HR Systems: Where do we stand in Germany?

To mark my one and a half years’ anniversary at Frazer Jones, I am happy to introduce my first reflection on the digital and tech trends within the People function - in my opinion, one of the central business functions in the modern people and culture-oriented era. 

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As a millennial, I am fascinated by modern technologies, digital innovations, Artificial Intelligence (AI) and Machine Learning (ML) of today and the leaders who are driving organisations towards a more automated and efficient future. We are encountering these buzzwords daily from our network and seeing them across many recent trend reports across all industries, from public services to retail and manufacturing. These are not only representing technological progress but also indicating people trends, impacting businesses’ everyday routines, those who run the organisations and those who work for them. In this context, a fundamental question has been recently raised by the global HR community, which stand should HR take in this transformation process? 

In the latest KPMG report “The Future of HR 2019: In the Know or in the No” one can find the following quotation of Vishalli Dongrie, Head of People & Change at KPMG India:

“The next-generation HR function has an essential role to play, replacing traditional ‘best practices and cost-cutting’ approaches with bold new strategies, structures, tools, processes and metrics.” 

What are these new tools and metrics of the people function driving digitalisation, tech affinity and change to an innovative mindset among employees? How advanced are the HR leaders within this process in Germany? What new skills and competencies are essential for HR professionals of the future? How are we developing them in the German market? 

These are some of the questions I would like to investigate in my coming series of market commentaries devoted to tech and IT-related topics in HR. Due to the broadness and complexity of this discourse, I aim to break it into smaller sub-topics and plan to present them topically on a regular basis.

Today I would like to address one of the most crucial, and for some HR professionals, also troublesome subjects of e-HR transformation in Germany – HR Systems.

Workforce management solutions

When it comes to workforce management solutions, there are several terms that are regularly used such as HRIS, HCM and HRMS. They have a similar function but the difference between them is so indistinct that we have used the general term ‘HR Systems’ in this article. 

Every candidate and business that I have spoken to on the topic recently has either just finished integrating an HR System, is currently in the selection process or has been unsatisfied with a previous system and is therefore implementing a new product or a combination of several solutions. HR System integration can take years, depending on its functionality, scale and the size of the organisation. HR Software presentation stands are popular at specialised HR conventions, such as UNLEASH or Zukunft Personal and international IT innovation exhibitions like CEBIT. Performance management systems, applicant tracking software, employee satisfaction apps, e-learning solutions to name a few are some of the systems on offer, tailored for large corporations, medium business and small start-ups – this market is vast and segmented. HR managers are spending months, if not years, trying out various products, considering what would fit their organisation, their budget and then attempting to assess if it would be comprehensive and user-friendly enough once launched.   

According to the aforementioned KPMG survey, which included opinions from around 1,200 HR executives, they quote that “recent and projected technology investment has been highest for cloud and human capital management software: 49% of HR executives invested in HCM over the past 2 years; 32 % in cloud capabilities”. The most interesting stat here for me is the 51% who are not investing into HR Systems and who are still managing the whole employee cycle supposedly more manually. 

How is this being handled in Germany?

In order to investigate this topic further on a local German scale, Frazer Jones, together with the German Federal Association of HR Managers (BPM, Bundesverband der Personalmanager) organised a joint event in Q3 2018, offering several discussion rounds on the topic “HR Systems in a Reality Check”. The ultimate goal was to create a platform for HR strategists and specialists to share their experience on various HR Systems, potential challenges that they may be facing and exchange ideas for improvements. In attendance was a group of 30 HR professionals, across both generalist and specialist functions, discussing their successes and failures in applying different software solutions in personnel management, recruiting and personnel development. 

One of the positive outcomes of this event was that all participants were using designated HR Systems for at least one HR process. We surveyed all participants asking them how satisfied they were with these systems. No one among the participant was happy with the HR Systems in use, 43% were “satisfied”, 48% “rather unsatisfied” and 9% admitted being really unsatisfied. The main reasons mentioned were relatively homogenous: user-unfriendly, not intuitive enough, no interface to other tools and offers little room for customisation. By the end of the event every participant agreed on one point – there is a need for one single tool designed for all relevant people data throughout the whole employee cycle. 

Practice Insights

To expand on this topic further and to explore what opportunities the current HR tech landscape is offering, I asked some of my contacts (all HR decision makers) about their experiences and view on the future of HR Digitalisation in Germany. 

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Frank Rohde, Director of Strategic Business Partnering at Adobe Systems Engineering, who is encouraging a more data-driven and automated approach within People function, shared the below with me: 

1. What HR System(s) are you currently using?  
Workday & additional self-made tools.

2. How satisfied are you with the current HRIS landscape? 
Fairly satisfied. 

3. What challenges are your organisation currently facing in the context of HR digitalisation? 
It takes time to do that and to get all data strings together. Also, the data protection topic is important and needs extra care. Using AI for People Topics is at an early stage and legally tricky.

4. As an HR leader, if you let your imagination run wild, what ideal HR System would you wish for? 
1 tool for all processes that has HR intelligence at a fingertip and is easy to use – even for people manager.

5. In your opinion, what are the future topics for HR Systems in Germany?   
Talent Management connected with AI.

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Another respondent, André Venzlaff, HR Manager Central Europe, Middle East & Africa and Sr. HR Business Partner EMEA at Polycom, also wishes for a single integrated digital solution simplifying the process across geographies and connecting people data to relevant social media: 

1. What HR System(s) are you currently using?  
Workday and then Success Factors.

2. How satisfied are you with the current HRIS landscape?
Happy with the current set up, working very well.

3. What challenges are your organisation currently facing in the context of HR digitalisation?
Recruitment just to provide everything digitally across EMEA. 

4. As an HR leader, if you let your imagination run wild, what ideal HR System would you wish for?Something like Google or Apple that connects everything on your smartphone. 

5. In your opinion, what are the future topics for HR Systems in Germany? 
Combine social media with data.

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Conclusion and Outlook

Thanks to modern technology and long strings of code, every aspect of the employee cycle, whether it is time management, controlling or performance management, can be automated and simplified by means of an HR Technology Solution. We find smaller players like TalentSoft or Personio and market giants like SAP, Oracle or Workday – some of them offering specialised suites focused on certain HR operations, whilst the others aim at a more all-round comprehensive set-up. To date, there is no unique system which would cover the whole cycle with all necessary functionalities and an intuitive user interface. 

Organisations are still having to source the most suitable solution available in the market and then either build their own systems internally for the missing aspects or try to find an additional provider externally and hope it would communicate with their main system without any issue. This process can become frustrating at times and is not necessarily guaranteed to optimise the workload, neither accommodate an introduction of new tools like AI based Talent Management without making internal data cycles even bulkier. There is, therefore, a clear need for intensifying the dialogue between Tech and HR to foster a fellow feeling for the crucial importance of one another in the modern business realities.

Considering how diversified and vital this topic is, I will be launching a survey in the coming months to carry out a more comprehensive and detailed analysis of HR Tech landscape across various industries in Germany. I hope to hear your thoughts on this. 

How far is your organisation in the HR Digitalisation process? Are you noticing any influence on your recruiting needs in the light of these developments? Please feel free to reach out to me at ekaterinaiankovskaia@frazerjones.com or via LinkedIn. I’d be very keen to hear your thoughts and look forward to connecting.