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HR

Meeting workplace expectations in the age of fluidity and flexibility.

For Life. For Work. For You.

01. Introduction

02. Cultural changeThe rise and rise of HRTransformative market trends

03. Meeting heightened expectationsThe Uber user effect Work, rest and pay Flex appeal

04. People, processes, technologyManaging complexity Digital maturityHR’s Hierarchy of Needs

05. ConclusionReinventing HRA fresh perspective on HR

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Working culture had been evolving for some time before national lockdowns dramatically impacted the workplace environment.

Before people were forced to work from home, organisations were already embracing greater flexibility. With more staff operating from multiple locations, and keeping variable hours, the validity of the traditional office-based 9-5 was already being questioned.

There’s no doubt that the pandemic has accelerated the pace of cultural change, however. Organisations had to adapt, whether they wanted to or not, and HR teams were urgently called upon to support employers and senior managers.

As we move forward, what can companies learn from this experience and how will the relationship between employers and employees evolve? With organisations seeking to meet the challenges posed by increased workforce flexibility and fluidity, are HR teams equipped to provide employees with the experience they require in a more digital environment?

This paper takes a close look at how cultural change is likely to impact businesses, from heightened staff expectations to the reinvented role that HR plays. It will also examine the technology that’s required to support HR – and why payroll has become the most important element in its digital infrastructure.

Introduction 01

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The rise and rise of HR

When businesses faced their most difficult times during the pandemic, it was their HR teams that they turned to. When anxious employees were desperate to know the impact on their livelihoods, it was HR that provided clarity. When workforce data and analysis was needed to help business leaders steer their companies through unprecedented disruption, HR provided it.

“People needed answers,” explains Cathy Geerts, Chief HR Officer at SD Worx. “It wasn’t normal to be asked so many questions about such things as how many people were sick on any one day, but we were constantly being asked to provide this type of information.”

For the role they played in protecting organisations and worker wellbeing, HR professionals may well go down as unsung heroes of the global pandemic within wider society. But within their own organisations, where they were able to step up and provide the answers, there’s little doubt that their vital contribution has been recognised.

“It was very much the case of, cometh the hour, cometh the HR team,” says Katie Jacobs, Senior Stakeholder Lead, CIPD and business journalist. “CHROs were leading the conversations and making the big decisions. We’ve seen many CHROs moving up to board level for the first time – and it’s been great to see.

“People issues have come to the fore and discussions around wellbeing and culture are now being discussed at the same level as company finances.”

This new-found level of influence may well be necessary as businesses look to manage the fallout from Covid-19 and the ongoing cultural and technological changes which continue to impact the world of work and pay.

Cultural change

“We’ve seen many CHROs moving up to board level for the first time – and it’s been great to see.”

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Transformative market trends

The workforce challenges that companies must now contend with are certainly significant. According to our Future of Work and People in Europe study, almost half of companies (46.7%) believe there will be radical changes to the way we work following this crisis.

The research, which included 3,000 European businesses, identified four major trends likely to impact HR. These were:

i) Fluidity - the growing trend for employees to work in a less rigid fashion, through remote or home working.

ii) Flexibility - a desire for companies to provide differing types of employment, embracing variable compensation packages and increased engagement with non-permanent employees.

iii) Employee experience - with a more fluid and flexible workforce, organisations will need to consider how they communicate with workers and nurture the right culture.

iv) Digitalisation - facilitating all of the above will require HR teams to review their digital infrastructure to meet these new demands.

While these trends were present before the pandemic, the crisis has accelerated their growth. For example, where some companies may have previously allowed 5% of their workers to operate remotely, this rose to 95% - 100% for many during national lockdowns.

What this demonstrated was that many organisations can operate more fluidly should they choose to, but a strong infrastructure is needed to support this in the long term.

“The lockdowns have been like a social experiment – we now need to learn from it and embed what we have discovered to allow for better leadership, training and culture,” said Cathy. “What it has also helped many people realise though, is how important digitalisation is.”

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Meeting heightened expectations

The Uber user effect

As consumers we’re used to having instant access to information and control over transactions. So, when we’re denied that same experience in other walks of life, it’s very noticeable. Heightened expectations have raised the bar when it comes to the employee experience, and created a challenge which HR professionals will need to overcome.

According to The Future of Work survey, 57% of European companies are actively seeking ways to improve the employee experience – while another 20% have mid or long-term plans to tackle this issue.

“It is the Uber Effect,” explains Adam Morris, HR Transformation Consultant, at Lace Partners. “We now expect to be able to do everything on our phone. Employees want on-demand information and self-service. Should they want to change their name or address, they don’t want to send a series of emails and wait weeks anymore – it needs to happen in real time.”

There are expectations from employees, senior managers and even regulators that HR can answer questions and complete transactions instantly. With HR expected to provide consumer levels of customer service for their organisation, Adam believes that the role of HR has been reinvented. “While it was once the personnel administration department, simply there to support the finance team, HR evolved to provide a compliance function. Now it’s evolved again, into a customer service role. No one is yet offering Amazon levels of service but some organisations have those ambitions.”

Work, rest and pay

To meet employee expectations, organisations will need to adjust to cultural changes and embrace fluidity and flexibility. Although many businesses were forced to do that during the pandemic, it remains to be seen how this will impact behaviour in the long term.

While some organisations have demonstrated a willingness to move away from a purely office-based culture, others are more reticent. According to Bob Rehill, Business Change Consultant and Founder of Bob Rehill Associate Network, it will be difficult for businesses to establish the infrastructure needed to support workers if they don’t first accept the culture change that has taken place.

He explains: “During the national lockdown, some companies were making it clear they wanted staff to return to the office. But employees are now asking whether that’s necessary.”

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“We now expect to be able to do everything on our phone. Employees want on-demand information and self-service.”

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Meeting heightened expectations

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Bob argues that the way companies view their workforce needs to change. He says: “Historically, organisations have always worked from the inside out, but they are now having to look from the outside in and view things from the employee perspective.”

As employees seek a better work-life balance, post pandemic, they will continue to look for greater fluidity in the way they work as well as flexibility in the hours they work. While the ‘Uber user effect’ refers to greater customer service expectations, the term could also be applied to a more flexible approach to work and pay. Almost 1 in 5 (18%) workers are now categorised as contingent workers – which includes freelancers, independent contractors, consultants and other non-permanent workers.

With more people looking to fit work around their lives (rather than the opposite), companies are increasingly willing to accommodate greater flexibility in the contracts and compensation packages they offer in order to attract top talent. “When I started in HR 20 years ago, talented people would often only become a contingent worker in-between jobs.” says Cathy. “But now the decision is often a deliberate sustainable choice. People are picking and choosing the projects they want to work on. Companies are following the talent and you see more of them willing to work more with contingent workers.”

Flex appeal

There are other compelling reasons to work with contingent workers, beyond sourcing skilled freelancers. It can be more cost effective when there is a need to fulfil short term projects, for instance.

It’s unsurprising, therefore, that as companies recover from the pandemic, more flexibility in the workforce is an appealing prospect for companies that are unsure about making long-term financial commitments.

The Future of Work survey found that while just 30% of companies currently employ flex workers, a further 30% see it as a fruitful option for the future.

Another scenario being considered by organisations facing uncertainty is the possibility of borrowing talent from other parts of the business.

Cathy explains: “During the pandemic, when the demands on our business changed significantly, we needed more people in customer service and fewer in sales. So, we created a Talent Mobility Hub that allowed us to quickly reallocate staff to another area of the business.

“We’re not the only company to do this – there are lots more companies willing to share talent, and it’s not always just internal. For example, an air conditioning company that is busy in the summer could share its engineers with a heating company that is busier in the winter.”

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“Organisations are now having to look from the outside in and view things from the employee perspective.”

“While just 30% of companies currently employ flex workers, a further 30% see it as a fruitful option for the future.”

Managing complexity

As organisations seek to accommodate the big trends impacting workforces, it will inevitably load additional layers of complexity onto HR teams.

For example, if a company expands its contingent workforce, how will it manage their employee experience? How will they capture information and communicate standards and values?

“In the past, if payroll wanted information on contingent workers, it was often the case that the only data available was how many identity badges had been given out to temporary staff,” explains Cathy.

“Now we’re moving towards a scenario where we need the full data set for contingent workers – to ensure they’re aligned with the culture, that you can help them be their best and support them where you can.”

Of course, as regulations covering contingent workers continue to evolve, companies also need to keep track of this people data for compliance purposes.

“There is a need for flexibility, but legislation like IR35 will make this more complicated,” explains Bob. “We want the ability to tap into freelancers, but you may eventually need to put them on the books. This all adds process complexity.”

So, while flexible work and pay may be appealing to both employees and employers, companies will need systems in place to ensure they have full visibility over all their people, whether they are permanent or temporary. “You can’t manage all this on Excel sheets,” explains Cathy. “Offering flexibility is great for the employee brand but if you don’t have a robust payroll and HR interface, and can’t automate your processes, don’t even start – things happen too fast. You need to have data you can rely upon – you need that single source of truth.”

“We’re moving towards a scenario where we need the full data set for contingent workers – to ensure they’re aligned with the culture.”

People, processes, technology

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Digital maturity

Despite the need for robust systems to support increased flexibility and fluidity, less than 10% of companies claim their HR and payroll processes and systems are automated or integrated. According to The Future of Work study, just 37% claim to have reached a high level of digital maturity in HR, and a further 27% say they urgently need to step things up on this front.

Digitalisation is clearly a challenge for many HR teams, but according to Adam Morris the answer isn’t to go and buy a new technology stack. For him, digital maturity is recognising that you need to address the processes that serve your people first.

“Companies need to look at the root cause of the problem before they look for a technology solution,” explains Adam.

“We commonly see companies that are struggling to scale their payroll efficiently or don’t have oversight across different regions. This is often seen as a payroll issue but when you look closer, the problems tend to originate from the HR data – especially if you have 10 different regions providing 10 different types of data.”

To better serve the needs of HR’s customers – employees, senior management and regional regulators – he advocates simplifying processes and adopting them globally.

Adam says: “The business may be screaming at you to deploy a better system. But you need to look at the whole picture first – what service do you need to provide and what experience will employees and managers be given.”

Better processes also allow for greater governance which is vital if organisations want to integrate systems and increase automation. Charlie Knox, UKI Lead and Director of Product and Solutions at SD Worx, explains that the seamless transfer of data also enables senior managers to carry out more sophisticated levels of analysis.

“HR is having to capture information not just to drive payroll and keep up with legislative requirements, but also to ensure data can be extracted in the right way to benefit from analytics,” says Charlie.

With HR under pressure to ensure data is input in the right way, Charlie says it’s advisable for HR teams to follow the compliance and governance principles that have traditionally guided payroll.

“If you want great oversight, that single source of truth, you first need consistent governance and processes.”

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HR’s Hierarchy of Needs

Indeed, when it comes to putting processes in place to serve customers in an era of fluidity and flexibility, there is broad consensus that the one function HR needs to address before anything else is payroll.

According to The Future of Work survey, ensuring smooth, efficient payroll calculations and payment is, by far, the biggest concern for HR professionals. This topped the list of 19 possible HR priorities in 8 of the 11 countries surveyed – including the UK.

Less than one in five (18.2%) said they were happy with their current function and 70% are actively trying to set up a more efficient process. This is clearly an area of concern - particularly when you consider that without the solid foundation that payroll provides, HR will always struggle to perform more strategic functions.

“If you’re not paying people on time, you can do all the work on culture and values that you want but it won’t matter,” explains Katie Jacobs. “If you don’t have this sorted, you don’t have the legitimacy to play in those exciting spaces.”

This was especially true doing the pandemic when people were worrying about their livelihoods. “Mental health and employee wellbeing issues went through the roof during the lockdown, which was obviously a big concern for HR,” says Bob Rehill. “But if you want to look out for people’s wellbeing, you need to get their pay correct first. Mental health can be influenced by financial wellbeing.”

Payroll information also touches so many elements of HR, whether attracting, on-boarding, developing, rewarding or retaining talent, that it’s become hard to separate the technology supporting both functions. This hasn’t always been the case though.

“In the past, I’ve been asked to look at companies’ HR functions and been told that payroll is out of scope. That has amazed me because it’s the most critical element,” says Adam Morris. “It’s like Maslow’s hierarchy of needs. It might not be the most interesting aspect of HR but it is the most fundamental, sitting at the base of the pyramid.”

While the origins of payroll and HR technology platforms are distinct, it’s become increasingly necessary to integrate the data within these two systems – especially when employees and senior managers want to see the impact of any change of circumstances, they need to access that data in real time.

People, processes, technology

“If you’re not paying people on time, you can do all the work on culture and values that you want but it won’t matter.”

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“Payroll is not a once month function anymore,” explains Charlie Knox. “It used to be the case that you needed a mainframe computer to run payroll calculations, and you would only be given access to results once or twice a month to process pay – but the technology has moved on.”

He adds: “If HR teams want to review data and make decisions relating to headcount, talent management, cost of absence, etc., they can do that at any time. For example, when you want to calculate absence related pay for an employee to allow them to manage in unexpected situation, integration with payroll means you can do it instantly, delivering quicker visibility to the colleague and helping deliver a more responsive service.

“The expectation now is that HR can provide the means to self-serve, to see cause and effect of actions in an interactive way.”

When developing a digital infrastructure to support the modern HR function, it is crucial that your tech stack of choice has payroll at its heart and can deliver the data needed, whenever it’s required.

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“It’s like Maslow’s hierarchy of needs. It might not be the most interesting aspect of HR but it is the most fundamental.”

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Reinventing HR

While cultural changes had already encouraged companies to embrace more workforce fluidity and flexibility before the pandemic, national lockdowns have accelerated this shift.

As businesses come to terms with this rapid change and the level of digitalisation it requires, we’ve seen the status of HR rise – in some cases to board level. HR is now required to provide the answers to uncertain employees, satisfy the needs of regulators and even help business leaders to transform their organisations.

The role of HR has been reinvented. It is no longer the personnel administration department. Expectations of what HR can and should offer are now much higher. Without strong processes and technology, however, it will be

impossible for HR teams to keep everyone happy. To meet the complex demands placed upon it and provide the employee experience now required, digital maturity is a must.

What has also become clear is that any digital infrastructure supporting HR must be built upon the payroll function. Payroll remains the common denominator that touches everyone and influences almost everything in HR.

Only with this solid foundation will HR have the strength required to flex to the needs of its workforce, enabling new ways of working and embracing change.

Conclusion

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Book your free HR Solutions Analysis.

SD Worx delivers people solutions across the entire employee lifecycle, from paying employees to attracting, rewarding and developing talent. More than 70,000 organisations worldwide place their trust in SD Worx and our 75 years of experience. We’ve used our principles in delivering award-winning payroll solutions and services to respond to the challenges and goals facing HR and business leaders, to deliver the right end-to-end experience for your people.

We offer a free, non-committal review of your current HR and Payroll operations, and a tailored report highlighting the benefits and efficiencies of moving to a true end-to-end People Suite. Because when the nature of work is changing faster than ever, your people need a new perspective.

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Cathy Geerts Chief HR Officer at SD Worx

Cathy has 20 years of experience in the HR world. She started her career as an Employee Benefits consultant, first with insurance broker Van Breda Risk & Benefits, then with AON Consulting. Afterwards Cathy went through various HR positions at Umicore, Nyrstar and Alpro. Since 2014, Cathy has been working at SD Worx. She started as HR Manager in Talent, Reward, Operations & Analytics. In 2017, Cathy became HR Director for SD Worx Belgium. In 2019, she joined the SD Worx Excom as Chief HR Officer.

Katie Jacobs

Senior Stakeholder Lead, CIPD and business journalist

Katie Jacobs is an award-winning business journalist and editor who specialises in the world of work. She was previously editor of HR magazine and has written for newspapers including the Times and the Financial Times, as well as for business magazines including People Management and Management Today. She has spoken about the world of work and the HR profession at numerous events for HR and business leaders and been interviewed for national media and radio. She is also currently senior stakeholder lead at the CIPD, the professional body for human resources and people development. She is responsible for the CIPD’s relationships with HR leaders, building a stronger community and designing and delivering a robust proposition for this group.

Contributors

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Adam Morris HR Transformation Consultant at Lace Partners

Adam Morris is a specialist in HR Operating Models. He supports clients to develop their service offering, ensuring that HR adds value and helps the business achieve its goals. His particular area of focus is payroll, and he leads the payroll community within LACE Partners. He has experience of both transformational and operational HR, and has worked with clients from across a range of sectors – from financial services to technology.

Charlie Knox UKI Lead and Director of Product and Solutions at SD Worx

Charlie Knox has worked at SD Worx for nearly a decade and a half, currently as Director of Products and Solutions as well as the UK and Ireland lead. During his time working in the HR and payroll industry, Charlie has worked with large businesses on multiple transformation projects. Charlie has keen product development knowledge and is used to delivering solutions with his unique knowledge of HR and payroll product ecosystems. Charlie’s strengths include working on Technology strategy, Product Management, Software development and IT security.

Bob Rehill

Business Change Consultant and Founder of Bob Rehill Associate Network

Bob Rehill is the Founder and CEO of Bob Rehill Associate Network, a global network of trusted independent associates specialising in the supply of people resources for Transformation Projects and Programmes. The Bob Rehill Associate Network brings an alternative option to traditional resourcing approaches, providing highly experienced and business focussed transformation, projects and programme professionals. With over 20 years of experience, Bob is unique in his ability to firstly understand and deliver the right resources, and his continued practice of hands-on delivery, coupled with his equally experienced and trusted network, are the perfect combination for any organisation looking for help in managing and driving through change and transformation.

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