Everybody wants to be an employer of choice, to attract the best people and keep them. It’s a perennial dilemma for employers and typically seen as an HR issue rather than as one that takes input from the finance department.
That is changing as new technology enables business units to align budgets and financial objectives with the traditional HR domain of hiring and workforce planning.
“There are clear linkages between HR and finance,” says Oracle ANZ General Manager, HCM, Andrew Lafontaine.
HR and the chief financial officer are working together to ensure the best hires are made, training expenditure delivers measurable financial outcomes and that employees remain engaged.
Solairus Aviation is walking the talk, and seeing the benefits of aligning Finance and HR.
“With Oracle ERP and Oracle HCM Cloud, everything is integrated. We went from semi-automated, disparate systems to one integrated and automated system that enabled us to streamline our processes,” said Mark Dennen, CFO, Solairus Aviation.
Identifying what works
Cloud-based technologies that link budget needs to employee needs, are enabling the organisation to make smarter hiring decisions.
Hiring can be based on the expected return on investment from a candidate’s skills, rather than who the company can get for how much salary.
Management can assess whether investment in training has delivered more sales or met other financial objectives.
“You can set up metrics around customer-facing roles, for example, and get insights into what better performance looks like and how much revenue that creates for the company,” says Lafontaine. “Then you can start to consider what kind of training and development are needed to drive that outcome.”
Involving employees
Use your technology to gather data on the talents of existing employees and the skills you expect to need.
This approach requires staff to be involved in their career planning and can help employers make informed decisions on what matters to employees, and identify which benefits are underused and wasting money.
It can also identify red flags when career aspirations are known.
If three people are aiming for one position, executives can act early to manage expectations rather than see two disaffected employees quit, says Lafontaine.
“You can keep employees in this situation happy and engaged by offering other types of opportunities, such as leading a project, doing a secondment or giving them other responsibilities.”
He says the business case for this type of analysis is clear. Employees who are engaged and able to participate in their career progression will be great ambassadors for the organisation and will help it outperform competitors.
Hiring
When considering hiring strategies and engagement, first consider your “recruitment brand”, says Lafontaine.
Job candidates now go online to read reviews of organisations by former and current staff.
Your company will have a strong recruitment brand if people report positively on how they were hired, whether their career is being managed appropriately, when they feel engaged and when they consider the workforce culture to be a positive one.
Keeping up with change
Once you have business units collaborating, Lafontaine says your technology must be robust enough to evolve, as the organisation and employee expectations and objectives will change over time.
In an age of data mining and analysis, companies with a disparate collection of IT platforms can find themselves falling behind. While it might have once made sense to buy the “best of breed” system, the result is a patchwork of old IT systems that do their intended task, but can’t talk to each other.
That’s putting businesses at a disadvantage, with competitors that have invested in technology that allows them to dig into their data to extract insights on customers, products and staff, and to run predictive analysis to help make decisions.
New cloud-based systems can pull out information from across the business. They can tell you who your most valuable customers are, how you can upsell to them, and how they react to price changes.
Human capital management systems can reveal which staff are the most successful and whether investment in training will pay off in increased sales.
Businesses often have a valuable store of data built up over years, but they need an integrated IT system to draw it out of the different units, says Oracle APAC Senior Director, HCM Strategy and Transformation, Andrew Lafontaine.
As older, legacy systems come to the end of their lives, Lafontaine says investing in IT is becoming more strategic. Business owners are asking not what can it do, but, “What can we pull out of it? How will these systems help us move forward?” he says.
Getting started
Lafontaine advises anyone planning to replace legacy platforms to take a step back from thinking about IT in terms of process and instead identify the business outcomes they want in terms of their people, processes and technology.
“You need to be very clear about that,” he says, adding that owners can then evaluate possible technology in terms of how it will help decision-making.
Evaluating your options
“You can then look at the business case,” says Lafontaine. “Can you keep the technology that cannot deliver on the outcomes against the cost benefit of upgrading by putting in a digital platform that can?”
“People need to take a robust business approach so they understand what the technology is going to give them.”
Choosing your provider
Lafontaine says the technology not only needs to be fit for purpose but also robust enough to keep pace with the rate of development in IT. He believes this is as important as the technology itself.
“Technology is changing so rapidly that you need to consider which provider is investing in the research and development to future-proof your solutions.”
It’s also important to be confident about the level of support you will get in transferring from an old system. A high level of engagement is needed to ensure you capture the possibilities of new technology.
Lafontaine suggests decision-makers think about where they see their business in five and 10 years and consider the road map to get them there.
“Once they are clear on where they are headed, organisations are much more willing to make strategic decisions on what they want their technology to deliver, rather than spending money upgrading old systems.”
It’s often said that today’s schoolchildren will grow up to do jobs that don’t yet exist. It’s not a comforting thought for business owners and managers trying to plan future staffing needs.
But strategic workforce planning means hiring needn’t be an overwhelming task. This systematic form of planning draws data from your business to enable you to analyse your workforce and plan for the capabilities you will need as your company changes and grows. It protects your business by supporting cash flow.
“If you manage your workforce strategically it can have a significant impact on your overall cash flow, regardless of the size of the organisation,” says Oracle’s APAC Senior Director, HCM Strategy and Transformation, Andrew Lafontaine.
Industries such as banking, marketing and retailing now hire people who know how to engage with customers via the digital world, but what has become a standard requirement is also a recent one. Is it any wonder that employers continually ask themselves what skills are needed to stay at the forefront of their industry?
“It’s a tough one for a lot of industries because they are changing so quickly,” says Lafontaine. “If you can get your strategic workforce planning right you can reduce your attrition rates, improve retention of all your good people and improve the performance of everyone. There will be a cash flow impact, it will improve your bottom line.”
Strategic workforce planning starts by building a talent profile of everyone in the organisation.
It can identify resignation patterns and the best performing staff. Employers can then start to analyse and forecast. Is their workforce ageing? Do they have enough diversity of people? Are there issues that can be addressed with training and how might any actions taken affect the budget?
“You can then start to tackle strategic workforce planning around skill sets and what you will need in terms of industry change, products and consumer behaviours,” says Lafontaine.
He says the right technology will capture employees’ career aspirations.
Those who can see career progression may upgrade their qualifications and will be more willing to train up someone to step into their shoes.
Because the program makes analyses on capability rather than personality, Lafontaine says it also removes unintentional biases. The best candidate might not be the first person who springs to mind.
He points out that cloud-based technology has made strategic workforce planning programs affordable for small to medium-sized companies. Businesses can start with modules, but the real benefit comes from the depth of information provided by the full suite of technology.
Lafontaine tells business owners considering the technology “you just have to get started”, because the longer their system operates, the more data it will build and the deeper the insights it will provide.
The business that can rise to the challenge of rapid change will remain strong and outpace its competitors because by planning and preparing, the owners have protected revenues and cash flow.
St John Ambulance Western Australia went through a big learning curve regarding its business intelligence when it made its first acquisition in primary health care a few weeks ago. It did so with the comfort of information provided by its upgraded enterprise performance management (EPM) system.
St John Ambulance started in WA in the 1890s and had been looking at avenues for growth and identified an opportunity in the primary healthcare market. Its acquisition of Apollo Health brought four primary health clinics across the Perth metropolitan area into its business, allowing the organisation to expand beyond emergency care through an expanded business model that included alternative care pathways that could help keep patients out of emergency departments.
The non-profit organisation had been using an earlier version of an on-premise EPM system, but with all the opportunities it had to consider, “we needed to get our systems up to speed,” says Finance and Administration Director Antony Smithson.
St John knew it wanted a cloud-based system. The organisation covers all of Western Australia, with the state being the largest area in the world covered by a single ambulance service, and now staff working remotely have the same access as those in Perth. Having staff distributed over many locations also meant it needed an EPM system that was easy for its employees to use.
Smithson wanted a system that was scalable, could be accessed remotely, and was intuitive, so work wasn’t held up because someone had to be contacted for an answer. It had to be flexible enough to adapt to St John’s business structure as it was looking to evolve its business model and have the ability to measure and model any acquisition.
Oracle EPM Cloud has given the business units more commercial insight, allocating costs across the units so staff have a greater understanding of the business drivers. Information is available across the business, and allows St John’s executives and board members to gain a wider understanding of how actions affect other parts of its organisation.
“It gave us clarity,” says Smithson. “We could have one conversation that was accessible across the whole of the organisation.”
Smithson can run more ratios and combine financial with operational data. St John provides over 245,000 first aid courses a year. The visibility EPM grants, enables the company to determine break even on class sizes and revenue per student.
“It does change behaviour,” he says. “People think about the whole cost implications of the decision they are making, not just the ones affecting them. This changes our approach towards planning and allows us to think about ways we can reinvest our surpluses to better serve our charitable purpose.”
Smithson’s advice to business owners evaluating an EPM solution is to do your research and planning beforehand, and not to underestimate the time this will take.
When hiring consultants, ask how many implementations they have done, for what type of organisation and of what size?
What level of support and access will be provided?
What is the firm’s ongoing commitment to the product?
There’s no point in having a great product or service when your staff keep walking out the door.
Managing people is one of the toughest business tasks but the development of human capital management (HCM) is making it easier with processes to help managers attract and retain the right people.
HCM uses technology to help business owners plan for expansion and align workforce to growth.
Casey Schmeichel, Human Resources Manager of accounting, auditing and advisory group YCG, has used HCM to manage the firm’s surge in size from 30 staff three years ago to 70 today.
Parramatta-based YCG threw Schmeichel the challenge of recruiting during rapid expansion while ensuring it had the skills in place when it was a bigger firm.
She defines HCM as aligning resource planning with the business’ strategy and says it has been vital to YCG’s growth.
HCM is a much more forward-thinking and dynamic approach than traditional HR.
Schmeichel became an active player in driving YCG’s business strategy, working with unit leaders on how to drive innovation and change. Where did the partners expect the company to be in one year’s time? What skills would it need then, and how could it attract talent to fill the roles?
YCG partnered with Oracle to develop software for an HCM program that gave Schmeichel consistency, automation and more effective data capture. This saved her from having to hire another staff member and improved processes for HR, management, and employees.
The data capture enables much better data analysis.
“You start seeing trends in how people apply to you and their backgrounds and you can then tweak your job ads and connections as you go forward and when keeping an eye on the market,” she says.
It is also easier to retain applicant details and keep in touch with those for whom there may be a position in a year’s time.
As an organisation grows its structure changes, and HCM makes it easier for the firm to plan for scale and hire people who are excited by the prospect and want to be part of the ride.
It takes time to build data, so Schmeichel advises businesses to start the process early because, as the database develops, it becomes “worth its weight in gold”.
She stresses that the analysis needs to be coupled with networking within the company. She speaks to line managers and partners to learn what is important to them and how HR can help. Because HCM allows greater engagement with employees, ideas flow back up the chain.
Some smaller business owners will argue they don’t have the time or resources for HCM but Schmeichel says they can’t afford not to be doing it.
“You can have all the clients in the world but if your staff don’t want to stay, your business will crumble. If you are inviting your staff to invest in the goals and strategies of the business in a very strategic way you are setting yourself up for success.”
Technology has transformed the HR role and that’s good news for business owners.
Digital programs can now take care of personnel administration, freeing the HR manager to work across the business on growth objectives. That means business owners and managers should expect a more strategic and longer-term focus from HR, says Oracle APAC Senior Director, HCM Strategy and Transformation, Andrew Lafontaine.
“You should be challenging HR on how they can help you deliver business growth,” he says.
Lafontaine says clients across the region report that innovation and great customer service are driving growth and they see these as the key differentiators between companies.
“Customers will pay a premium for great service or experience. Both innovation and service are led by people and it has become vitally important to manage your people in a strategic way.”
He says human resources managers need to collaborate by talking to line managers on how HR can help drive performance and provide insights and strategies for hiring, retaining and training staff.
HR used to be about payroll, training, and performance management, but Lafontaine says business can buy digital technologies to run these processes. The HR manager can use the technology for analysis, such as building knowledge on employee engagement and how capability can be aligned to the organisation’s needs and objectives.
They can identify the employee with the best sales or customer satisfaction rates and build a profile to use in recruiting new talent, or to design training to improve the skills of current staff.
The effectiveness of the training can then be measured in terms of increased sales or customer satisfaction, and capability gaps identified.
“I’m not saying everything is about training,” says Lafontaine. “There are other variables, but when you can monitor and measure you can start to close the gaps.”
HR can use the analysis to contribute to real business outcomes such as cutting cost or risk and increasing revenues and customer satisfaction.
“You can play in this space, but it is key to ensure you have the analytics in place to measure the impact you are having,” he says.
This collaborative form of HR is not aimed solely at managerial levels and can be used to foster employee engagement across the company. Lafontaine says it can mean receiving valuable feedback from the staffers who deal directly with customers “even if it’s not what you want to hear” and then working to constantly improve.
The evolution of human resources will be new to some owners and managers and Lafontaine urges them to open the discussion with their HR manager on how the function can contribute to innovation and growth, or “how can you help me deliver on my business outcomes?”
Starting the conversation:
Do you have technology to free the HR manager from processes?
What level of analysis does your technology provide?
How can your organisation leverage that knowledge?
How can HR contribute to targets?
How can it help the company grow?
How is HR working, or would like to work, with other parts of the business?
Australia's company tax rate is unlikely to change in the upcoming federal budget, says Treasurer Jim Chalmers, suggesting a combination of targeted tax breaks and incentives will anchor the economic blueprint.
