usedataanalyticstomakeinformeddecisions.”

—DirectreporttoChiefHumanResourcesOfficeratahigh-techhardwarecompanyintheUS

Conclusion

2.Leverageasingleintegratedplatformsolution:Adoptingthesetechnologieswillimproveemployeeexperiencesandincreaseproductivity,aswellastackleworkforce

relatedandscalabilitychallenges.

3.IntegrateyourHRandFinance

functions:Greateralignmentofdata

andprocessesamongthesetwofunctionsempowersthemtodrivebusiness-wide

insightsandimproveddecision-making.

Despiteexternaluncertainty,ITandworkforce

challenges,byfocusingontheiremployeesandleveragingdigitaltechnologieseffectively,the

HRandITfunctionswithinmidsizeorganizationsarepresentedwithrealopportunitiesfor

success.Werecommendthefollowingactions:

1.Shifttocloud:Incorporatingcloudenablesthescalabilityrequiredtoremaincompetitiveandgrow—startwithcoreHRasthe

foundationandtakeadvantageofemergingtechnologies,suchasAI.

Byimplementingthesestrategies,midsize

organizationscancreateacompetitiveanddynamicworkforcethatismotivated,skilled,andalignedwiththecompany’sgoals.

AboutSAP

AnestablishedleaderincloudHRtechnology,

SAPgoesbeyondtraditionalhumancapital

managementtoimprovethewayyoumanage,develop,andengagewithemployees.SAP

SuccessFactorssolutionscovercoreHRand

payroll,talentandlearningmanagement,

workforceanalyticsandplanning,employee

experiencemanagement,andsalesperformancemanagementandareusedbymorethan

9,900organizationsand260millionendusersacrosstheglobe.Inadditiontoprovidinga

comprehensiveandglobalsetofHRcapabilities,SAPSuccessFactorssolutionsserveasthe

sourceofpeopledataforallSAPcloud

applications.Thisenablesorganizationsto

operateHR,finance,procurement,andmore

fromasingle,opencloudplatform.

Learnmore

aboutSAPSuccessFactorssolutionshere

.

AboutOxfordEconomics

OxfordEconomicsistheworld’sforemost

independenteconomicadvisoryfirm.Coveringover200countries,over100industrialsectorsand8,000citiesandregions,weprovide

insightsandsolutionsthatenableclientsto

makeintelligentandresponsiblebusiness

decisions