New strategies for the future of HR

93% of small and medium-sized businesses in South Africa say that recruitment and resourcing will be at the heart of their growth strategies post-COVID-19.

This was one of the findings of the Payroll and HR in SA: Rising to the challenges of change research report from Sage, which explores how HR and payroll professionals are adjusting to the new challenges of hybrid and remote working.

With everyone on the hunt for talent, businesses need to do things differently to attract and retain the best, says Jeff Ryan, Managing Director at AWCape, a Sage partner. That’s because people’s expectations about what they want out of work and life have radically shifted in the past 18-plus months.

And, as the “Great Resignation” trend spreads to South Africa, there could be thousands of highly skilled and talented people looking for new opportunities.

Open to opportunity

Unhappy employees who are “on the market” will either take whatever comes their way or stick around for the right offer. The latter are the people that businesses should be engaging, says Jeff, because they want something better, but they won’t go quietly. They’re also open to change and opportunities and usually have great ideas about doing things better.

“I worked in a job where, for three days every month, I’d copy and paste data into Excel spreadsheets and calculate commissions for the insurance industry. It was tedious, complicated, and very easy to make mistakes. And although it was a small part of my job, it was highly frustrating – yet nobody was willing to invest in the technology to automate these tasks. So, I left.” says Jeff.

The global shift to remote and hybrid working has significantly influenced how we think about and execute our jobs. Working flexible hours from home have led people to question if they can return to the 9-to-5 rat race, the daily commute, and the colleague who clips his fingernails while on the phone. And since 82% of SMEs switched to fully remote or hybrid working environments in the past year, there’s no reason to return.

The Great Opportunity in the Great Resignation

With expectations about what people want from work and life radically altered, businesses will need to fill some extreme (and often personalised) criteria if they want their best people to stay. This is becoming increasingly important as Generation Z enters the workforce.

Born between 1997 and 2015, these ‘digital natives’ have very different expectations of work, including when, where, and how they do it. Importantly, they are beginning their careers at a time when “work” as we know it is evolving. This puts businesses – especially the payroll and HR function – in an advantageous position to structure and strengthen their cultures, benefits, and ways of working to attract the best young talent.

And what’s the one thing all young people love?

Attracting talent with tech

When it comes to technology, people want the latest and greatest. It’s why we camp outside the iStore the night before the launch of a new iPhone. Unfortunately, businesses are slow to keep up – 90% of HR and payroll professionals say they need more efficient and simplified technology to ensure their success in the workplace. What’s more, 62% say that embracing technology and analytics should be a top priority for HR and payroll leaders.

“No one wants to join an outdated organisation.”

When people think about relevance in the job market, they’re unlikely to choose an organisation that still uses 20-year-old tech and needs someone to manually produce income statements and balance sheets,’ says Jeff. “But if you tell them you work with AI, machine learning, low code platforms, and the Internet of Things across diverse industries such as agriculture, professional services, and retail – it just sounds so much more exciting.”

This could soon change, as 70% of SMEs intend to switch from manual and offline systems to cloud software in the next year. However, as with any change management project, implementing new technology needs to be carefully planned and managed because existing employees might push back.

Actively engaging the disengaged

When implementing new technology, it’s crucial to get buy-in from your people. Any change imposed on them will be ineffective, and they will find ways to bypass the new system and return to their old ways of doing things.

Jeff suggests identifying and engaging with the most disengaged employee who is vocal about their rejection of the change – or, indeed, the status quo.

“If someone is strongly anti-something, they’re probably also passionate about it,” says Jeff. “Swinging the momentum of one person can swing a whole group of people. If you can get the detractors on board and change their mindsets, you could transform the entire process and project.”

But it’s about more than just identifying the person, says Jeff. It’s about working with them, including them in the decision-making, giving them responsibility and letting them own it. “If you involve them, they’re usually the ones that come up with great ideas to enhance the system to another level. But they need to be motivated to do so.”

New ways to motivate people

Jeff believes that how a company treats its employees makes all the difference in the business’s success. And with technology taking care of the mundane, repetitive tasks, HR and payroll professionals have more time and capacity to focus on the things that make a company a great place to work, such as:

• Managing employee engagement to increase productivity, motivation, and morale (48%)
• Freeing up HR’s time to advise executives (44%)
• Supporting employees and managers with increasing needs around mental health (43%)
• Increasing employee satisfaction (40%)
• Strengthening organisational culture to create long-lasting team bonds (38%)
• Managing talent to retain top employees (37%)

For Jeff, the Great Resignation is a Great Opportunity to do things differently, especially when engaging and motivating employees.

He shares these four ideas:

1. Pay for performance

An outcomes-based approach, paying for performance (such as meeting sales targets, completing specific deliverables, or finalising a portion of a project), is a great way to keep people focused and motivated.

“I don’t get paid a salary – I literally earn it,” says Jeff. “What that means is, if I don’t meet all my deliverables on a client project and the client doesn’t pay the company, then I don’t get paid either. Knowing that if I don’t work and I’m inattentive to my client’s needs, I’m not going to make any money. It’s a great motivator.”

He adds: “Salaried employees might rest on their laurels, knowing that they’ll get their paycheque at the end of the month – even if they are not actively engaged in projects. For the business, having a full-time resource on the books but not having enough work to keep them busy is essentially a sunk cost.”

While the ‘no work, no pay’ strategy won’t appeal to everyone, it’s an excellent way for highly driven, motivated people to earn more while potentially working fewer hours and controlling when, where, and how they work.

2. Move away from outdated performance appraisals

Measuring things like work ethic and attitude on a sliding scale of 1 to 10 is not an effective way to manage performance anymore, says Jeff, especially in remote and hybrid working environments.

“When the expectation is for an employee to deliver a certain outcome, rather than to be online for eight hours, who cares if they do the work at 1pm or 1am? As long as it’s done to a certain standard, it shouldn’t matter when they do it or what they do with the rest of their time.”

This performance management model makes it easier to provide benefits such as unlimited leave and to capitalise on global workforce trends such as the growing demand for gig work among Generation Z. For them, the idea of getting in, doing the job, getting paid, and moving on to the next one is appealing because it gives them more control over their time and earning potential.

Cloud-based specialist payroll software makes it easy to manage contractors and gig workers. It facilitates remote onboarding and offboarding, supports accurate tax calculations and takes care of reporting and compliance requirements. What’s more, it can be integrated with accounting and project management software to ensure people are compensated accurately and fairly for their work.

With powerful self-service functionality, cloud software has introduced a completely different way of working, supported by business intelligence, multiple data streams, real-time visibility, and seamless integration with other systems through powerful APIs. These features unlock new and exciting ways to manage, measure, and reward performance because the current model is not suited to a remote environment, says Jeff.

3. Adopt measurable, binary job profiles

Typically, performance appraisal questions are vague and open to interpretation.

“Take a question like: ‘On a scale of 0 to 10, how well does this person live our brand values of ethics and accountability?’ I don’t know how to answer that,” says Jeff. “If I give them 0, it suggests they’re completely unethical, but how do I give them a 10? So, we end up with a bunch of people scoring between 4 and 7. This isn’t a fair reflection or a good way to reward anyone because they’ll never score 10. It’s particularly difficult in the virtual world where you can’t always tell what people are doing. You can’t see the person working until 2am updating the Excel spreadsheet.”

So, what’s the alternative? Binary job profiles – because everything is measurable on a binary basis, says Jeff.

“Give people specific tasks to do, reward them accordingly, and incentivise them when they over-deliver.”

All job profiles should be clear-cut regarding what’s expected, and what success looks like – i.e., did you do what we hired you to do or not? This approach to performance management removes subjectivity from performance reviews and makes it easier to manage performance and track critical KPIs. As a result, the focus of performance management sessions can shift to important aspects, such as career growth and skills development.

And it’s even easier to do this when you operate from the cloud.

4. Switch to the cloud

If managing potentially hundreds of people on a contract, freelance, or outsourced basis sounds complicated, it is – especially when it comes to accurately calculating tax deductions and contributions.

In fact, 77% of HR and payroll professionals say they struggle with the complexity of payroll taxes, and 49% believe continuous changes in legislation and regulations drive payroll complexity.

Cloud-based payroll software removes a lot of the repetitive work and the chance for errors, making it easier to manage a remote workforce of permanent and contingent employees. And since the software is always compliant with the latest legislation, governance and reporting are a breeze.

Sage easily integrates with project management and ERP software, ensuring that everybody – including the tax authority – gets paid the right amount on time, every time. It also maintains a record of compliance, which radically simplifies and fast-tracks the auditing process.

Happiness at a premium

“You can’t put a price on happiness,” says Jeff. “For some people, happiness is being in another place. For others, it’s not staying up late on a Sunday night doing repetitive tasks that can be automated.”

With cloud software, you can meet the needs of both groups.