"Imagine we invest in our employees and then they leave anyway," says the one. "That would be too bad, but: imagine we don't invest in our employees and they stay," says the other.
A company's most important asset is its employees: their skills, their knowledge, their motivation. People as a resource are consequently the greatest challenge for the future. What tasks do medium-sized companies face when it comes to human resources management? What role does their location play – in rural or in metropolitan areas? And what are the differences between SMEs and large companies?
Large companies in particular have recognized that issues such as employer branding, talent management and strategic HR planning are becoming increasingly important, and these companies are investing accordingly. Medium-sized companies are also aware of this importance – but lack consequential implementation. A talent management program as well as personnel planning and succession management are hardly ever being used as active personnel management instruments. There's a considerable need for action here in the future, not only because of the increasing shortage of skilled workers, but also from a demographic perspective.
There's also a significant gap between wish and reality when it comes to recruitment. The matter of personnel recruitment lies fallow in many companies. Smaller companies show clear deficits in almost all recruitment efforts compared with large companies. While corporate groups exhaust the entire range of possibilities, SMEs rely mostly on classic channels: online job portals, their own websites or print ads.
This is all set to change, however. The latest figures from SAP SuccessFactors already show a strong increase in small and medium-sized companies that recognize the potential of SAP's modern cloud solution. 48% of all SAP SuccessFactors customers are medium-sized enterprises. With SAP's HR Suite, all employee touchpoints are taken into account and mapped in a modern user interface. All of this happens in real time and fully independently of device and location.
"Capital can be procured, factories can be built, but people have to be won over."
What industry manager Hans Christoph von Rohr already recognized in the last century continues to gain explosiveness today – this is exactly where SAP's suite comes in, mapping the complete lifecycle, from employee recruitment through continuing development and employee retention to succession planning.
"We wait a lifetime for the extraordinary person, instead of turning the ordinary ones around us into such."
The thought of cultural philosopher Hans Urs von Balthasar has not lost much of its topicality either. Here, the focus is on motivation. Motivation is an inner ambition – the desire to achieve a certain goal. Motivated people take initiative and work hard to achieve goals, while remaining enthusiastic. A Gallup study (2019) found that motivated employees are more productive and therefore increase company success. Likewise, motivated employees reduce turnover rates & minimize absenteeism by up to 37%. Occupational accidents can also be prevented by motivated employees (50%).
In Germany, however, just 15% of employees are emotionally attached to their company. Nearly six million (16%) have already quit internally, and of these, 650,000 are ready to change employers and are actively looking for a new job. The remaining 69% are merely doing their job by the book. The result: billions of euros in economic damage every year.
But let's not leave it at wise words. Act now! We'll be happy to support you.
What does it cost to replace an employee?
Hardly any other issue moves medium-sized businesses as much as the search for suitable skilled workers. Today, more than ever, medium-sized companies have to avail themselves of all recruiting channels in order to position themselves as an interesting employer and to snap up qualified junior staff. Not having the right talent in the right place at the right time can impact customer satisfaction as well as limit and delay the ability to grow.
A shortage of IT skills requires employees to work more. Nine out of ten skilled employees work overtime. “IT workers have to pitch in for the people the boss can't find on the job market," says Michael Jäkel (Verdi). In some companies, projects are managed by just twelve employees where 20 people used to work. But employees not only bear a greater burden than before. "They now often have to take on tasks for which they are not qualified. That leads to additional stress," adds Jäkel.
It costs around 2,500 euros to replace an employee earning an hourly wage of just 6 euros. For employees in lower management and at the executive level, the cost is around 30 to 50 percent of their annual salary. In middle management, you have to reckon with about 150%. Top management specialists and executives can cost up to 400% of their annual salary until they are fully replaced. And yet, nearly 90% of companies don't start the search for suitable successors until after the vacancy becomes known. The reason: just a quarter of German companies engage in strategic succession planning.
The solutions for overcoming the shortage of skilled workers are obvious: strategic succession planning, further training opportunities and fair targets.
High employee motivation is critical to business, leading as it does to high company performance. According to the Harvard Business Review, companies with highly motivated employees are 22 percent more productive than other companies. Much more important than a high salary are development opportunities, personal challenges and fun at work. Although many factors affect motivation, the behavior of managers has the greatest influence. But the most important thing is to heed the following common-sense principles: respect your employees, show them what they need to do, and give them credit for their accomplishments. With SAP SuccessFactors, you give your employees something back. No more guess work or even good instincts are required, since succession planning is based on facts about skills and expertise. Transfer critical business knowledge to the next generation of leaders and find out what motivates them and where they perform best.
- Evaluate workforce performance objectively and in real time.
- Capture a live summary of accomplishments, which will ideally prepare you for more formal performance reviews.
- Clearly assign development goals, based on identified needs.
- Actively prepare for new roles within the organization.
- Transparency over specific career paths
With SAP SuccessFactors, you can not only attract the best talent, but retain, develop, fairly compensate, and consistently motivate existing employees while reducing employee turnover by an average of 32%. A positive transformation in human resources will also result. For example, our clients generate an average of 20% more revenue per employee while having 72% less manual bureaucracy.
If you want to manage Generation Z successfully, you have to understand their values!
They clearly separate work and leisure time from one another. Generation Z also strictly rejects other modern concepts of Working World 4.0, such as desk sharing. In their job motivation, the focus lies not on monetary incentives and professional status, but on self-fulfillment, enjoyment of work and a good working atmosphere. Young people are more or less immune to snappy advertising slogans, since they can check everything in a matter of seconds to see whether the employer really does what it claims. News about good employers spreads just as rapidly on the social media and channels of the new generation as do disappointments in this regard. Generation Z also exhibits different values compared with preceding generations and has different expectations of the working world. They find career ladders and company cars rather uninteresting. These "digital natives" are self-confident, want to be motivated and demand independence as well as constant feedback.
Successfully motivating Generation Z employees and binding them to the company depends heavily on the use of mobile and smart technologies. Successes and failures depend on how well companies promote and deploy their own employees. In globalized competition, the best talents must first be found, then continuously developed, promoted and prepared for key positions. In the process, the performance, successes and shortcomings of employees – and thus of the entire company – must be transparently visible and consistently traceable. The SAP SuccessFactors cloud solution makes just this possible. The suite includes recruiting, applicant management, onboarding, a learning management system, performance management and succession planning. Through collaborative approaches, SuccessFactors thus covers essential and complex HR core areas such as social collaboration, social learning, performance assessment and evaluation, feedback and goal setting. The various modules can be combined in any way and are scalable in their scope of use, in the interest of extracting the greatest potential from the company's most important resource – your employees.
SAP S/4 HANA – Maintenance Extension: I still have time – right?
Time is as valuable as money and should be used. The proverb "Time is money" comes from Benjamin Franklin and first appeared in his book Advice to a Young Tradesman, which appeared in 1748. 273 years later, the adage still holds true!
When SAP recently guaranteed regular maintenance of Business Suite 7 through 2027, many an SAP manager in the mid-sized industrial sector took a deep breath. But this is no reason to sit back and relax. Now is the time to tackle the SAP S/4HANA transformation – with a service provider that knows the industry. Scheer GmbH is the leading specialist for efficient business process management – the "one-stop shop" from strategy consulting to operational implementation. One contact for full-service support as an equal partner – from SME to SME.
- Consulting company with its own products ✔️
- SAP Gold Partner ✔️
- Excellent industry expertise ✔️
- Professional technological expertise ✔️
- Proprietary data centers ✔️
If companies really still have as much time as they think, why did SAP issue the maintenance extension? That's an easy question to answer. There are not enough SAP consultants to meet the demand over the next 5 years.
SAP service providers are more in demand than ever. Good individualized implementations require not only expertise, but also capacity. The number of open IT jobs reached a new record high and the number of unfilled positions within one year increased by 51% to 124,000 (2019). Unfortunately, this shortage is expected to continue to grow over the next few years. The IT skills shortage affects not only the IT companies themselves, but also the companies wanting to implement change.
If a company decides for a transformation to SAP S/4HANA just before the cut-off time, consulting firms may not be adequately staffed and staffing shortages will occur. The law of supply and demand will drive up the prices if companies continue putting off the conversion. In Austria alone, there is currently a shortage of 1,000 SAP consultants who will be lacking during the changeover to the latest SAP solution S/4HANA, according to the SAP user group DSAG. DSAG's statement is correct: there is a shortage of SAP consultants. While they are rare on the market, we can see that they do exist. To save companies' own search efforts and high costs, it makes sense for them to have a specialized partner on board and in good time who already has the relevant experience.
Checklist:
- Inform yourself early – Don't wait too long!
- Conduct workshops
- Set your focus
- Arrange for a smooth changeover
Author: Marvin Tubic
