The low preoccupation of companies in Romania regarding the digitization of HR processes only confirms Romania’s last position in the top of digitization in the European Union, according to the European Commission (EC) report on the Economy and Digital Society Index – DESI 2018.
The HR departments claim that they are not too willing to change and modernize, although digitization and automation are replacing existing skill sets at a rising pace. In the context of the Romanian market, 60% of the companies did not make the digital transformation a central part of their business strategy and only 4 out of 10 companies consider digitization a priority, according to Valoria’s “Barometer of Digitization”.
Here is what the study “Trends and Challenges in HR 2018”, conducted by Valoria in partnership with Business Mark, reveals about the digital vision of HR functions in Romanian companies.
A decrease of automation of HR processes
If 59% of respondent companies say they use software to manage their human resources, 53% use software for clocking (compared to 60% in 2017) and 50% use payroll software (compared to 55% in 2017). Only 25% use employee performance management software, 16% have software for recruitment, and 13% have software for managing compensation and benefits programs. Interestingly, these percentages have fallen since last year, although we are talking more about enterprise digitization, and HR processes are at the center of each organization. A rising percentage is 19% for software for employee management and training, compared with 13% in 2017.
We also notice in 2018 the same tendency of companies to use specific IT solutions that address a particular process individually (such as payroll, etc.) without integrating these processes into a more unitary, efficient approach This would be a key component in the transformation process to the digital enterprise of the future.
Half of the companies see a positive impact of HR technology
Like last year, in the 2018 edition, half of the respondents say that existing recruitment management systems/processes have a positive impact on the company’s ability to deliver an efficient HR and 37% in 2018 compared to 40% in 2017 believe they have no impact. Interestingly, 13% of companies believe that the use of HR technology has a negative impact, compared with 9% in 2017.
Of responding companies, 44% in 2018 compared to 47% in 2017 believe that HR technology is of increasing importance for measuring Human Resources performance, 37% this year versus 28% last year is undecided or I think it’s just somewhat important and 12% compared to 19% consider that it is a key element of critical importance.
Artificial Intelligence in HR, now or over 10 years?
Although globally the trend for automating routine/repetitive tasks through artificial intelligence is increasing, only 25% of Romanian companies in 2018 compared to 30% in 2017 believe that the period in which technologies such as artificial intelligence and process automation will be sufficiently advanced to influence the HR function is in the next 2-5 years, whereas 13% compared to 8% say that this is happening right now, and 19% compared to 17% expect this period to be the next 6-10 years.
44% of companies believe that artificial intelligence is one of the most important trends that will significantly change the function of HR, while 38% compared to 47% in 2017 consider mobile and social media applications a trend that enhances the HR function.
HR digitization budget
Nearly 7 out of 10 companies say they have roughly the same budget as last year for the digitization of HR, 7% increased this budget by more than 20% in 2018 and 6% had an increase of less than 20%. However, for 12% of companies, this budget declined in 2017 by more than 20% compared to last year, while 6% had a decrease of less than 20% in this budget.
A possible explanation for the loss of interest in the digitization of HR processes can be found in the current economic and political context in which 27% of companies say they do not invest in their business in the second half of 2018 compared to only 18% in the first part of the year, says Valoria survey “Business Evolution in Romania in 2018”.
But in this constant battle for market talent, companies exploiting technology to maximize the potential of data in their human resources systems are likely to win. How do we prepare our employees for future jobs if we do not have an HR tailored to the future?