This article has been written by Shailaja Prabakar pursuing a Diploma in Strategic HR for Startups and Emerging Industries from LawSikho, and has been edited by Shashwat Kaushik.
It has been published by Rachit Garg.
Table of Contents
Cloud computing has become the new normal of business operations in recent years, and its immense benefits continue to be experienced and nurtured every day around the world. One of the revolutionary changes in this technological era is the unification of cloud computing and Human Resource Management (HRM). According to the PwC HR Technology Survey 2022, HR Leaders from different countries have reported that technology investments with cloud vendors in the HR domain have met and even exceeded their expectations and have paved the way to strengthening their businesses. Such tech-driven adoptions have helped several companies recognise their employees and manage them better, thereby helping the emergence of HR as a strategic partner. This article focuses on the top 5 challenges faced by HR today, the 5 reasons why cloud technology is best for HRM, the factors that decide the right cloud solution for a business, and the future of cloud-driven strategic HRM.
Challenges in human resource management
The evolution and growth of HRM since World War – II have been steady, and it is quite fascinating to see how the intervention of technology in people management transformed companies from being work-centric to employee-centric to achieve their business goals. HR leaders around the globe are now looking at ways to improve employee-centricity and adopt strategic HRM, where employees are considered strategic partners and a competitive advantage in boosting organisational performance. However, there are several intricate challenges involved in managing people effectively and foreseeing the human capital needs of the future. The top 5 challenges faced by HR leaders, according to the HR Tech Survey conducted by PwC (2022) and Gartner (2023) in the past two years, have been discussed below:
- HR analytics and recruitment: As companies expand globally with a parallelly growing workforce, end-to-end hiring procedures have become more complex. Recruiters are now focused on hiring the “best-fit” rather than the “right-fit” candidates because the former aligns best with a company’s vision, mission, values, and goals. It is in this pursuit of growing a sustainable workforce that global companies are spending more time and effort than anticipated to fill the open positions. The PwC HR Tech Survey 2022 shows that 39% of HR leaders in the US are unable to fully unlock the capabilities of HR analytics to streamline their recruitment procedures
- Modernization of HR systems: Gartner’s 2023 research shows that 57% of HR leaders around the world are struggling to adopt modern HR technology. This is further supported by PwC’s 2022 report, which states that 36% of HR leaders in the US face trouble using cloud computing in HR systems. The complexity of transferring data from computer files into cloud storage, paired with the centralization of organisational data, has always held HR away from adopting innovation and, hence, stands as a barrier to HR technology transformation.
- Employee upskilling: Upskilling is an integral part of professional work environments, and it brings immense long-term benefits to individuals and organisations. The traditional approach to Learning and Development (L&D) initiatives cannot be applied anymore due to the impact of advancements in tools, processes, and culture shifts in the workplace. This raises L&D challenges that include:
- Flexibility in time and place for employees in offering training programmes.
- Understanding learners’ needs.
- Retention capability and performance after learners finish a training course.
- Metrics to measure the efficiency of learning programmes.
- Employee retention: Employee retention refers to the practise of holding on to an employee to prevent him from leaving their company and joining another. Employee retention is important because, without skilled employees, the company would not be able to flourish. Because the number of people who joined or left the company has a direct impact on its growth.
- Growth of remote and hybrid work cultures: As a result of the pandemic, remote and hybrid work cultures have quickly expanded, and as a result, employees no longer prefer to work from offices but rather prefer WFH (work from home) arrangements. Managing employees who are working from home could be a challenging task.
Benefits of using cloud computing in HRM systems
A cloud-driven Human Resources Information System (HRIS) is the one-stop solution for all the challenges discussed in the previous section. Cloud technology offers remarkable opportunities to develop traditional HRM systems into architectures with agility, allowing faster responses to industrial demands and trends. It also guarantees flexibility, scalability, centralization of data, faster implementation, reduced cost, and access to innovation.
Five reasons why HR leaders must migrate towards cloud-based HRIS are described as follows:
Better talent management
Recruiters and managers can use HRIS tools to identify sources of recruitment that can fetch potential candidates with a competitive and aspirational mindset who align with the organization’s values and performance goals. From sourcing to onboarding candidates, cloud-based HRIS can greatly reduce recruitment costs and time and allow automation of application and recruitment tasks.
Reduced paperwork and increased efficiency
From candidate applications to employee payroll, every intricate detail can be stored and managed on cloud platforms. Cloud technology paired with Robotic Process Automation (RPA), the Internet of Things (IoT), and Artificial Intelligence (AI) can drastically reduce the time spent on unplanned and repetitive tasks while enhancing data analytics, employee information security, and background and credential verification.
Improved learning experience
Cloud-based learning portals help employees choose their field of study with self-paced learning options, access coursework anytime and anywhere, and reduce costs spent on training resources. Given this flexibility of usage, HR managers can leverage these platforms to train their employees in skills that are essential for organisational growth.
Better employee engagement and retention
Ever since “The Great Resignation” trend started in the wake of the COVID-19 pandemic, HR teams have been struggling to create strategies for better employee engagement and retention. Cloud-based HRIS solutions can go a long way in solving this issue – they can help HR managers identify skill gaps and performance shortfalls and access the employee life-cycle in the company, through which managers can build a robust career plan for their employees and aid their career growth. Such practices, if followed consistently, can help companies retain the best talent and reduce employee turnover.
Building better remote work management
Another huge challenge for HR teams is managing their employees who work remotely. Cloud-based HRIS systems can help measure the quality and quantity of outcomes delivered by every employee and how often every employee collaborates with other teams and colleagues to complete tasks. Results from such studies are capable of highlighting employee disengagement, and managers can schedule one-on-one meetings with the identified employees to boost productivity. Additionally, HR teams can use cloud-based HRIS to analyse the performance of on-site versus remote employees and modify their remote work policies accordingly.
The future of cloud computing in human resource management
The versatility of cloud-based HRM tools has triggered research enthusiasts, IT industries, and HR teams across the world to disrupt and transform HR practices into more innovative people management strategies. Here are some of the advancements that are anticipated in cloud-based HRIS solutions in this decade:
- The merging of the Internet of Things (IoT) and Cloud Computing is expected to revolutionise HR activities in the workplace. Researchers are working on building a unified platform that can improve HR’s response time and agility.
- Artificial Intelligence (AI) is the new talk of the tech town, and its exceptional capabilities have left the world awestruck, paving the way to a smarter world. Incorporating AI into cloud-based HR solutions can provide exceptional benefits and a 360-degree support system for all HR needs, thus steering organisations towards healthy leadership in the future.
- Gamification of HR solutions in the cloud is another trend that has started to gain popularity in recent years. It involves using gaming principles to turn ordinary tasks into exciting work, which helps improve sourcing and engage the best recruits.
The intervention of cloud computing technology in HRM has resulted in the creation of innovative HRIS tools that can help automate and improve existing HR practices and manoeuvre organisations towards a better tomorrow. Implementation costs, security concerns, complexity in integration, and a lack of awareness and support from leaders are some of the most common barriers.
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