The days of the ‘traditional’ workforce are becoming a fading memory as SMEs evolve. To operate in a lean and efficient manner, and achieve the agility necessary to navigate treacherous waters, businesses are having to build greater flexibility into their employment models.
The evolving dynamics of the modern workforce create challenges and unless human resource and payroll departments adapt, the business could be left behind. Technology can certainly help modern SMEs to improve their HR and payroll operations, but as always, addressing the challenges requires an understanding by HR leaders of the issues at hand.
The modern workforce
The modern workforce is no longer comprised of a fleet of 40 hour-per-week employees who commute from their homes to the office and back again each day. Today’s employees exist in several different capacities – full time, part time, mobile and contingent. The latter, also known as freelancers or contractors, is becoming a larger percentage of many organisations’ workforce.
True contractors, while not considered employees, still need to be managed as if they are. They must be considered as a part of a company’s total workforce, especially when assessing strategy and allocation of resources. This is more an issue for human resource departments, versus payroll. The use of contractors is highly beneficial and allows a company to scale their workforce up or down as needed to best suit their business goals and current market conditions, affording them flexibility and agility. Despite their non-permanent status and affiliation with the company, they must be considered and assessed as part of the total workforce. Many organisations run into difficulties when trying to maintain and manage them as a separate entity and resource.
Rise of the mobile employee
Face-to-face time with employees is becoming a thing of the past. Today’s workforce is growing much more mobile. For many industries, often an employee can capably work from any place if they have a phone and internet connection. Increasingly, they are able to achieve both with a single device, which can create challenges for HR when it comes to management of these employees. While most people aren’t going to try to generate copy or reports on a mobile, mobile phones are allowing people to take care of business just about anywhere, at any time. One HR manager at a client SME reports she spends part of her morning commute approving leave and other requests right from mobile phone, using an app that is part of her company’s cloud-based HR and Payroll software.
Yes, allowing employees to work from anywhere, ideally their homes, can be a double edged sword, but when managed properly, the bottom line benefits are real. Companies do not have to invest in infrastructure to support these workers – space, desk, phone line, network connections and electricity to power it all – which results in leaner operating costs.
A challenge, however, is assessing their productivity and ultimately, value to the company. In many industries, productivity can be hard to measure. If a person is working from home, and brainstorming an idea for a new product or strategy, while laying on their sofa, is that still considered productive? HR must rely on their ability to select and hire employees that, in addition to being actual contributors, are trustworthy and can handle the responsibilities of their role when there isn’t hands on supervision. While many can handle this, some cannot, which makes management of this part of the workforce potentially difficult.
Another challenge facing HR with the mobile workforce is liability. Is the workplace responsible should an employee slip and fall, in their own home while they are working? What about if they should develop chronic back pain from sitting in a dining room chair, instead of proper desk chair? In many countries, rules and regulations place the onus of responsibility to maintain a proper and safe work environment squarely on the employer. However, the rules become much more complicated when they have little to no oversight into a work-from-home employee’s workspace. HR leaders must carefully weigh the pros and cons of each mobile worker and the potential for liability on situations over which they may not have control.
International Remote/Branch Offices
Today’s workforce is not only spread throughout a city or region, but across countries and continents. This introduces risk and compliance issues about which HR must be aware and adherent. The regulations governing the handling of employee and customer data, especially in regards to privacy, vary from country to country. For instance, in a company headquartered in Australia, with branch offices in Singapore and the United States, HR must be aware of the local laws and regulations within each of those countries. In addition, they must also make sure that those branch offices operate within compliance of those local laws. A privacy regulation that may not be enforceable in Australia, but is in Singapore, can still result in the Australian entity being held liable for a violation in another country.
Whereas many companies aim to diversify their product portfolio and the markets they serve, today’s modern companies must also place value on their corporate culture and diversifying their workforce itself. Diversity exists in many ways – from a wide age range among employees, to ethnicity, cultures, values and orientations – and it is in an organisation’s best interest to embrace diversity and consider it very much a business tool.
To maintain diversity in the workforce, HR must also understand how the different groups work and think. Some older employees, such as from the “baby boomer” generation just want to work hard, get their jobs done and collect a paycheck. To them, a job is a job. On the other hand, many of today’s millennials prefer to feel a part of their company and greatly value the notion that they are contributing to the greater good of the world at large. This causes this group to take into consideration the fundamentals of the company itself.
Diversity and having a wide range of people from all walks of life working towards a common goal is extremely beneficial to the company. Today’s more successful HR departments embrace the diversity of their workforce and even celebrate it. When executed properly, it spawns creativity, learning, a stronger knowledge base and ultimately, greater agility for the organisation. SMEs that remain agile are also adaptable and therefore capable of reacting faster to market changes, etc. In many ways, it can be concluded that diversity creates stability.
At the end of the work day, it really all comes down to understanding the challenges at hand, and also understanding the organisation’s workforce assets. Once an understanding of the resources as a whole and their capabilities are gained, managing them to be in a position to be successful, stops being a possibility and becomes a probability.
About the author
Marjukka Mäki-Hokkonen is the President (ANZ) of NGA Human Resources, a provider of HR operations and payroll solutions