A survey carried out by PwC in collaboration with the Foundation for Human Resources Development has revealed that having insufficient resources within the HR team, poor implementation of HR practices by management and a lack of analytical capability in HR are organisations’ top three barriers influencing the performance of their human resources function.

The survey indicates that for smaller organisations, it is a problem of resources, skills and budget. On the other hand, for larger organisations, the top barriers are the implementation of practices, getting top management on board and a lack of analytics capability. This emphasises the fact that although HR is being given more strategic recognition it is still not enough to realise its full potential, as well as highlighting the need for the introduction of HR technology to help the HR function be more efficient.

The PwC HR Pulse Survey was an online survey, and a questionnaire was sent to a sample of HR practitioners across organisations of different sizes and sectors.

The survey reveals that more than three-fourths of organisations have a formal HR function, with most of the HR functions positioned at senior management level, thereby giving due strategic recognition to HR as an essential critical resource to any organisation.

However, in smaller organisations this is not as well established, with more than half of organisations employing less than 50 employees having no formal HR function in place.

According to the respondents, retaining key talent, creating a high-performance culture and managing employee engagement are their top three priorities for the next 12 months.

The survey highlights that 91 per cent of the respondents have employment contracts in place; however, this level of compliance appears less pronounced for micro organisations where about 27 per cent do not have employment contracts in place. The majority of the surveyed organisations also have procedures in place regulating disciplinary matters.

PwC said that although employee engagement has been found to have a positive impact on profit, revenue growth, customer satisfaction, productivity, innovation and employee turnover, a significant number of organisations do not measure employee engagement.

“As the number of employees in the organisation decreases, so does the percentage of those that measure engagement. Measuring employee engagement is not enough, and organisations need to devise and implement action plans to address any employee engagement issues they may have. For example, the survey revealed that of those that measure engagement, over a third do not monitor their employee engagement action plans. However, on a more posi­tive note, nearly half of the organisations put employee engagement in their top three priorities for the next year,” PwC said.

HR needs to match the pace of change, and businesses need an HR function that is at the top of its game – innovative, analytical, predictive and supportive

The results for reward and performance management show that the majority of organisations have a formal performance management system in place.

“With the right performance management systems and reward strategies in place, employees will learn and develop from the feedback they are given, and become more productive. Furthermore, they will develop loyalty to the organisation if they believe they are being justly rewarded for their effort.

“While less than half of organisations’ performance management systems are not linked to rewards, we can see a shift in this area as 65 per cent of organisations are planning to introduce or revise their performance management system over the next 12 months as part of their reward strategy.”

More than half of the organisations surveyed have an HR technology system, with larger organisations considering this to be beneficial; indeed, the majority of organisations with over 250 employees have an HR system in place. The lack of analytics capability in HR is also highlighted as one of the top barriers influencing HR performance; 20 per cent of survey respondents mention improving HR technology as one of their top three HR priorities for the next 12 months.

PwC says that in today’s digital age, online training is becoming very popular, especially among millennials, who make up a significant part of today’s workforce. With the use of technology, learning resources are available digitally, making it more accessible to employees. The increasingly flexible working arrangements being used by employees also makes this accessibility ever more imperative, highlighting the need to go digital.

However, in Malta, nearly half of respondents have not benefitted from digital learning as they only provide classroom training and do not see the benefits of this learning method. Nevertheless, this seems to be changing gradually with 56 per cent of organisations indicating a drive towards blended and online training.

What does this all mean for HR, PwC asks. It says: “The world is transforming fast; the theme is one of change led by disruptive innovation. Businesses face some pressing questions about their future talent pipelines and people strategy fit for the digital age. New sources of skills to power tomorrow’s organi­sations must be found, and the way in which people work, and where they will work, will need to be reconceived.

“While organisations are well aware of the extraordinary challenges ahead, there is still an enormous gulf between intention and action. HR needs to match the pace of change, and businesses need an HR function that is at the top of its game – innovative, analytical, predictive and supportive.”

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