If the pandemic has taught us anything, it is the need to provide an "irresistible and amazing employee experience." 

Any investment in data, services, analytics, and tools to boost employee empowerment and engagement has an extremely high return on investment during this turbulent time in the history of the global economy.   

According to a survey by People Matters, 56% of the businesses acknowledged that the lack of platform and technology integration makes it difficult for them to provide consistent employee experiences. At the same time, a PwC report shows that 79% see digital transformation in their organizations accelerated due to COVID-19.  

Also, 96% of HR leaders see HR's role shifting from being only a service provider to concentrating more on designing employee experiences, acting as change agents, and developing talent. The HR function must keep up with this pace of rising digital transformation and disruptive business practices in order to deliver growth.   

Challenges in HR Functions in  Asian Pacific Market

HR functions today are challenged by several things, including labor shortages and the changing expectation of employees working from home. We could see the Asian Pacific market experiencing the heat of these challenges more than the other regions due to some of its unique specificities. 

Slow Adoption of Hybrid Work Model 

78% of the Asian workforce worked in person until 2020 (pre-Covid), much higher than in US and EMEA. This made the move towards Hybrid working more difficult. The slow adoption of the Hybrid work model in APAC is also attributed to highly diverse work cultures, a lack of strong tech infrastructure, and a high proportion of the blue-collar workforce.  

Fragmented and Diversified Market 

Another major challenge unique to APAC is its highly fragmented and diversified market, led by a myriad of languages, local regulatory requirements, and varied ways of working, making it challenging to drive standardization. 
War for talent is becoming increasingly competitive here as employees prioritize experience over pay and continuously changing skillsets. HR leaders have started looking at the Gig economy to provide the greatest flexibility without hitting the bottom lines.

Lack of HR Tech Modernization 

We also witness more than ever focus on HR tech modernization in APAC, with 89% of respondents (85% globally) preferring to implement people analytics solutions but only 38% (42% globally) believing their organizations are ready. 

The diverse nature of the region, differing levels of economic maturity, multiple HCM systems, complex data transmission, shortage of the right talent, inadequate systems/processes, budget limitations, and difficulty securing executive buy-in are the major reasons for this sluggish adoption.   

 

Methods of Overcoming These Challenges 

To manage these challenges, enterprises increasingly rely on service providers for flexible HR operations and digital transformation. 

HR Outsourcing and Digital Transformation 

As a result, we saw a 7% growth in HR outsourcing adoption between June 2020 and June 2021. Additionally, platform adoption continues to be at the core of HR transformation as enterprises extend their HCM systems or implement new ones.

Today's HRO has shifted to focus on Software as a Service (SaaS) solutions that demand standard processes, employee-centric experiences, and a carefully considered end-to-end service delivery model.

Organizations are looking for their outsourcing providers to proactively respond to regulatory changes and market shifts while bringing cutting-edge solutions to the table to help with organizational challenges.

Going forward, together, these challenges and priorities define a new future state for HR shared services and outsourcing.

For the first time, "focus on core business outcomes" is the most important driver for companies, with "cost" falling into second place.

This shows that now more than ever, companies view HR outsourcing and transformation as a strategic option that focuses on creating business value to enable innovation and differentiation.  

 

This article was contributed by our expert Ajay Chhabra  

 

Frequently Asked Questions Answered by Ajay Chhabra  

Q1. What are the key trends in HR digital transformation in 2022?

Over the past few years, the human resources industry has undergone unprecedented changes. HR professionals changed their work habits and improved their skills through the increasing push for a more diverse workforce and the growth and introduction of artificial intelligence (AI) and machine learning (ML). Below are some of the key HR digital/technology trends:

• Use of artificial intelligence and machine learning
• Blockchain technology will be integrated directly into the HR function through many use cases—lending transparency and trust
• Decentralized HR evolving new management skills
• Digital learning, training, & development
• HR Technology that elevates hybrid working
• Profound compliance with the D&I, DEI, and DEI&B
• HR Tech development for the employee well-being

Q2. How do you engage employees in a virtual environment?

When managers and company leaders prioritize employee engagement and teamwork, regardless of an employee's location, the organization as a whole thrives. 

Some of the ways to maintain your company culture and make your virtual staff feel like they're truly part of the team:

• Encourage health and wellness
• Host virtual meetings and casual hangouts
• Make sure employees feel heard and valued
• Foster personal connections
• Keep the lines of communication open
• Gamify your teamwork

Q3. How do you measure the success of a hybrid worker?

Changing to a hybrid work model won't happen overnight. It requires careful planning and maintenance to get it right. While it's tough to measure if your rollout is performing well, there are various metrics you can use:

• Office utilization
• Employee retention
• Employee satisfaction
• Engagement in the hybrid working environment
• Meeting participation
• Collaboration levels

Q4. What are the pros of the gig economy for workers?

Pro #1: Less Expensive than Full-Time Employees
Pro #2: Short-term Employees for Short-term Projects
Pro #3: Save on Training Costs
Pro #4: Around-the-Clock Service by leveraging a global workforce

Q5. How does HR analytics improve company culture?

People analytics is valuable business intelligence for any organization. It facilitates decision-making by providing information about employment trends and employee behaviors. People analytics helps companies identify and assess their employees' skills, abilities, and potential. It does so by enabling them to make data-driven decisions about their people. 

It's a great way for managers to make informed decisions about hiring, salaries, performance evaluations, or processes that impact engagement or turnover rates. By analyzing employee data on a macro and individual level, HR analytics helps make HR more personalized while increasing company motivation.