The new work paradigm

Today more than ever, the term “human resources” feels less aligned than ever to what managing people is. Moving past traditional views that perceived employees as one-dimensional assets, companies are currently undergoing a multi-faceted transformation that goes far beyond digitization or moving towards a more customer-centric business model, and extends to how they develop an employee experience also.

The consequences of the restrictions brought on by COVID19 that forced companies to impose working remotely, quickly became obvious and a new way of how we work began. What motivates people now is transparency, flexibility, and a healthy work-life balance. To the company’s benefit, a highly engaged team is significantly more motivated and loyal which leads to higher levels of productivity. For that, HR departments need to humanize the way employees are managed throughout their entire employee lifecycle, from recruiting and onboarding to retention, development and exit.

And companies need to act fast. A study done by Qualtrics shows how important it is for companies to actively influence these aspects. Last year, the company surveyed around 14,000 full-time employees from 27 countries, including Germany and only 65% of the participants stated that they wanted to remain with their current employer in 2022.

So, what exactly are HR departments up against?

Trends and challenges that HR departments are facing

With COVID, the hybrid workplace was a strategy to help ensure people’s health and safety but with recent political, cultural and social disruptions, it has become a rather permanent model. Employees now search for purpose in their work and are asking for diversity, equity, and inclusion (DEI) and environmental sustainability strategies. The employers of today want to make an impact and are more socially conscious than ever. They also have more practical demands such as having the freedom to work around their own schedules and not those imposed by their companies, and not be forced to go to the office.

However complicated it might sound, companies can’t afford to ignore these demands. Employees have more leverage because of the shortage of experts in almost every industry. The race for talent was a predominant trend in 2022 because of what many called “The Great Resignation” when many left their jobs if their expectations weren’t met. With remote working becoming so popular, employees found they’re no longer limited by geographical constraints when it came to searching for new opportunities.

However, as hybrid and remote work models solidify in 2022, organizations struggle to address well-being challenges that are unique to these circumstances such as blurred boundaries between work and personal lives and feelings of isolation. Roles and tasks also change constantly so employers need to continuously invest in training and reskilling employees.

These complex sets of challenges ask for an evolving role of leadership. Management competencies are changing to meet the demands of new work models and shifting employee expectations, and human experience management is key in this new paradigm.

What is human experience management?

Human Experience Management vs. Human Capital Management

Human capital management (HCM) is a set of practices used by HR professionals to manage and automate their employee data. This approach is based on the idea that employees are regular assets and lacks the human context that employee experience data can bring. An environment where people feel motivated, engaged, and productive requires an intentional focus on a positive employee experience so Human Capital Management (HCM) is now falling short of what businesses need. That’s why Human Resources (HR) is evolving to human experience management, or HXM. As the focus of HR shifts from developing HR-driven processes built around what employees need to do in their daily job, HXM provides the mindset and the tools needed to foster an employee experience and cater to the modern business demands.

Technologies such as SAP Human Experience Management (SAP HXM) are crucial in developing the processes required to foster talent in 2023. While traditional HCM systems mainly focus on the administrative tasks such as collecting data of hierarchical processes, doing standard operations and automating them, the cloud-based SAP SuccessFactors HXM Suite creates experiences that are beneficial for individual employees, teams, and whole organizational units. It enables people’s departments to contribute to their businesses’ success more than ever. And data is key here.

What kind of data is needed for a successful Human Experience Management?

Traditional HCM solutions focus a lot on collecting and storing operational data (O data) that stems from the relationship between contract offers and hiring, the training period, and employee turnover. However, this is just one aspect of what human management is now. With SAP Human Experience Management, companies, employees, and customers are able to record experience data (X data) that provides information about why something is happening, not just what. The combination of both O and X data allows your company to improve the user experience for each individual colleague as well as at a more general level.

Gathering experience data such as employees’ first impressions after the first 30 working days with a simple survey or how well recruiters react, whether new colleagues feel optimally integrated into the teams, how effective training is, how much trust employees have in managers, offer a completely new level of insight that companies can use to improve employee satisfaction. By combining this data with typical O data such as acceptance rates and initial performance, HR managers can see which improvements they should prioritize.

There are aspects to HXM, not just data such as the human aspect.

The human factor: Why is listening and understanding essential?

As far as gathering information goes, there is no better way than listening carefully and understanding what employees are saying and demanding. This applies to the entire staff of a company, to individual departments and teams and to each individual employee. Apart from this individual consideration, there are a few insights that can be usefully generalized. For example, the Qualtrics study reveals that out of those who want to stay with their current employer for five years or more, 76% see opportunities for everyone to reach their full potential and 83% feel a sense of belonging to their company.

Of the employees who want to stay six months at most, only 25% confirmed this and 35% of those surveyed said they would look for a new job if they had to go back to working full-time locally. Another source of discontent is having to do routine administrative tasks or be dependent on others for administrative matters. This can be changed with Employee Self Services, which facilitate the processing of administrative tasks with SAP SuccessFactors and ensure more autonomy.

The value of Human Experience Management technology

According to Dr. Steven Hunt, SAP Chief Expert for Work & Technology, “Technology enables companies to achieve results that would be impossible to achieve without it, but only if it is used correctly.” From designing and restructuring organizations, to recruiting, developing employee capabilities, ensuring compliance and managing culture, HR departments can benefit from HXM technology in many ways.

According to a study done by SAP SuccessFactors on their customers, one of the main challenges that advanced technological solutions like SAP HXM solve is collecting valuable, accurate data that helps HR departments with their decision-making processes. They also improve their data quality, support talent reallocation by increasing internal staffing rates, scale their workforce management platforms and help with the hiring process. In fact, SAP’s HXM required “six months to build up a candidate pool with 4,000 highly skilled experts” and customers reported an average of 256% growth in the number of job candidates after rolling out the solutions.

Companies need an employee-centric HR department if they want to attract and retain top talent and technology is key. Here at NTT Data we understand the importance and value of a well-rounded HXM solution and our experience in both the industries and the technologies have helped us implement these complex solutions in countless companies.

Are you ready to start your transition to a HXM approach?

Jan Amman, NTT DATA SAP global offering lead for Life Science