Staff shortages are a Europe-wide challenge due to an ageing population. Not enough young people are entering the workforce to replace those who are retiring. The situation is only expected to get worse over the next generation or so, with 35m retirees across Europe predicted to leave employment by 2050. This impending skills shortage means international companies must align the needs of their employees with their HR functionality, prioritising a digitalised workplace.
The result is a difficult labour market in which employee demands are increasing. Since the pandemic’s end, staff have been thinking about work in new ways, such as asking for more flexible arrangements and a better work/life balance.
According to the BusinessEurope lobby group, this issue is also exacerbated by structural skills mismatches and education systems that are inadequately geared to labour market requirements. The upshot is that companies across Europe are all fishing in the same pond as they try to hook a limited supply of talent.
As a result, some employers at international businesses are starting to adopt a more people-oriented HR approach in a bid to attract, engage and retain talent more effectively. As part of this move, they are exploring how best to use technology to improve the employee experience. Supporting workers in becoming more productive and efficient is another important aim.
The digital workplace’s role in talent retention
In HR tech terms, most international companies have so far concentrated on automating transaction-based, operational workplace activities, such as payroll, time and attendance, and core HR. But some have also started focusing on more strategic people issues, such as enhancing the employee experience.
HR software and services provider SD Worx studied the importance of digitalisation in this changing world of people management. Its report, ‘Building a strong digital workplace: 4 steps,’ examines how companies can find the perfect match for digital workplace tools. It revealed that nearly half of European staff are more likely to choose to work for an organisation that provides them with new digital workplace tools. Over 16,000 employees and nearly 5,000 HR leaders from 16 European countries, including the UK contributed to the research.
By way of contrast, one in three workers said a poor digital workplace experience would cause them to leave their current employer. A large majority – and the under-35s especially – also indicated that workplace digitalisation had made their job more meaningful and pleasant. This is a particularly important consideration when growing numbers of employees are experiencing mental health issues and burnout.
Lorenzo Andolfi, HR adviser at SD Worx, says: “Technology can help by automating tedious tasks. It means that people are able to focus on the things that matter, which in turn boosts engagement.”
How to enhance employee experience
Companies looking to improve retention by introducing digital workplace tools need to optimise the usability of their systems (21.1% agreed). Ensuring the entire HR tech stack provides a familiar interface and wider user experience helps achieve this.
Just as important is ensuring that all the information employees need is right in front of them without needing to click repeatedly to find what they want. Displaying only the most important and frequently used functions to prevent information overload is another consideration.
A second possible approach to improving employee experience, meanwhile, is to introduce best-of-breed, people-oriented applications (23.4%) that can help foster professional growth, engagement and productivity.
“We’re seeing a shift towards more employee-oriented tools,” Andolfi says. “Since Covid, there’s been more of a focus on employee wellbeing, which when compounded by global labour shortages means this kind of software is now catching the attention of employers.”
Such applications cover important people-focused areas, such as learning and development, employee listening, and on- and offboarding. But technology alone is not enough. To be truly effective, it needs to be part of a wider, long-term vision for cultural change. The organisation must also already benefit from a certain level of digital maturity.
The power of technology integration
Other important considerations to help boost employee experience include integrating relevant software into the employees’ workflow in order to make it part of their standard way of operating.
Such applications should also be integrated with existing operational systems or else, ironically, they may risk damaging the employee experience in other ways. Potential problems here include tech fatigue and overload as staff end up having to learn and use too many disparate applications.
Despite the importance of such integration work, a mere two out of five European organisations today believe they have succeeded in hooking up their HR systems either fully or at a high level.
Their key driver for doing so is improving the organisation’s digital experience (36.7%). Second on the list is connecting data for better reporting (38.9%). Third is speeding up data processing to boost efficiency (37.9%).
“It gets to a certain point and international companies simply can’t deal with a fragmented tech landscape anymore, not least as technology is evolving so fast that employees and companies can’t keep up,” Andolfi says. “So, they have to rethink what they need and ensure all their tools and apps can integrate seamlessly to ensure the business is future-proofed.”
The cultural and technological change required to ensure a great, future-ready employee experience can be expansive. But doing so offers significant benefits too, Andolfi says.
Not only will it make international organisations more efficient, productive, customer-friendly and, ultimately, more profitable, but it will likewise support them in becoming more agile and dynamic in essential areas, such as staff planning and deployment. This, in turn, enables them to become more adaptable in the face of ongoing change.
Finding the right HR digitalisation partner
One of the key success factors in being able to reap the benefits of these initiatives is to find a perfect match for the business in terms of an HR digitalisation partner. Doing so is invaluable in that it will help mid-sized international companies align the needs of its employees, the HR function and the organisation to optimum effect.
Before these multinational companies can identify the right partners though, they must clearly define their HR strategies and objectives.
Andolfi says: “If digitalisation is the answer, what is the question? What are you looking for, what problems and challenges do you want to solve? If you don’t know, you’ll end up in reactive mode, purchasing tools and applications that won’t deliver the right impact.”
The second step is to research which technology can help you achieve these goals, and how it can do so.
“You want something that will be the answer not only to today’s issues and problems but to any challenges in the future,” Andolfi says. “Look for technology that can be adapted to your future needs and the changing needs of your users too.”
A third, vital consideration is finding an HR digitalisation partner with whom to build an effective long-term relationship. The most important factor here is cultural fit. “You need a partner that you can trust and that really understands you and your business,” Andolfi says. “The idea is that they’ll grow and evolve with you into the future and work cooperatively with you to achieve your business goals.”
Identifying a potential partner’s added value
Such partners should not only have broad and deep industry expertise, but they should also be able to demonstrate suitable client references and appropriate case studies, to enable partners to gauge the opinions of other customers. Being able to show a commitment to innovation is likewise of prime importance.
“You want a strategic partner that has innovation in its DNA so that as the relationship evolves and develops over time, you know they’ll be doing what they can to provide the best solutions for you,” Andolfi says.
Meanwhile, a final issue to think about is cost – but this should always be balanced against the added value that prospective software suppliers can offer. Value in this context includes providing access to easy-to-integrate, composable applications. These modular components make it possible to create a tailored, flexible and secure employee experience system, with elements that can be switched in and out as necessary.
But companies must avoid overpromising. “Across Europe but in the UK especially, there’s an overload of technology providers, which leads to huge amounts of overpromising,” Andolfi says. “If you hear promises that are too good to be true, that’s a red flag.” The same theory applies to pricing. “If it’s a bit unclear what they’re charging you for and things aren’t as transparent as they could be, that’s another red flag,” he says.
This notion of transparency is crucial once the contract is in place and as the relationship develops and grows.
“You need to be open with each other and work together to meet the needs of your employees, HR and the business. But you also need a partner to help you evolve and one that will point you in the direction you need to go in the future,” Andolfi says.
As businesses digitalise their workplace, they will better meet the needs of the talent they hope to attract, thereby preventing skills shortages and labour gaps. Not only will this improve the business’ efficiency, but the introduction of a technology-enabled workplace will improve the employee experience, thereby ensuring greater retention of talent in the process.
