Streamlining the business of human resources
Human resources in the GCC is mostly administrative rather than strategic today, says Talal Bayaa, chief executive and co-founder of insurance start-up Bayzat, and most companies are still keeping old-fashioned paper records.
“The human resources [HR] experience in the region is mostly administrative,” says Mr Bayaa. “This shapes how much HR departments can contribute to company strategy with given resources.”
Half of all HR time is spent on processing information and answering employee questions, according to 2015 research by Ed Lawler and John Boudreau of the Center for Effective Organizations in the United States.
And Mr Bayaa says from his experience the majority of companies in the region are still relying on traditional means – scanning, printing and storing documents about their employees and accounts they manage.
“In ‘developed’ small or medium-sized businesses, we might come across spreadsheets, but even using them is creating inefficiencies relating to data accuracy, administration time, accessibility and security,” he adds. “A lot of HR specialists admit that the way they store information is not the most effective, but this is how things have been done before and they continue the tradition.”
Oxford Strategic Consulting’s HR in the GCC report found that effective HR could add US$14 billion per year to the Gulf’s GDP, according to the professionals surveyed.
In its 2013 study of 1,100 professionals – almost a quarter of whom worked in HR – it found that professionals working in human resources had, on average, just four years of experience.
While Oxford Strategic Consulting said this was “comparable” to global figures, it added that much of it appeared to be administrative, and that four in 10 had not attended any HR-related training. Only a quarter of HR leaders rated HR as excellent compared to global best practices.
The group’s chairman, Professor William Scott-Jackson, says many senior GCC leaders believe that they “own” topics such as engagement, motivation and change, particularly in family businesses, where leaders “maintain full responsibility for, and knowledge of, all aspects of people management”.
If HR processes are automated, leaders can take back control of managing their people, he says. “This may mean that HR, as it is currently defined, may not be needed. However, a more valuable role is that HR should develop its expertise into strategic capabilities.”
Such automation tools have become known as human resource management systems and can eliminate much of the routine paperwork – benefits, payroll, attendance – and automates answers such as time off from employees as well as reports
Sage, a provider of HR software, claims that the right automation tools can halve time spent on HR admin and save up to 40 per cent in costs.
Mr Bayaa says an HR platform has to be “adaptable for every regional case to centralise all operations, as each country may, for instance, have a different leave policy”.
Oxford Strategic Consulting dubs this need “glocalisation” – that is to say, supplementing global practices with “targeted interventions” to address specific local needs.
Claire Donnelly, a Dubai-based senior consultant at business consultancy MHC Consulting, a client of Bayzat, agrees. “As HR professionals, we are often left in the dilemma of purchasing a system that we can only half-use.”
She says Middle East companies struggle to find a relevant system that is compliant to the local labour laws and allows a company to build in additional flexibilities in benefits, such as changing calendar day holidays to working day holidays.
“When it comes to maintaining the records and movements of a company’s human capital, it is extremely difficult to reduce the amount of paperwork required,” Ms Donnelly adds. “Contractual and ministry requirements, copies of passports, visas, Emirates IDs, overtime calculations, holiday entitlements – it can be endless and it’s often easier to resort to paper personnel files.”
As well as insurance comparisons, Bayzat, which boasts 3,000 individual and business clients, also provides its own HR automation tool, Bayzat Benefits, free to clients who have purchased insurance or costing from Dh150 per month for non-clients, depending on company size.
It centralises and automates HR data, says Mr Bayaa, and its employee self-service site can “drastically improve the HR department’s efficiency”.
ADP, an American provider of HR resources management software, says that even in the US, nearly a third of HR teams still track employee data and benefits manually. In a 2007 study it found that businesses with under 1,000 staff had an average of 2.7 full-time staff working in HR.
“Depending on the size, HR challenges can be different,” says Mr Bayaa, “but the reality is that, in most cases, HR specialists are expected to be in charge of a lot of critical operations and need to find ways to save their valuable time.
“I would not say that HR in the GCC is behind the times, but we are still not utilising available technology in most company processes.”
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Updated: January 23, 2017 04:00 AM