HR investment on the strategic agenda for African business

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That's according to Gerhard Hartman, Head of Department of Sage HR Africa, who said that African organisations are making heavy investments in new business systems - and especially HR solutions - to cater for a more competitive business environment.

"Many African businesses are moving fast to adapt as countries transition from cash-based economies into modern economies. There is a growing focus on regulatory compliance and corporate governance," said Hartman. "As a result, demand is growing for modern business applications that help companies improve controls, automate processes, and sharpen regulatory compliance."

Hartman said that challenges in Africa are as diverse as the continent itself - for some countries, power generation or high internet costs are key issues, while others are wrestling with skills shortages or inflexible laws. But across sub-Saharan Africa, most are experiencing the same challenges in retaining talent in the workplace and in making sure that business are compliant with statutory legislation.

Under pressure

"Like businesses throughout the world, African organisations are facing pressure to be more efficient; to meet the growing demands of lawmakers and regulators; and to attract, retain and enhance the performance of talent in the workplace," said Hartman. "Recruiting top talent and retaining it is a massive challenge for companies. Skills development is a key focus for companies and they are investing more and more in training and development for their employees."

One item high on the agenda for African organisations is employee engagement. Many African businesses are asking how they can better create workplaces, interactions and value propositions that keep their employees satisfied, said Hartman.

It's encouraging that a study published last year by Emergence Growth in partnership with Aon Hewitt found that 72% of employees in sub-Saharan Africa are considered engaged. The figures are similar to those of other emerging economies and significantly higher than developed economies. "This is good news since an engaged workforce with the right skills and competencies delivers a vast return on investment for any business," said Hartman.

"Multiple studies have shown that an engaged employee base is good for a company's turnover, profitability, customer satisfaction and productivity. For example, the US-based Corporate Leadership Council's study of the engagement level of 50,000 employees around the world found that engaged companies grow profits as much as three times faster than their competitors."

Investing in HR solutions

Because of this new focus on human capital, many African companies are investing in HR solutions that help them manage their talent as a strategic resource. They are taking a strategic approach to attracting, recruiting and developing the right employees to build a skilled and passionate workforce.

HR applications help by automating routine paperwork and providing data for better decision making, said Hartman. This allows the HR department to focus on things that matter most, like aligning the workforce with the business strategy, sharpening the employee value proposition, and attracting top talent.

The cloud is helping African businesses to get up and running on the HR solutions they need at a rapid pace and with minimal upfront spending. Larger businesses and multinationals prefer the cloud because it makes it easier to provision solutions to remote offices where they might not have ICT skills, said Hartman. One major challenge is that not every country has cost-effective, high-quality connectivity to support use of the cloud. Electricity constraints in many countries are also still of major concern. But these issues are falling away fast and cloud adoption is rising.