How HR can make the most of cloud-based HCM
In recent years, there has been much chatter about the value of HR taking advantage of cloud-based technology. Now, in a new survey from PwC, more than 500 high-level U.S. business executives have offered a mainly positive outlook on how cloud computing could affect their business prospects. And the most optimistic executives reside in HR.
PwC’s U.S. Cloud Business Survey, conducted between May 5-12, found that a majority (74%) of business leaders are engaged in cloud strategy and 56% of executives see cloud as a strategic platform for growth and innovation. CHROs most often define cloud as central to business strategy and critical to revenue growth (39%), compared with 28% for all executives.
Less positive is that more than half (53%) of those surveyed say they have yet to realize substantial value from their cloud investments.
“CHROs need to be prepared to transform their processes to achieve the full value from cloud HCM,” says Dan Staley, PwC’s HR technology leader, adding that PwC has found that HR organizations that moved 75%-100% of their processes to the cloud are twice as satisfied (47% highly satisfied compared to 26%) as those that changed 25% or less.
Currently, C-suite executives, including the CHRO, have a high degree of shared responsibility around cloud transformation. For example, 79% are involved in cloud strategy decisions. Staley says successful cloud transformation requires commitment from business leaders.
“We know cloud HCM delivers results,” he says. “When we’ve studied the effectiveness of cloud versus on-premise solutions as it relates to increasing process efficiency, those using cloud HCM reported that it was over twice as effective (44% compared to 18%).” Initial steps to a transformation, he adds, include building a business case, evaluating cloud HCM solutions and assessing deployment options.
Staley says CHROs are laser-focused on attracting, upskilling and retaining talent, and cloud solutions are delivering in that area—along with improving the employee experience and providing better workforce insights in a more timely manner. He adds that 70% of CHROs value the ever-expanding capabilities delivered with the cloud, allowing them to be more agile. Half also cite that being able to deploy these new capabilities without as much dependence on IT is another big upside.
When it comes to the cloud’s impact on the HR function, 40% of CHROs say cloud HCM will enable data-driven decision-making; 32% say it will support employee flexibility; and 31% say it will streamline and simplify processes. Meanwhile, CHROs’ top barriers to cloud value? Lack of ability to keep executive stakeholders engaged (62%), lack of tech talent within the company (61%), inability to measure value (60%) and governance challenges (60%).
“Concerns are typically around the abilities of the products to be tailored to unique business requirements and/or getting buy-in from executive stakeholders to adopt new ways of working alleviating the need to ‘customize,’ ” Staley says.
Finally, Staley says, given the cloud’s significant role in changing how business is done and how people work, employers could be facing a future of corporate “haves” and “have nots” when it comes to the tech and cloud fluency talent needed to compete. He explains that one of the benefits of cloud/software-as-a-service HCM applications is the fact that new releases, often packed with features, are pushed to customers multiple times a year.
“HR execs need to develop consultative skills on their teams, so they are able to quickly evaluate how to take advantage of these new capabilities and deploy them in an agile fashion. Companies can bridge the gap by digitally upskilling all employees,” he says. “For example, you can start with cloud training that’s designed to work with a cloud vendor’s certification program or consider mentorship opportunities where junior talent is paired with more experienced IT employees.”
Other findings for CHROs and human capital leaders include:
- A new digital talent divide is emerging, affecting both tech and business roles. Fifty-five percent of CHROs predict the cloud’s biggest impact on their business will be changes to processes and ways of working.
- About 44% of CHROs are concerned about attracting cloud professionals, and 42% worry about retaining their cloud talent.
Respondents were from public and private companies in seven sectors: industrial products, consumer markets, financial services, technology, media and telecommunications, health industries, and energy and utilities. Ninety-three percent of respondents were from Fortune 1000 companies. Executives surveyed included CHROs and human capital leaders; CIOs, CTOs and CISOs; CFOs and finance leaders; risk management leaders, including CROs and CAEs; COOs and operations leaders; corporate board members; and tax leaders.
To learn more about the future of cloud in HCM strategy, CLICK HERE to register for HR Tech.