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HR TECHNOLOGY HITS LOCAL MARKET
BY SHAIMAA FAYED
As the global IT sector undergoes continuous development, the nexus between computerized systems and human-based services is rapidly strengthening. Increasingly aware of the role played by human resources (HR) in driving forward a company’s competitiveness, businesses worldwide are deploying customized technology to streamline the day-to-day processes and operations of their HR staff. Egypt is gradually following suit, with terms such as “automated HR” and “e-HR” beginning to find their way into the business lexicon of local establishments.
Nadia Haridi, northeast practice leader at Right Management, a US-based global firm whose outplacement services are used by 80 percent of the Fortune 500 companies, explains that, both within the organization to which she belongs and the international organizations for which she provides consulting services, the use of HR technology is considered an essential business practice. Speaking in a phone interview from New Jersey, she said, “In North America, this is just the way we live. It’s mainstream... You find a lot of companies that have their own robust HR departments have scaled back and outsourced. Mostly they use the e-HR approach and enterprise system.” Haridi, who left Egypt over two years ago, speculates that more Egyptian companies will begin adhering to the global trend, a situation that has already transpired.
Amongst the growing number of Egyptian enterprises tapping into the HR application market is the Central Bank of Egypt (CBE), currently in the process of installing a human resources management system (HRMS), purchased from Oracle, to manage its 5,000-plus employees. Hazem Abdel Hady, general manager of human resources at the bank, is embracing the new technology as a catalyst for business development. “If you really want to run a professional HR office, definitely you have to have a system to do your homework and analysis for your decisions,” he says, adding that prior to the installation of the software, generating statistics and reports on the bank’s personnel was an arduous task. “The whole idea behind the fully integrated system is to have a paper-less process,” he adds.
An HRMS typically allows an organization’s HR personnel to monitor a broad spectrum of HR-related activities – ranging from recruitment to employee payroll and performance management – through a single interface. By selecting from a variety of modules, each performing a distinct function, an HRMS can be tailored to an organization’s individual requirements. CBE’s chosen modules include “HR self service,” whereby staff can log onto their profiles on the system and update their personal information, such as in the case of acquiring new training or certificates. Managers can then monitor employee training requirements, for example, against specific job delineations and competencies that have been fed into the software for each job position. Abdel Hady explains, “When you recruit an employee, you recruit them based on certain competencies... You input into the system all the competencies that you need per job. Then you compare the employee’s performance against these competencies. It gives you the gap between the actual versus the expected so you know what type of training employees need to go for.”
Abdel Hady’s views are echoed by Laura Kassabian, an HR specialist at Orascom Construction Industries (OCI). Eliciting the aid of online recruitment software, her department is tasked with continually bringing on board a pool of engineers for the company’s various projects. Amongst the benefits cited by Kassabian of the automated recruitment application is the reduction of paperwork and administrative errors, and speedier completion of processes. “Imagine you have to fill 30 vacancies. Each vacancy is different. They can be the same position but different levels... When you’re that busy, you don’t have time to go and check hard copies and see who was met and who wasn’t.” Through the automated recruitment system, the detailed information of each applicant is fed into a database, including their interview date and HR assessment. This minimizes the possibility of wasted time in cases where rejected applicants reapply for positions, an occurrence which, she explains, is not uncommon in the world of HR.
All of this begs a fundamental question: is e-HR essentially an elaborate term for data storage tools that automate manual processes? Samir Younes, managing director of Top Business, an HR development company, replies that HR management systems cannot be relegated to the status of data entry programs: “In an automated system, you transform data into information. Data is raw material. Information is after you analyze the raw material... the information then helps you to make decisions.”
Kassabian concurs, explaining that software such as that created for recruitment allows companies to automatically chart and graph vital employee statistics. She cites more sophisticated uses of e-HR tools, such as online ability tests, which her department uses when faced with a tough choice between two candidates of an equal caliber. The candidates are made to sit through an online multiple choice test that provides on-the-spot quantified results measuring certain areas of competency such as communication skills or problem-solving. “It makes the choice much easier,” she says.
Local software developers have cashed in on the HR automation trend. Hits, a Microsoft-certified independent software vendor specialized in HR applications, began developing NAS.NET, its human resources management system, in 1998, when the field of HR in Egypt was still in its nascent stages. “We wanted to ride the wave from the very start,” says Gamal Shenouda, chief operating officer of Hits. “We knew this would become a profitable industry. HR’s era had already begun worldwide in the ’80s. With the advent of multinationals in Egypt, it was anticipated to grow here too.” The research and development stage of the NAS.NET project lasted for three years before the product was sold to its first customer, the Ritz-Carlton Sharm El Sheikh, in the ’90s. Today, 65 percent of Hits’ business is generated from its product exports, its prime markets being countries in the Gulf. The remaining 35 percent of its revenues are generated from sales to large-scale Egyptian corporations, such as Raya, EFG-Hermes and Al Ahram Beverages Company.
Shenouda cites country-specific differences as major drivers for the development of NAS.NET. “The available HR management systems did not satisfy the different cultures of the Middle East and Africa,” he explains. “Work laws, taxation, payroll and official government forms need to be taken into account. If you get software with general ledgers from other countries, it could work. Debit is debit and credit is credit everywhere... However, in HR, conditions vary from country to country and even from company to company within the same country.”
Amongst the most important characteristics Shenouda attributes to HR management systems is their role in detecting nepotism within an organization. “The whole idea is to compare records of actual competency levels relative to required job competencies,” he explains. In doing so, an automated HR system allows for an objective evaluation of the abilities of employees, ensuring that hiring processes and succession planning are conducted on a fair basis.
With price estimates for more sophisticated modules starting at $7,000 and incremental costs wavering between $20 and a hefty $300 per head, it would seem that smaller companies may not see justification in utilizing new HR technologies. Not necessarily, says Tarek Howeidy, CEO of Intodevelopment, a local digital agency that recently developed an online recruitment system (ORS) module for Orascom Hotels & Development. Whilst acknowledging that the costs of e-HR are generally high, Howeidy says: “Ten years ago HR was an admin job. I think this is one of the things that caused a lot of companies to fail or have serious internal problems. Today, HR is becoming a very strong department... I don’t think that investing in HR software is costly, or at least the return on investment is justified in this sense... You don’t have to start with the whole full-fledged system, but you have to start somewhere. Start with the basics then begin developing on your needs.”
Howeidy, who points out that “finding [qualified] people doesn’t happen overnight,” explains that automated HR systems help employers to reconsider previous applicants who could prove qualified for a new job opening. “Sometimes you have people with many of the qualifications you want but who lack the experience... Maybe when you reconsider their CV a year or two later you’d realize that they probably gained it within those two years... Accordingly, you have to start compiling a database.”
Though the use of automated HR is slowly gaining momentum in Egypt, many doubt that it will witness significant growth any time soon. “I don’t think Egyptian companies have reached a stage where they would like to spend money on automated HR systems,” says Younes. “[This is] for one simple reason. Before having the automated HR systems you must have manual HR systems... What we’re fighting for is to make sure that companies realize how important the HR function is, and this takes a long time.” Younes explains that advancements in Egypt’s HR sector will be hindered further by the current economic climate; many elements of human resources, such as training, are amongst the first business segments to be downsized when a company undergoes a rough financial period.
IT specialists, however, contend that with the speed at which technology is developing, automating the management of an organization’s human capital is inseparable from business success. Howeidy states, “There is a big difference between whether we are ready or not, and whether we have a choice or not. I don’t think we have a choice. If things are that fast then we don’t have time for filing, so we need an automated system.”
The intersection between technology and people management spurs discussions on the extent to which the “human” element can be removed from human resources. The team at Hits, which spent three years to develop the built-in intelligence of NAS.NET, labels its system a “dynamic nervous application,” meaning that, instead of mere storage and retrieval, it serves as a “smart” tool that can be easily customized to match different business needs. “It allows users to reshape records in hundreds and thousands of ways, with zero programming,” says Shenouda. Still, he notes, the need for the human element is uncontested – “You don’t manage numbers, you manage people.” Shenouda explains that, irrespective of the automated system in use, the readiness of a company’s HR department, including its organizational structure, competency model and training plans, directly affects the benefits it will extract from the software.
Younes, whose career in human resources has spanned two decades, is quick to deflect any thoughts on the dehumanization of a people-related function. “The good old ways of recruiting people and watching body language, I don’t think this can be eliminated,” he says. “You can’t judge a person through an automated system. Automated systems have limits, at least in our time. I don’t know if in 100 years maybe this will change but I don’t see it coming.”
As different views emerge on the crossroads between technology and service functions, in today’s cutthroat business environment changes in the role of HR and the growing realization that human capital can make or break an organization are pushing progressive Egyptian companies, like their foreign counterparts, to place human resources at the forefront of technological innovation. Comparing manual and automated HR systems, Howeidy draws on an analogy: “It’s like the difference between using a computer versus a typewriter to produce a letter.”
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