The CHRO Point of View: Asia Pacific. Employee Experiences Drive Business Value

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1 The CHRO Point of View: Asia Pacific Employee Experiences Drive Business Value 1

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3 Global Overview The Chief Human Resources Officer (CHRO) is fast becoming a driver of change and accelerator of digital transformation. And a select group of CHROs are leading the way. They are transforming the employee experience through innovative technologies that increase productivity, improve corporate results, and engage workers. As a result, they are winning the war for talent. ServiceNow commissioned Oxford Economics to survey 500 CHROs about the changing nature of the job and its impact on business performance. Respondents are based worldwide, and represent a broad range of B2B and B2C sectors. This report highlights the key findings among the CHROs polled in Asia- Pacific: Australia and New Zealand (45 CHROs combined), Japan (45), and Singapore (45). 3

4 CH RO POV: AS IA PACI FIC 4

5 Key Insights: CHROs in the Asia Pacific countries surveyed (Japan, Singapore, and Australia) are ahead of their peers in other countries at driving digital transformation to improve the employee experience in their organizations. This leadership is driven in large part by companies in Japan, which distinguishes itself not just from other countries around the world but from Singapore and Australia as well. More than CHROs polled anywhere else, they prioritize attracting and retaining talent; they have a deep commitment to improving the employee experience; and they are strongly supported by C-suite leadership in prioritizing the employee experience. The payoff has been greater success than their counterparts in building a workforce that meets future business objectives and winning the war for talent. However, variations exist across the countries. CHROs in Japan are better supported by business leaders and more likely to be investing in improving the employee experience than peers in Asia Pacific. CHROs in Australia and New Zealand lag Asia Pacific peers in adopting technology and competing effectively for talent. Asia Pacific CHROs value employee experience most. CHROs in Asia Pacific are exercising their growing C-suite influence by piloting digital transformation initiatives focused on improving the employee experience. CHROs in Asia Pacific are on par with global competitors in leading digital transformation initiatives, with 59% saying the HR function is a driver of digital transformation at their companies, compared with 56% in Europe and 54% in North America. CHROs in Asia Pacific are more likely than global counterparts to prioritize the employee experience: Three years ago, 24% were digitizing parts of the employee experience, vs. 21% in Europe and just 4% in North America, and 5

6 33% emphasized creating an amazing employee experience (vs. just 12% in North America). As a result, Asia Pacific CHROs lead the world in saying their employee experience is perceived as significantly or somewhat better than their competitors (67% in Asia Pacific, vs. 54% in North America and 66% in Europe). Asia Pacific 59 % Europe 56 % North America 54 % CHROs say the HR function is a driver of digital transformation Asia Pacific 67 % Europe 66 % North America 66 % CHROs say their employee experience is better than others Asia Pacific 43 % North America 26 % CHROs say they have built a workforce to meet future business objectives to a meaningful extent In Asia Pacific, the high value CHROs place on the employee experience is shared by senior leadership. CHROs in Asia Pacific are roughly on par with their counterparts in North America and Europe in saying CEOs hold them accountable for the employee experience strategy (67% in Asia Pacific, vs. 63% in Europe and 60% in North America), and CHROs in Asia Pacific also lead their colleagues in Europe and North America in harnessing data and analytics to improve decision making, with 60% of Asia Pacific CHROs saying data-driven decision making is important, compared with 44% in North America and 54% in Europe. 6

7 As a result of these priorities and attitudes, the success of CHROs in Asia Pacific in competing with other companies for top talent is second to none (62% in Asia Pacific say they are successful or very successful, vs. 50% for North America and 60% for Europe). The war for talent is an everyday affair for us. Over the years, we have always been proactive and progressive in adopting technology. We are now looking into digital HR in order to attract and retain talent, and definitely in much better shape to compete and face future challenges. Aileen Tan, Group CHRO, Singtel Within each Asia Pacific country polled, however, the level of influence and impact among CHROs varies. Japan: a model for HR digital transformation. Japan-based CHROs lead the region, and in many cases the world, in key categories of HR transformation. CHROs based in Japan lead the region in: Viewing HR as a strategic function: 84% in Japan say their role has grown more strategic, vs. 71% in Singapore and 69% in ANZ. Prioritizing the employee experience: 87% of Japan-based CHROs agree or strongly agree that creating seamless employee experiences drives engagement and productivity, vs. 77% in Europe and 58% in North America. 7

8 Being held accountable for the employee experience strategy by the CEO (82% in Japan, vs. 62% in Singapore and 56% in ANZ). CHROs in Japan lead most counterparts across the world in: Satisfaction with employee engagement (78% in Japan, vs. 71% for Europe and 70% for North America). Having a strong employee experience as perceived by job candidates (80% in Japan, vs. 67% for Asia Pacific, 66% for Europe, and 54% for North America). Saying a platform to streamline cross-functional collaboration would drive productivity and improve the employee experience (80% in Japan, vs. 60% in ANZ, 73% in Singapore, 70% in North America, and 66% in Europe. Globally, Japan is second only to Germany at 84%. Gaining support from senior management that talent is a strategic priority (80% in Japan, vs. 71% in Europe and 62% in North America. Saying HR strategy is an important differentiator for the company (78% agree or strongly agree, vs. 51% for ANZ, 64% for Singapore, 50% in North America and 63% in Europe). Saying their talent strategy is a competitive differentiator (76% in Japan, vs. 62% in Europe and 66% in North America). Building a healthy organizational culture (76% in Japan, vs. 69% for Asia Pacific, 62% for Europe, and 68% for North America). 8

9 Australia and New Zealand: Room for improvement. Australian and New Zealand-based CHROs lag behind their peers in Singapore and Japan in their effectiveness at using technology to create a positive employee experience, and positioning the CHRO as a strategic member of the organization. For example, 16% say they do not use technology in a meaningful way, compared with 2% in Japan and 9% in Singapore. ANZ-based CHROs are also less likely to say the HR function is a driver of digital transformation at their company (47% in ANZ, vs. 64% in Japan and 64% in Singapore). We find that if we can get people connected to a business for more than two years, they stay for quite a long time... and we see a really strong correlation between successful onboarding of employees and retention rates. Neil Trembath, Chief People and Technology Officer, Ausenco Singapore: Up and coming. Singapore-based CHROs are more advanced than peers across the region in digitizing the employee experience: They are more likely to say their core role three years ago was making HR workflows more digital and efficient (38% in Singapore, vs. 29% in ANZ and 18% in Japan). However, this group of CHROs was significantly less successful at retaining talent than competitors in the region (31% in Singapore, vs. 51% in ANZ and 58% in Japan). 9

10 We embarked on a journey to streamline and consolidate all of our HR data onto one global platform, and that makes it possible for us to standardize rather than customize our HR processes. We call that borrowed agility and it gives us the ability to move very, very quickly. Aileen Tan, CHRO, Singtel Telecommunications Ltd. Progress on the HR digital journey. To track how CHROs in Asia Pacific are advancing on their journeys to improve the employee experience, we defined nine criteria that translate into three levels of maturity: Level 1 organizations could be more effective in using technology, while primarily focused on the delivery of core HR tasks and processes. Level 2 CHROs are responsible for driving corporate performance and are beginning to deliver a stronger employee experience, with the goal of improving organizational culture and securing the best talent. Level 3 CHROs are leaders who are optimizing how the HR function operates to more effectively utilize resources and transform the employee experience so that it becomes an important lever for creating business value. 10

11 As a whole, Asia Pacific is on par with other regions of the world in the proportions of each level. Globally, Level 1s represent 74% of the total, Level 2s 18%, and Level 3s just 8%. In Asia Pacific 75% are in Level 1, 17% in Level 2, and 8% are in Level 3. By comparison, in Europe 74% are in Level 1, 18% are in Level 2, and 8% are in Level 3; and in the North America 76% are in Level 1, 18% are in Level 2, and 6% are in Level 3. Who s at level 3 in Asia Pacific? Country Level 3 Respondants % of Country CHROs on Level 3 Singapore 2 5% Australia/New Zealand 3 6% Japan 7 16% Within Asia Pacific, Japan had the highest proportion of Level 3s (16%). Globally, France had the same proportion of Level 3s. In Singapore, 4% of CHROs are rated at Level 3, and in ANZ 4% are Level 3s. The high percentage of Level 3s in Japan reinforces the leadership position of Japan in creating amazing employee experiences that translate into business performance. 11

12 Winning the war for talent. CHROs who come closest to meeting all of the criteria for Level 3 are well positioned to attract and retain top talent. Those characteristics include: 1 Driving corporate performance and increasing employee productivity 2 Prioritizing the creation of a digital, consumerized employee experience in three years 3 Focusing on at least one of the following: Contributing to organizational strategy, contributing to corporate performance, digitizing parts of the employee experience 4 Agreeing digital technology that delivers more personalized, seamless employee experiences drives quantifiable productivity gains across the business 5 Agreeing that employees across the business frequently work with other departments to meet their HR needs 6 Adopting HR technology that allows the company to improve the employee experience 7 Being satisfied with the onboarding process for new employees the organization has in place 8 Assessing your HR function as effective at building a healthy organizational culture 9 Customizing the HR experience for individual workers 12

13 Japan has more Level 3 organizations, a higher proportion of Level 3 companies, and leadership in many of the additional attributes that help win the war for talent, including a focus on employee engagement, dedication to improving the employee experience, and the ability to enlist and drive the support of senior management. Perhaps the most revealing statistics: Japan leads not only Asia Pacific but the world in building a healthy organizational culture (76%, vs. 71% for Australia/New Zealand, 60% for Singapore, 62% for Europe, and 68% for North America). Japan also leads the world in retaining talent: 58% of Japan-based CHROs say they re successful or highly successful, compared with 51% in Australia/New Zealand, 31% in Singapore, 46% in North America, and 49% in Europe. Japan leads not only Asia Pacific, but the world in: Japan 76 % Australia/New Zealand 71 % Singapore 60 % Europe 62 % North America 68 % Building a healthy organizational culture Japan 58 % Australia/New Zealand 51 % Singapore 31 % Europe 46 % North America 49 % Successful, or highly successful in retaining talent 13

14 CH RO POV: AS IA PACI FIC 14

15 Conclusion: CHROs in Asia Pacific are partnering with senior business leaders to drive transformation in HR, focused on harnessing technology to improve the employee experience. While individual countries in the region are progressing toward the digital future at different rates, Asia Pacific HR organizations are typically enjoying greater success than their global counterparts in building a workforce that meets future business objectives. They are focusing their budgets on advanced technology that fuels increased collaboration, engagement, and job satisfaction and they are being rewarded not only by lower employee attrition rates but also more prominent roles in the C-suite and greater responsibilities for organizational strategy. Japan-based 93 % Australia/New Zealand 82 % Singapore Europe North America 76 % 78 % 78 % CHROs agree or strongly agree that attracting and retaining talent is a top strategic goal Asia Pacific 60 % Europe 54 % North America 44 % CHROs harnessing data and analytics to improve decision making Download the Global CHRO Point of View: Read the full report detailing the CHRO s journey to greater impact and a stronger employee experience. servicenow.com/chro 15

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