By Hare Ram Ray, Global SAP Cloud Applications Practice Head, Wipro

The UK economy has continued to show strong recovery and is set to be among the strongest growing economies this year. As we enter the second half of 2014, economic indicators such as inflation, the housing market and unemployment are all showing improvements. However, as the recovery progresses, businesses continue to face severe workforce challenges created by the downturn, from organisational culture and employee engagement, to obsolescent technologies and outdated skills.

Impact of the economic downturn on the European Workforce

While the economic downturn held European businesses in its grasp, their ability to keep pace with the wider world was severely hampered.

Many organisations have weathered poor economic conditions by sticking to tried and tested ways of working, as a result business culture within these organisations has become outdated. This has created a situation where organisations have not figured out new approaches and business models to attract new talent and retain it. Ultimately, without reinvigorating their culture, these companies will fail to attract the younger prospective employees with expectations of a modern working environment that will provide the key to future talent and growth within the organisation.

The need to attract new talent is felt particularly keenly in an environment where a prolonged period of economic instability has created an aging and therefore static workforce. As a result, skills within organisations have also become static, creating a gap in new, digital-economy skills so vital to operating in today’s technologically advanced business environment.

How HR department can address this challenge and support growth

The problems of the future cannot be solved by skills, methods and tools rooted in the past. Modernisation will take different forms, from mergers and acquisitions, to restructuring the business and workforce. Whichever path organisations choose the HR department will play a pivotal role in supporting the businesses’ ambitions, ensuring that the organisation has the skills, capacity and leadership talent to capitalise on the opportunities provided by this period of stability.

According to Boston Consulting Group[1], the top five challenges for European HR directors in 2015 will be managing talent, managing demographics, becoming a learning organisation, managing work-life balance, and managing change and cultural transformation. Addressing these challenges will see the HR function move from its traditional administrative role to become a strategic partner and advisor to the business — a road along which many organisations are already taking great strides.

However, as HR looks to take a more strategic position within the organisation, the lack of robust global systems and processes will pose as a significant challenge. What is needed is systems capable of creating, managing and developing a modern, agile and increasingly global workforce, with timely and relevant data providing accurate and meaningful insight into skills, talent and risks.

This may sound like no mean feat, but with the right processes in place — processes that enable HR to review and challenge current business processes and identify how they can be improved, streamlined and augmented — introducing a new, modernised HR system needn’t be a major headache.

The most important factor is to have the right data and the ability to use it in a meaningful way. Secondly, it is vital to ensure that the system implementation and rollout schedule suits the needs and priorities of the business. In the market there are state of art cloud based HCM solution suites available enabling organisations to realise early business value by speeding up implementation times. Implementing a cloud-based system would mean that the move to a new system can happen in either a big-bang switchover, or incrementally according to the desired timescales. Finally, it is critical to have a robust change management programme to ensure that the system and process changes are communicated effectively to all relevant stakeholders.

With more than five years of stagnation for both the economy and business, HR leaders need to prepare their organisation rapidly for growth, making sure it has the right tools, capabilities, processes and data in place to support the business in its quest for growth. By ensuring that the business has the right skills, knowledge, capacity and leadership talent, HR department can help the business shake off its legacy constraints and move fast to capitalise on new opportunities.

[1] Boston Consulting Group, The Future of HR in Europe: Key Challenges Through 2015