The Brand New Challenges of HR

In a rapidly evolving workplace context, intelligent enterprises go beyond using data to inform or measure as part of their human capital management (HCM). SAP SuccessFactors and Effective People can help your company add intelligent HR technologies such as artificial intelligence to acquire the vision, agility, and speed necessary to empower your workforce.

How do you measure value when building a case for HR in the cloud? The experience economy has changed the way businesses compete. Expectations are higher than they’ve ever been, and what’s driving customer and employee decisions and defining their loyalty is the total experience you offer. Good experiences are table stakes (the minimum offering acceptable to compete in the market), but it takes great experiences to deliver differentiation, profitability, and lasting growth. Traditional HCM built its programs to support the business needs at the time, without a view of the employee experience. HCM systems, as we know them, fall short of creating the type of engagement that drives better business outcomes. That is why we are redefining HCM.

By putting your people at the center of what powers your business, you transform the employee experience. This means moving from data and processing workflows to designing employee journeys. Human Captial Management (HCM) solutions like SAP SuccessFactors break down siloed processes to deliver dynamic employee experiences that are designed solely around how people work and what they need to be productive. These experiences also extend beyond the individual to help teams operate at peak performance and help organizations achieve their goals.

Measure and Assess: The Seven Perennial Challenges for HR

Cloud HR software providers like SAP SuccessFactors have revolutionized people processes. While the system is standardized and can be rolled out on a global scale, the cloud is ever-evolving. This means that organizations need to embrace continuous improvement alongside efficiency and innovation. While there are various ways to measure the business value of HR solutions to build the case for cloud HR, we find it useful to measure HR business solutions using the seven perennial HR challenges. Each of the seven perennial HR challenges inherently contains several metrics that can be measured and followed through HR systems. Below, we have listed the most useful HR metrics and those that most organizations can measure with a cloud HR solution like SAP SuccessFactors:

Relevant for all perennial HR challenges: Additionally, organizations should analyze these metrics across dimensions such as gender, age range, organizational tenure, region/country, and job families.

Perennial Challenge 1: Designing and Structuring Organizations

This challenge involves defining roles, organizational structures and allocating, incorporating, or exiting talent due to growth, mergers, reorganizations, and other changes to your company.

HR metrics include:

Headcount

Headcount – Managers

Headcount – Employees

Manager ratio

Manager span of control

Perennial Challenge 2: Filling Jobs and Roles

Activities encompass recruiting, hiring, onboarding, and retaining talent, including contractors and internal candidates, to support your organization’s growth and operations.

HR metrics include:

• Hires and rehires.

• Terminations

• Terminations – Voluntary

• Termination rate – Voluntary

• Retention rate

• Staffing ratio (permanent versus contractors).

Perennial Challenge 3: Developing Capabilities

Enhance your workforce's skills through learning, job design, reskilling, upskilling, internal movement, succession planning, and career development.

HR metrics include:

• Promotions

• Job movements 

• Development goals, critical positions, succession readiness/bench strength, and positions filled through succession planning.

Perennial Challenge 4: Engaging and Managing People

Create a productive, engaged, and adaptable workforce through job design, goal setting, coaching, learning, compensation, promotions, and career opportunities.

HR metrics include:

• Business goals

• Employee engagement 

• Job satisfaction 

• Manager satisfaction 

• Average compa-ratio 

• Promotions

Perennial Challenge 5: Increasing Efficiency

Reduce your operational workforce activities' time and cost with efficient processes and automated technology solutions.

HR metrics include:

• Employees adopting self-service capabilities

• Workflow automation

• Workflow completion ratio

Perennial Challenge 6: Ensuring compliance

Comply with employment regulations related to various HR aspects such as your payroll, timekeeping, benefits, safety, hiring, staffing, training, and other workplace policies, rules, and laws. 

HR metrics include:

• Employee data quality

• Employee document compliance

• Compliance training ratio

Perennial Challenge 7: Managing Culture

Design HR processes that promote your company norms and values related to safety, security, learning, performance, diversity, equality and inclusion, well-being, agile collaboration, continuous improvement, and customer service*.

*This requirement differs in that it reflects how things are done instead of what things are done.

HR metrics include: 

• Quality of hire (e.g., employee termination within six months of hire).

• Business objectives alignment ratio.

• Employee engagement.

• Job satisfaction.

• Manager satisfaction.

• Customer satisfaction (not an HR metric as such).

How can Effective People Help?

HR metrics are important because they give HR and recruitment leaders actionable insights into how to improve their programs. If you think about what is important in relation to each of the seven perennial HR challenges and consider how to measure success and changes, it allows your organization to act and improve.

Moving your HR processes to the cloud might seem like a huge undertaking. Indeed, there are several complexities to consider and important decisions to make but working with a team of specialists will put you in a position to reap the rewards of what is fast becoming a must-have step for business continuity and organizational success. Discover the power of cloud HR solutions.

If you want to learn more about how your organization can measure and act on the above challenges, you can download our eBook "Human Resources in the Cloud: A Perspective from Effective People".