The state of HR Tech in APAC

There is no dispute over the fact that technology adoption and workforce skilling will play a key role in determining the future preparedness of organizations. The adoption and integration of intelligent HR-tech solutions is an essential part of this process that will help HR develop new workplace models and design output-driven work processes. However, the multiplicity of terms in the discourse—artificial intelligence, automation, machine learning, HR analytics, chatbots—and unnerving headlines predicting mass unemployment rates in the future often fail to give us the larger picture. Furthermore, the lack of resources and insights specific to the Asia-Pacific region further necessitates a closer look at the state of HR Tech. With the human resource management market set to exceed $ 30 Bn by 2025,  according to the Grand View Research, let’s take a look at some of the trends and challenges for HR Tech adoption in APAC, and examine what the future looks like. 

Trends

Priorities: With an array of new-age tools and technologies at its disposal, HR leaders have moved ahead of simply automating routine administrative processes like attendance and payroll. Today, the application of intelligent technology permeates workforce management, career planning, talent acquisition, L&D, employee engagement, and business intelligence. Leaders all over the world, including the APAC region, are striving to formulate policies and processes wherein technology plays a central role. As pointed out by Deloitte’s 2019 Global Human Capital Report, HR leaders are no longer simply ‘digitizing’ their work, but ‘digitalizing’ their entire work process to integrate technology into the core of job roles. This critical shift indicates that organizations are now embracing the possibilities of intelligent technologies by using HR Tech to redesign recruitment, employee engagement, and training with an unequivocal focus on the employee experience. 

Investments: The investment in newer HR tools and systems has been steadily rising in the APAC region over the past few years. The latest edition of the Sierra-Cedar HR Systems Survey (2018-19) shows that nearly 70 percent of the organizations in the APAC region intend to increase their spending on HR technology. Although the region lags behind North America and EMEA by almost 20 percent, the gap is expected to close very soon as the adoption of HR tech has been in double-digits for the last three years. The survey also notes that small organizations are the fastest-growing segment among all new HR tech adopters. According to Sierra-Cedar, a rise in the number of emerging solutions that are readily prevalent in the cloud ecosystem, like embedded analytics, mobile-first usage, and integration with social media has encouraged organizations in the APAC region to invest in HR tech.

Challenges 

Adoption: Traditionally, HR leaders in the APAC region have struggled to adopt HR tech in a timely and effective manner. The sluggish pace has not only impacted future-readiness but also decreased the technology satisfaction in the region from 51 percent in 2016-17 to 45 percent in 2018-19. Alight’s ‘The State of HR Transformation Study 2018-19’ found that the top five capability gaps across HR roles in the APAC region were that in analytics, facilitating change, leveraging technology, building trust-based relationships, and business acumen. The study also highlighted a gap between analytics and governance, capability shortages, and a lack of consolidated data acting as a roadblock in the adoption of technology in core HR functions in the region. Alarmingly, despite the increasing pace of automation, 34 percent of the respondents in the study are still evaluating or just starting the adoption of robotics and cognitive technologies for HR and only four percent are using it as an edge against their competition. 

Mindset: Experts have time and again warned that in addition to learning new skills and technologies, we need to focus on fundamentally changing our mindsets to a digital-first approach. The challenge not only entails adopting a digital mindset oneself but also shifting the mindset of the organization’s entire workforce and creating a synergy between advancing technology and human skills. Unfortunately, HR leaders have been lagging on this front and haven’t been able to fully cultivate a future-ready and tech-embracing mindset, within and outside of HR. KPMG’s ‘The future of HR in 2019’ report then aptly recommends business leaders to adopt “a new mindset that recognizes the accelerating speed of change in the digital era and how it is dramatically rewriting the rules for future success.”

The Future

In the near future, organizations in the APAC region will have a much younger workforce as compared to their European and North American peers. This presents a unique opportunity for leaders in the region to implement a strategic digital culture of work as younger employees, who have been born in the digital age, will adopt new-age tools seamlessly. The Sierra-Cedar survey indicates that the “Asia Pacific is more focused on influencing workforce business decisions and informing business strategy as compared to other geographies.” The Alight study also corroborates this finding and says that automation, AI, and analytics will see strong adoption in the near future in the APAC region. 

The investment and innovation in the industry have also been a result of favorable domestic policies. The governments of APAC nations like India, Singapore, and China have extensively campaigned for the use of digital technologies in everyday life and businesses by creating policies that favor the digital ecosystem. One can expect this trend to pick up pace in the future and see tech-friendly and startup-friendly government policies. Additionally, providing mobile-enabled HR tech solutions is no longer a choice but a necessity. 

A growing body of evidence shows that a majority of organizations already offer mobile-first HR services to their employees and facilitate talent acquisition, payroll and leave management, and other critical workplace communication using the mobile. This is set to intensify in the future as organizations will increasingly look for mobile-first solutions to cater to a younger workforce in the region; in many cases leapfrogging directly to mobile HR and cloud computing, without worrying about legacy systems. 

All of these developments also mean that the role of HR will also evolve and new tech-enabled roles will emerge in the industry. HR leaders and professionals will have to learn new topics, like data security and analytics, and will be expected to create a new framework of working that combines the best of technology and unique human skills. Naturally, the traditional roles of HR administrators and managers will give way to expert and focused roles. 

As the demand for talent outstrips supply, organizations will increasingly adopt new tools and technologies to attract, hire, and retain employees. Organizations that have already started their digital journeys will have an edge over the competition, and laggards will have to work harder to catch up. The functions of recruitment, learning, and engagement will be fundamentally altered to use HR-tech in an indispensable way. However, the real question is, how do organizations get started on their digital journey without having a clear vision of how the future looks like? Alight suggests designing an outcome-driven and data-backed HR framework that provides frictionless services and a consumer-grade experience to the workforce. 

APAC organizations realize the importance of HR in transforming their businesses and are increasingly experimenting with new HR tech to develop new capabilities. Recent trends in the adoption of new-age technologies in core HR processes is encouraging and provide a unique platform for HR leaders to lead effective business and workforce transformations. However, organizations and leaders in the APAC region have a long way to go before they can claim that they are prepared for an unknown future.