In the west, digital HR has become a booming business, with companies constantly seeking ways to improve operational efficiency but more importantly, increasingly recognising the strategic value HR can provide, when empowered to act as a partner of the business and the importance of greater investment in the number one asset of any organisation; its people. Things have progressed immensely in the last decade and in such a highly competitive marketplace today, technology plays a pivotal role in helping organisations to deliver the strategic HR agenda.
Over the last few years, Asia has followed the trend and has also been building a strong industry within the HR technology space.
So, what about Africa?
Africa is a large, diverse continent with 54 markets and a population exceeding 1 billion. In recent years, there have been various reports discussing how Africa is rising and becoming a hot spot for investment, business and technology, but what is their approach to harnessing the power of technology to support one of the most critical success factors of any company – people?
The Deloitte 2017 Global Human Capital Trends highlights digital HR to be growing trend in South Africa.
But, how about the 53 other countries which make up the African continent?
Well, firstly, it would be wrong to view Africa as one entity as each country has its own identity, readiness for technology, business drivers and of course, challenges. Therefore, this article focuses on Kenya. In future articles, other African countries may be explored.
Kenya is a key player in the East Africa region; the port of Mombasa and land borders with Ethiopia, South Sudan, Uganda, Tanzania, and Somalia make Kenya the primary gateway to East Africa. World Bank predicts that “Kenya’s Medium-term GDP growth should rebound to 5.8% in 2018 and 6.1% in 2019 respectively, depending on the completion of on-going infrastructure projects, the resolution of slow credit growth, and the strengthening of the global economy and tourism.” This level of growth is notably one of the highest in Africa but also the world. The report also acknowledges that “Kenya’s youthful and growing population, dynamic private sector, highly skilled workforce, improved infrastructure, a new constitution, and pivotal role in East Africa, give it the potential to be one of Africa’s great success stories.” Consequently, these factors present a significant opportunity for further business growth and investment.
In 2016, I spent some time in Kenya, talking to business and HR leaders about the potential of technology for HR. It was very apparent that there was some interest but little action being taken. Much of this was attributed to lack of knowledge, leaders not viewing HR as a strategic partner and cost of investment.
So, before exploring the specifics of digital HR, let’s consider how Kenya views technology in broader terms.
Technology in Kenya
Kenya is positioned as one of Africa’s most innovative technology hubs – This report by TechCrunch reveals that “innovation hubs have become a mainstay of Africa’s emerging technology ecosystem. Scratch the surface of the continent’s information and communication building blocks and you’ll likely find connections to a tech space. More than 150 start-ups have launched out of Kenya’s iHub.”
Disrupt Africa’s African Tech Start-ups Funding Report 2017 noted that “African tech start-ups raised funding in excess of US$195 million in 2017, up 51 percent on 2016… South Africa, Nigeria and Kenya were the top three destinations for tech investors in 2017.”
These factors paint a general picture of technology in the country and show that there is clear potential to consider using technology to enhance various situations, including the workplace. However, to consider Kenya’s readiness for being poised to fully embrace digital HR, one must look much deeper below the surface.
To answer the question more fully, let’s look at a few other factors pertaining to HR and the wider business. In preparing the following answers, I reached out to two well-respected and trusted in-country advisors;
Stewart Samkange is SAP SuccessFactors’ East Africa Director and has previous experience working with IBM, Microsoft and Oracle. Stewart works with senior business and HR leaders, so is able to provide a good overview of the current market, and shares his experiences working with clients and prospects in the current Kenyan market.
Emily Kamunde-Osoro is a Leadership Coach & Director at Rise and Learn, an HR & leadership advisory practice. Prior to setting up Rise and Learn, Emily was HR Director at Jubilee Insurance, a well-known and respected business within East Africa. During her time with Jubilee, Emily commissioned a digital HR transformation. Emily shares her insights, industry knowledge and experience of working with business leaders at all levels.
To what extent are organisations using technology for HR?
Stewart and Emily echo a similar view to what I concluded when I visited Nairobi in 2016 and Stewart conveys it well by expressing that “there is a luke-warm reception when it comes to digital HR – there is some interest but very little action”.
Traditionally, where companies have implemented solutions, it has predominantly been to support core HR process and payroll; little has been invested in supporting the softer side of HR, such as recruitment, performance, talent, learning & development.
Many multinational and large organisations have some form of HR technology in place but there is now a growing interest from SME businesses too and this movement is starting to gain momentum, primarily driven by the following influences:
- Millennials are different and beginning to challenge the status quo when it comes to development, growth and opportunities.
- Attracting and retaining top talent is becoming increasingly crucial, as the marketplace becomes more competitive.
- The financial and telecommunication sectors, in particular, are facing growing pressures, prompted by disruption of new FinTech start-ups and better benefits being offered by cross-sector competitors. Leading organisations in these sectors are beginning to realise the importance of talent management and building proper succession plans.
- Concerns around sensitive data leaks and security breaches have put HR data on the radar of CEOs and CIOs, who are demanding more rigor around data privacy.
- Companies are under increasing pressure to show diversity statistics and demonstrate to the people that they are representing the full ‘face of Kenya’ (i.e. equality between tribes and ethnic backgrounds).
- Disruptive thinking and challenge; e.g. people don’t necessarily need to be in the office, how can HR support the business to achieve its objectives, big data & the power of analytics, opportunities to up-skill the HR community to make more of a difference.
Oracle and SAP offer top-tier solutions and their cloud-based technology solutions are becoming more affordable than traditional on-premise versions. As such, these solutions are also becoming attractive to SME businesses, as well as the larger enterprises. However, the cost is a major factor that comes into play when considering any technology investment and many businesses will opt for a cheaper local solution, such as PERPAY. Solutions from India also have a growing presence in the marketplace, due to their affordability.
Where in the past, technology has really only been implemented by the larger or multinational organisations, a recent shift is that more SME businesses, across the board, are becoming much more open to the idea of technology, with an increasing appetite to start doing things differently and thinking outside the box. These SME businesses (circa 200+) are challenging the norm and are able to make much faster decisions than the larger business.
Rise and Learn offer outsourced core HR solutions for smaller companies, where implementing and managing their own technology may be too expensive. Outsourced services are growing in popularity among the smaller businesses, as it enables them to start embracing the benefits of automation, without high capital investment. Rise and Learn also provide eLearning solutions to SMEs through various partnerships.
With all this said, there are still many companies that are using primarily manual systems and who have yet to embrace the benefits of a more digital and automated organisation.
What are the key barriers preventing organisations fully embracing HR tech?
Whilst mindsets are beginning to shift, there are some common barriers that prevent businesses from fully making the leap into the digital HR world. Such factors include:
- Too much focus on the cost, particularly the capital expenditure and operational overheads. Rather than looking at the overall cost-benefits, there is a perception that technology is expensive and businesses will often hone in on the cost of implementing and managing digital solutions, without also considering the cost-benefit analysis and giving merit to the return on investment over time.
- Leaders are failing to see the benefits of HR systems. Stewart explains that “from a CEO’s perspective, HR technology is not always seen as essential and in many cases is not of strategic importance.”
- Lack of forward, strategic thinking; many leaders are focused on looking at a reactive approach to HR, through things such as performance improvement plans, disputes and conflict resolutions. Clearly, none of these factors are about building or developing people. In many cases businesses are implementing technology because they need to, as opposed to appreciating how it can drive the business forward, provide value and develop a more effective and conducive working environment, through implementing strategies to proactively encourage attracting top talent, developing people and enhancing the workplace experience.
- Fear of losing jobs to technology. Emily explains that “in a country where unemployment is high and there is no government support for those without work, the prospect of losing a job is something that many people fear. This then translates into slow implementation or resistance to change, with many projects eventually failing.”
- While CIOs often see benefits of technology, they can become a big stumbling block when it comes to considering cloud-based solutions, through fears of data security and possibly also a loss of control.
- Lack of information, skills and visibility of market offerings. As HR technology is immature in Kenya, knowing where to get information on which system is best or how to effectively implement solutions can be challenging. Experienced consultants and project resources are also not easy to come by.
Continue to read about HRTech in Africa – Part 2.
About the Author
Ayaan Chitty is a leading international HR systems expert. Having gained 12 years of experience with global, world-renowned blue-chip companies, he has built strong and successful global teams and led many strategically aligned HR technology projects. Ayaan currently partners with many clients in the EMEA region and is building HR Tech Africa, a new and exclusive online network for HR professionals & business leaders in Africa. Ayaan’s mission is to encourage companies to create the ideal workplace through unleashing the transformational power of technology to maximise talent, support strategic decision making and improve the efficiency of the HR practice in organisations across Africa. HR Tech Africa aims to connect and build lasting relationships with professionals across Africa and beyond. For more information on HR Tech Africa, you can register interest at Discover HR Tech Africa.
A special thanks to:
- Emily Kamunde-Osoro, Leadership Coach & Director at Rise and Learn
- Stewart Samkange, East Africa Director at SAP SuccessFactors.