HR needs to step up its digital transformation efforts

09 November 2020 6 min. read

As Covid-19 pushes the value-adding potential of human resources (HR) into the spotlight, businesses in the Middle East are scrambling to catch up their digital HR capacity. In a new report, PwC and SAP outline some of these efforts. 

The human resources function of old was an administrative wing for most businesses, responsible for salary slips, recruitment documents or visa applications. That was before businesses began embracing the ‘HR business partner’ concept and digitalising their HR function, tapping into the value that data-driven working can bring.

Indeed, human resources is now seen as a strategic function that “shapes talent, develops leaders and enhances the overall employee experience,” according to PwC Middle East partner David Suarez. Come the Covid-19 crisis and widespread transitions to virtual working arrangements, this avatar of HR has only become more prevalent.

Digital maturity level of HR functions in ME

Using tools such as artificial intelligence (AI) and data analytics, businesses can monitor their workforce activity remotely and better prioritise time and resource allocation. For some, this is a way of getting through the worst of the pandemic. For others, these insights might well inform a more permanent transition to virtual working – a move that businesses around the world are considering for its cost-saving potential.

Digitalisation of HR

According to PwC, the Middle East has lagged behind to some extent when it comes to HR digitalisation. The firm teamed up with SAP to survey more than 600 business executives and HR leaders from various industries across the UAE, Saudi Arabia, Egypt, Qata, Kuwait and other Middle Eastern countries. Adding depth to the study were 13 interviews with public and private sector HR leaders.

“We launched this study to better understand the impact that this digitisation is having on the human resources function across the Middle East,” explained Suarez. The resultant picture is of an HR market in need of maturing. While global businesses at the cutting edge of HR tech are coming up with innovative ways to generate value, more than 40% of businesses in the Middle East are just starting to explore the role of tech in HR.

Demands from HR amid digital transformation efforts

This is still a step up from nearly 15% who are simply ignoring the digital HR wave. On the flipside, there are 35% of Middle East businesses that are currently implementing some form of tech-based HR solutions, while less than 10% are actually in a position to start innovating in the segment.

No doubt, the sheer necessity born out of Covid-19 virtual working conditions will spur many into action. C-suite leaders across the Middle East are likely approaching their HR departments at the moment with a view of implementing digital transformation. Per PwC’s survey, most new demands from HR are likely to fall into the broad mandate of changing the culture and mindset in the organisation.

Most professionals in the region continue to view HR from a very functional perspective, and changing this mindset will be crucial to overcoming the inertia against digital HR. Aside from this, the focus lies on changing the skill profile of HR professionals. The new avatar of HR requires a host of digital and analytical skills in addition to the traditional talent-management expertise.

New roles emerging in organisations to drive HR transformation

New skills

Be it through recruitment, skill training or adding new roles, businesses are looking to bring in these new skills as a way of facilitating HR transformation. Of course, underlying these efforts will be investments in tech and digital tools that can support this new talent. At any rate, organisations are set to take on a whole new look, and PwC researchers probed further about how this might pan out.

Many will start by onboarding a data analyst/scientist, given the role that digital insights have in boosting HR value. Also on the cards is a digital officer, to manage all the new technology. At the same time, tech investments and data analytics only come into play once the organisation has been oriented towards a more digitalised HR function. To get to this point, many are recruiting a change manager.

In keeping with the global acceptance of HR tech, a whole new set of digital HR specialists has also emerged. Nearly a fifth of businesses in the Middle East see value in recruiting such an expert. With all these new roles and recruitments on the cards, the question remains of where to find all this talent.

Talent pools for digital HR roles

For a third of all businesses, the solution is to simply poach professionals from their competitors. For another third, the consulting industry offers a rich pool of talent from which to recruit. The vast IT services industry also represents a talent pool that could be fit for HR digitalisation, while business schools are also prepping graduates for the role of tech in future HR functions.

As a result, there is plenty of talent on offer to fill these roles. That being said, not everyone is looking outward for change – indeed most are looking inward. At a time when revenues and cash are under squeeze recruiting new talent almost certainly means relieving employees. Many businesses hesitate to make this trade-off.

A suitable alternative is to upskill existing staff, which PwC reports is the avenue of choice for most businesses. One respondent, COO at the Kuwait Association for the Care of Children in Hospital Banafsheh Azizi highlighted this instinct. “it is to the benefit of organisations to help develop human capacity – build and increase the digital skills of employees and continuously support them with their professional development, both now and in the future.”

Training options for new digitally focused employees

In Covid-19 times, upskilling is no easy task, and many will have to rely on e-learning modules to train their staff. Others will learn through a combination of virtual and physical module, while some will simply learn on the job. At any rate, plans are very much in place to up the skill profile and drive HR transformation in the Middle East.

“Middle East organisations that enable their HR teams to digitally transform will become ‘intelligent enterprises’ that provide the best employee experience, support talent development and retain top talent for the long-term,” explained Adel Lafi, Director of Human Experience Management and SuccessFactors at SAP Middle East.