Outsourcing HR can optimise human capital
Outsourcing HR can optimise human capital

Complex labour legislation is among the many reasons why more companies are choosing to outsource their human resource (HR) function to specialists while they focus on delivering on the core strategy.

Organisations of all sizes can benefit from going the outsourced route as it delivers good return on investment and reduces the risk of human capital.

Curbing cost and reducing risk

In fact, the main drivers of outsourced HR services are built around reducing the cost and risk of the following critical elements:

  • Recruiting unsuitable candidates;
  • Non-compliant employment contracts;
  • Remuneration and deductions calculation errors due to non-compliance;
  • Non-compliant policies and procedures;
  • Non-compliance with the Employment Equity Act (EEA) which can see fines starting at R1.5 million;
  • Flawed disciplinary processes and procedures; and
  • Issues relating to the staff exit process.

When is the right time to outsource?

  • As soon as possible.
    • Employment legislation governs the employer-employee lifecycle, so expert HR services are needed from the start;
  • When you are experiencing growth.
    • As the business grows, so the compliance requirements become more complex. Once the employee count exceeds 50, or annual turnover exceeds the threshold for the industry the company is operating in, it must start complying with the EEA;
  • Regaining core focus
    • It is essential for the business to leave the day-to-day HR issues to the professionals so it can focus on its strategic priorities.
Selecting outsourced services

For an SME, the most important services are the following:

  • Employment contracts;
  • Policies and procedures;
  • Remuneration/deductions;
  • Performance management;
  • Disciplinary procedures;
  • Retrenchment;
  • Employment equity; and
  • Workplace Skills Plan/Annual Training Report.

Procedurally, these can have a huge impact on the business if not done correctly.

Selecting a services provider
  • Expertise
    • Ensure the service provider is registered with the SABPP (SA Board for People Practices), the professional body for HR practitioners in South Africa, as well as the quality assurance body for HE learning provision;
  • Pricing
    • You get what you pay for. The services might be affordable, but this is usually an indication that they are not comprehensive. Many clients end up at the CCMA because they chose to use a cheaper outsourced HR service. Ultimately, this will cost your business more money in the long-run.
  • Reputation
    • Based on testimonials from other clients.
  • Cultural fit
    • The chosen HR service provider must be able to adapt to your needs. The best way to do this is to “become one of their employees” to provide the service. They must develop a one-on-one relationship with each client, underpinned by a personalised service. Agility is key – the ability to fit in with the client’s culture and systems.
Benefits for employers
  • Reduced risk, cost savings (fewer CCMA cases and fewer penalties); and
  • Return on investment (Skills Development Levy rebates).

Benefits for employees

  • Access to a professional and impartial opinion when faced with HR issues, e.g. a disciplinary hearing is chaired by a truly independent chairperson. This ensures that the hearing has a fair outcome and reduces the risk of the employee taking his/her case to the CCMA (which is also beneficial for the organisation).
Migrating your payroll to the cloud
Ever considered migrating your payroll to the cloud?

While the arrival of multinational data centres in South Africa has prompted more organisations to consider moving to the cloud, some are still hesitant to migrate their payroll to this environment. According to Ian McAlister, General Manager of CRS Technologies, the advantages far outweigh any concerns.

“When it comes to payroll, there are three main benefits to consider – scalability, efficiency, and strategic value. These are particularly relevant to private or hybrid cloud models which offer the most benefit to businesses in their transition to this environment.”

From a scalability perspective, the ability of the cloud to support fluctuating work loads ensures a business can grow easily without needing to invest in new infrastructure. Furthermore, companies can scale down their workload during non-peak times of the month and save on operational expenses in the process.

Because solutions and data on a private or hybrid cloud mean users have secure access to sensitive information wherever they have internet connectivity, accessing payroll solutions from there is an increasingly efficient way of doing business. Given how cloud-based platforms must comply with all regulatory requirements around data protection, businesses can focus on their core mandate while leaving the security to the professionals.

In terms of strategic value, using cloud-based payroll solutions not only streamlines work processes because the service providers manage the required infrastructure, it also better enables collaboration between departments and gives organisations a competitive advantage over those still encumbered by on-premise solutions.

“Tying all this together is the ability of private and hybrid cloud models to provide payroll departments with a customised environment that can suit the specific needs of the organisation. The service provider typically is also able to provide the business with add-ons via a partner network that can further enhance the data analysis capabilities of HR and payroll,” McAlister says.

Overcoming obstacles

Of course, this does not mean there are not challenges to navigate when migrating to the cloud.

“Decision-makers are still concerned about the availability and security of data stored in the cloud. With the complexities of the regulatory environment continually shifting the goalposts on how data needs to be protected, organisations must understand the implications of moving sensitive payroll data and the financial and reputational repercussions if this is compromised.”

After all, if customers (and employees) feel unsafe with their service provider (and how it stores records), they will move to a competitor or change companies.

With the likes of the Protection of Personal Information Act (POPIA) in South Africa and the General Data Protection Regulation (GDPR) in the Europe Union posing strict fines on companies not taking the required steps to protect data, businesses are under pressure to ensure they remain compliant. Considering the sensitivity of data associated with HR and payroll systems, having that compromised could significantly impact the business and its employees.

Industry shift

Despite these concerns, numerous international surveys with finance leaders and broader business audiences point to significant momentum building around cloud experimentation and adoption.

According to a global outsourcing survey conducted by Deloitte in 2018, 93% of companies said their organisations were adopting or considering the cloud. In a poll of nearly 3 000 finance and business leaders conducted during a Deloitte webcast, 41% said they had cloud technologies in place or were in the process of implementing. Another 16% said they were assessing cloud options. A further 48% of finance executives polled in the webcast said cloud technology would be critical to the performance of their finance organisation in two years’ time.

This is also reflective of the South African environment.

IDC research shows that 93% of local companies are developing cloud strategies and are either in the implementation phase or planning implementation soon. Furthermore, the IDC predicts that spending on public cloud services will nearly triple over the next five years, up from R4,29 billion in 2017 to R11,53 billion in 2022.

“Adding further impetus to this is that more multinational organisations plan to launch data centres in the country,” says McAlister. “This will address many of the regulatory concerns around where data is stored, as well as the speed of accessing information on servers.”

Partner-led

“Decision-makers must understand that the cloud, for all its benefits, is not a silver bullet that solves all payroll challenges. The organisation must first understand what it hopes to accomplish from the cloud. A business case must be developed, and the strategic deliverables aligned to the model best suited to the task at hand.”

From a payroll perspective, the sensitive nature of the data at hand and the critical importance of these departments for business growth, mean the ideal environments would be either a private cloud or a hybrid model. The public cloud is simply not secure enough for these vitally important data stores.

“Companies need to select a partner capable of delivering either a private or hybrid cloud offering, based on their specific requirements. This partner must have the best practice experience of operating in these environments and be able to assist with change management to educate users on how to get the most value out of their payroll applications in the cloud,” McAlister concludes.

Be wary of recorded conversations
Be wary of recorded conversations – companies may be within their rights to secretly record conversations with employees

Contrary to popular belief, companies may be within their rights to secretly record conversations with employees and use that information against them in a court of law. However, the reverse is also true. Nicol Myburgh, Head of the Human Resource Business Unit at CRS Technologies, says this has the potential to significantly change the dynamic in the workplace.

According to Section 4 of the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA), it is not illegal to secretly record a conversation you are party to. But it is still illegal to do so as a way of intercepting communications to commit an offence, for example obtaining a person’s bank account information.

“The argument that recording these conversations infringes on an employee’s (or employer’s) right to privacy is outweighed when using the recording in court is in the interests of justice. Of course, there is nothing prohibiting the addition of an explicit clause in employment contracts that mitigates against the risk of having communications intercepted.”

Smartphones and tablets come standard with audio recording features, making it virtually undetectable

Technology has made it incredibly easy to record conversations without other parties being aware of it. Most smartphones and tablets come standard with audio recording features, making it virtually undetectable when somebody runs the app and puts the phone or tablet out of sight.

“Often, these conversations can be used as evidence in disciplinary hearings and other disputes even before they go to the CCMA or court. Further complicating matters is that courts do not hold privacy rights as absolute. Instead, they take other factors into account that can trump privacy rights.”

An example of this is in Harvey v Niland, where evidence was obtained by hacking into the respondent’s Facebook account. Evidence can therefore be presented in various forms and not necessarily only in the form of an audio recording.

Nevertheless, it remains in the best interests of either party to obtain recordings legally. From an employer perspective, fair process must be followed, with the employee being given an opportunity to respond to the evidence presented against them.

If you are a third party, you need informed consent

“From a legal perspective, it should also be noted that either party can record a conversation that they are part of. But if you are a third party, you need informed consent from one of the other parties to legally record that conversation. It is often this consent that confuses people into thinking all parties must agree to have a discussion recorded.”

Of course, if the recording is inaudible then it cannot be admissible. Myburgh says that employers or employees therefore need to ensure that the audio can be heard, and that the data is stored in a safe place to avoid it being lost, deleted, or edited in a way that will also make it inadmissible.

“Companies are operating in a dynamic, technology-driven environment. It should always be assumed that any conversation or meeting will be recorded, like assuming all work email will be read by a supervisor. In this way, both the employee and employer can ensure no mismanagement takes place.”

The impact of compliance on cloud and the payroll

Impact of compliance on cloud and payroll

The impact of compliance on cloud and the payroll

At a time when so much attention is placed on the General Data Protection Regulation (GDPR) of the European Union and the Protection of Personal Information Act (Popia) in South Africa, companies must consider a plethora of permutations when it comes to the hosting of their data. Ian McAlister, General Manager of HR (human resources) and payroll specialists CRS Technologies South Africa, believes this is especially critical when it comes to sensitive HR and payroll data.

“The regulatory environment is such that companies face significant financial fines if their data is not stored and maintained according to compliance requirements. Even more significant is the reputational damage to a brand when customer data is compromised. Given the competitive landscape, it is easy for an end-user to migrate to another service provider and never return. Considering the sensitivity of data associated with HR and payroll systems, having that compromised could even more significantly impact the business not to mention its employees.”

All these factors add to the pressure on decision-makers to seriously consider the merits of going the cloud route.

“Irrespective of whether an organisation chooses a private or hybrid environment for HR and payroll systems, the reality is that data has become mission-critical to the running of a business. Without the ability to access and analyse it, no company can hope to remain competitive. And if internal data is stolen or subject to ransomware, decision-makers are threatened on a fundamental level.”

Consider some of these statistics. By 2020, every person will generate approximately 1.7MB of data per second. Also by that year, the accumulated volume of big data will increase from the current 4.4 zettabytes to approximately 44 zettabytes (equal to 44 trillion GB). Google now processes more than 40 000 search queries per second. According to InternetLiveStats.com, when the company was founded in 1998, it was serving 10 000 search queries per day.

“The sheer amount of data means businesses must be more aware than ever about meeting regulatory requirements. One weak link in the chain is enough to potentially bring down the entire organisation. It is vital for a business to partner with a service provider that can assist in meeting compliance requirements while still being able to provide the functionality and benefits of a private or hybrid cloud environment.”

McAlister says this requires a balanced approach that shows the organisation is giving serious consideration to how and where sensitive HR and payroll data is stored while still innovating.

“The private and hybrid cloud environments bring with them all sorts of business advantages. However, this must happen within the regulatory requirements if the organisation is to truly take its strategic deliverables to the next level,” he concludes.

To read more about this topic, click here to download our free White Paper ‘Enhancing Payroll with the Cloud.

Addressing compliance concerns through outsourcing

The South African corporate landscape is highly regulated from an HR and payroll perspective. Businesses must keep up to date regarding the required statutory updates or risk significant financial penalties.

Unfortunately, small business owners are often unaware of these aspects as they rely on in-house skills and systems to manage this. This is where the importance of outsourcing to a specialised partner can make a significant difference assisting the small business owner to register with the relevant industry bodies and keeping up to date with changing legislation.

Non-compliance pitfalls
  • Incorrect calculation of statutory deductions.
  • A failure to submit statutory submissions to industry bodies like the Department of Labour and SARS.
  • Multiple levels of compliance put pressure on small businesses which may not have the capital required to invest more in their payroll capacity.
Risks of non-compliance
  • With monthly salary spend being one of the largest expenses of a small business, non-compliance carries significant financial penalties that can potentially cripple the company or force it to close.
  • HR regulations continually evolve. The legal ramifications of non-compliance and the impact on the HR department, the business, and its employees can be very serious. For example, all designated employers are required to comply with the Employment Equity Act. The cost of non-compliance starts at R1.5 million.
  • Even though an HR generalist may know a bit of everything, the legislative environment requires a specialist given the oversight of such industry bodies as the Department of Labour, SARS, and SETAs.
Benefits of outsourcing compliance
  • Outsourcing compliance empowers companies operating throughout Africa to ensure they meet all regulatory requirements of the countries in which they have a presence.
  • When compliance is managed by employees, they typically work in isolation from other functional specialists. This increases the risks of non-compliance when new legislation is applied. However, to develop in-house risk management and compliance capacity, it is advisable to enter an approved and legal consortium or joint venture, or association with practitioners in related non-HR or employee relations specialisations.

The reality is that when a company faces an audit, investigation, or even litigation, ignorance of the law is no defence.

In the complex environment of employee compensation, benefits, and related issues, it is critical that a small business works with a knowledgeable and trusted partner who specialises in all relevant aspects of compliance.

Enhancing Payroll with the Cloud white paper

Selecting a cloud approach for your payroll – by Ian McAlister

With public, private, hybrid, and even hyper-scale cloud solutions available to decision-makers, it is easy to become confused by all the technical differences. Ian McAlister, General Manager of HR (human resources) and payroll specialists CRS Technologies South Africa, discusses the options relevant to HR and payroll departments.

“It is important to note the differences between these offerings to make sense of their ability to provide a compelling business case for the sensitive data driving HR and payroll departments irrespective of company size or industry sector.”

Microsoft defines the public cloud as computing services offered by third-party providers over the public internet. These are then made available to anyone who wants to use or purchase them. They may be free or sold on-demand, allowing customers to pay only per usage for the CPU cycles, storage, or bandwidth consumed.

“For HR and payroll departments this is the most problematic format of the cloud. Because the services are offered over the public internet, the sensitive nature of data stored in these critically important business divisions makes for a high degree of risk for compromise.”

The long-term risks far outweigh any immediate gains

The financial and reputational damage if this data is lost, compromised, or becomes unavailable due to the cloud provider going down are too significant. While going this route is tempting from a speed perspective, the long-term risks far outweigh any immediate gains.

“The antithesis to this is the private cloud. This particular model of cloud computing involves a secure cloud-based environment in which only a specific client can operate. In other words, it still provides the computing power and other benefits of a public cloud, but the resources are only accessible by a single organisation.”

This, McAlister believes, is the ideal approach for HR and payroll departments.

“Only one company can configure and manage the cloud environment which also means it can be completely customised to the specific requirements of the organisation. This is an inherently more secure solution while still providing the business benefits of going the cloud route.”

As the name suggests, the hybrid cloud provides a combination of both the public and private models. Without going into the technical details, a company receives the flexibility and computing power of the public cloud for non-sensitive tasks, but can keep business-critical applications and data on-premise.

“Many local organisations who are using productivity suites like Office 365 while still focusing on on-premise applications are essentially hybrid cloud adapters. I anticipate that with the recent launch of two Azure data centres in South Africa, an increasing number of organisations will consider going this route.”

Designed to accommodate an increasing demand

Finally, the hyper-scale cloud is a distributed architecture designed to accommodate an increasing demand for internet-facing and back-end computing resources. This is the kind of cloud computing run through the likes of Facebook, Google, and Amazon.

“While this might be of a bigger scale than is required for HR and payroll departments, it is good to be aware of the potential it brings to the cloud market in its entirety. Hyper-scale computing provides important insights into the trends shaping the cloud. From a practical standpoint, however, most organisations will either go the private or hybrid route.”

McAlister says that from an HR and payroll perspective, the public cloud is simply not a valid solution for organisations looking to migrate. The security and availability aspects alone should be enough to see the move to either private or hybrid options.

To read more about this topic, click here to download our free White Paper ‘Enhancing Payroll with the Cloud’.

Consider the security implications for payroll when adopting cloud solutions

The recent launch of two multinational data centres in South Africa has placed renewed focus on the benefits that the cloud can provide businesses. Ian McAlister, General Manager of HR (human resources) and payroll specialists CRS Technologies South Africa, believes that when it comes to sensitive payroll data, there are caveats to be aware of when migrating to the cloud.

“Availability and security were the two biggest stumbling blocks to enterprise adoption of the cloud in 2007. Fast forward to 2019 and decision-makers still face these concerns. Even though both elements have improved significantly, addressing data availability and security will always be a priority for organisations, especially given the evolving regulatory environment.”

Because data in a cloud environment is accessed through the web, it is inherently less secure than a dedicated hosted solution (where companies have a dedicated server at a secure location with applications that can be customised to their unique requirements).

For example, the Microsoft Remote Desktop Protocol (RDP) provides companies with a significantly more secure method of connecting to hosted servers, as opposed to the ‘public’ access to the cloud.

Not understanding the implications when moving important data (such as those stored in payroll and HR systems) could have significant financial and reputational repercussions,” McAlister warns.

“Data has become fundamental to business growth in the digital business landscape. Companies rely on data analytics to draw insights and customise offerings for customers, while end-users share personal information to ensure a tailored experience that reflects their likes and dislikes.

Now imagine a world where that data has a bullseye painted on it. Nobody is safe, and no organisation is too small or too large to be compromised. According to the 2018 Cost of a Data Breach Study, the average cost of a data breach globally in 2018 is $3.86 million.”

“Clearly, there is significant risk for HR and payroll departments,” McAlister continues.

“The potential for compromise when using the public cloud (computing services offered by third-party providers over the public internet) is simply too great. Instead, companies must investigate the opportunities that private (a secure cloud-based environment in which only a specific client can operate) and hybrid cloud (a combination of both public and private cloud approaches) solutions provide, while still ensuring sensitive data is kept safe.”

McAlister says that these more secure cloud offerings provide a range of benefits for HR and payroll departments, given the real-time environment of business today.

“These offerings typically deliver automated, real-time and exception-based options for departments to carefully manage sensitive data. They also provide decision-makers with the ability to validate transactional and input data at the source (depending on the provider and solution used). This enables departments to not only improve their speed to market, but also reduce the strain on administrative staff.”

While it does bring immense value, the cloud should not be viewed as a silver bullet to address all organisational challenges when it comes to HR and payroll. Instead, McAlister says companies need to focus on the strategic value that private and hybrid cloud offerings can provide, while remaining focused on security and data compliance fundamentals.

To read more about this topic, click here to download our free White Paper ‘Enhancing Payroll with the Cloud’.

The importance of outsourcing your payroll have many benefits

One of an organisation’s biggest overheads is that of salaries and wages. And yet, if these are not processed on time, it can negatively impact staff morale and create the impression that the company is not financially stable.

For a small business, the payroll is normally the responsibility of an accountant or bookkeeper, but even administrators can sometimes be roped in to do the job, even though they have no expertise in the matter. This is where the value of outsourcing your payroll comes in.

When should you outsource?

  • If you want to grow your business but are not aware of ongoing legislative changes that could pose a risk to your company, then it is better to get professionals to assist.
  • Accountants and bookkeepers are not specialists and do not keep up with the compliance environment. If you outsource your payroll, you enable them to focus their core duties and not get bogged down by legislative complexities.

How to choose an outsourced service provider

Understandably, payroll is a sensitive subject dealing with highly confidential information. This is often the last thing a small business owner wants to outsource. It is therefore vital that the company does its homework and researches the potential outsourcing partner thoroughly.

Instead of going with the first available service provider or the cheapest one, here are some questions to ask:

  • Is the service provider a one-man band and, if so, what backup resources are available?
  • Is the service provider a recognised payroll provider belonging to a professional body?
  • Do they have the necessary training and skills on payroll?
  • What does the service provider do to ensure it stays up to date with legislation?
  • How secure is the payroll data and can the service provider take on historic data?
  • How easy is it to recover your payroll data in the event of a disaster?
  • What value-adds can the service provider offer? These can include anything from leave management and third-party payments, to employee self-service, time and attendance management, and any other related human resource service.
  • Can they process salaries and/or wages hourly, weekly, fortnightly, or monthly?
  • Can the service provider accommodate your growth requirements if you open new branches?
  • Is the service provider able to assist with payrolls in other African countries, manage their currencies, and deal with their regulatory environments?
  • What processes are in place to ensure the timeous processing of payrolls?

The advantages of outsourcing your payroll

One of the most obvious benefits of going the outsourcing route is freeing up your resources to focus on your core strategic objectives. This ensures you provide quality of service and control costs while an experienced partner takes care of your payroll.

Here are a few other benefits:

  • Reduce operating costs.
  • Statutory compliance and consistent service delivery.
  • Access to the latest technology, as well as skilled and dedicated payroll resources.
  • Access to a secure, risk-free and confidential payroll environment.
  • Increased flexibility and responsiveness.
  • Streamlined internal processes and procedures.

HR and payroll specialists CRS Technologies and Microsoft partners DAC Systems have integrated employee master data and leave balances into the Microsoft Dynamics 365 for Talent solution, a first of its kind in the market.

“Combining the respective strengths of these organisations, we have developed an innovative solution that will greatly enhance how HR and payroll departments manage the talent in organisations,” says Ian McAlister, General Manager of CRS Technologies South Africa.

This partnership enhances the Dynamics 365 for Talent solution to simplify the process and pitfalls of dealing with the human factor legally and fairly. Elements such as the drafting of policies and procedures encompassing equity policies, disciplinary codes, leave entitlement, and retirement terms are all instrumental in ensuring the smooth running of HR and payroll departments.

Additionally, D365 for Talent enhances the recruitment process by streamlining the developing job specifications, assisting with screening, conducting reference checks, managing the pre-interview process, as well as conducting background checks and psychometric testing.

“We are especially excited by the introduction of this payroll functionality as it links the system into the financial back-end of the organisation to make all aspects around this as seamless as possible. Being the first in the market to develop this feature, CRS and DAC are leading the field when it comes to HR and payroll integration between CRS and D365 for Talent. The user-friendly design ensures talent practitioners can work more strategically with the solution, automating much of the manual, admin-intensive features,” says McAlister.

With this payroll integration, Dynamics 365 for Talent extends its functionality beyond traditional HR management to provide a complete value proposition for HR and payroll departments. Additional components and features will be rolled out later.

“This solution is designed to improve aspects of the HR and payroll function inside organisations. Furthermore, our personalised approach means Dynamics 365 for Talent can be customised to suit the needs of any business, irrespective of industry,” concludes McAlister.

Motivated employees drive business success – listen and understand to what your employees want

With only 15 percent of employees globally engaged with their jobs, according to Gallup, executives are finding it tough to get people more actively involved in the business. The days of simply doing a job and getting paid for it are long gone. In the digital workplace, employee engagement is vital to boosting productivity, reducing staff churn, and improving customer satisfaction and company culture.

Ian McAlister, General Manager of CRS Technologies, believes issues such as a lack of recognition, very little organisational transparency, and a divide between senior management and the rest of the staff are contributing to employee apathy. He says that engagement should focus on motivating employees to give their best at work. This risk-free talent administration will enable the business to deliver on its strategic mandate more effectively. And in an ultra-competitive environment, this is vital for growth.

“Companies can ill afford to ignore their employees in these difficult times. Instead of passing the problem on to HR, the leadership should take the time to leverage research around human behaviour and neuroscience to deliver on a more emotionally-driven work environment rather than one that is financially-driven. It is about management listening to and understanding what their employees want and taking the necessary steps to deliver on this.”

neuroleadership – SCARF model

Without going into too much of the scientific detail, McAlister cites Dr David Rock’s (who coined the term neuroleadership) SCARF model, which uses neuroscience as a way for people to work more effectively with one another. He identifies certain ‘domains’ or ‘levers’ which impact on people’s behaviour in social situations and provide employers with a useful roadmap to understand and influence each other’s behaviour more effectively. Rock argues that humans will move towards or away from engaging more deeply, depending on the extent to which these levers are present in an organisation.

The levers are:

  • Status – the need for workplace significance: In other words, our relative importance to others. For example, the manager feels he or she can do the job well and so provides extensive feedback on what the other person should do differently. The person feels this as a threat to his or her status.
  • Certainty – the need for workplace predictability: This is about our ability to predict the future. For example, managers do not understand the importance of clear expectations so they may not generate a feeling of certainty.
  • Autonomy – the need to influence the impact of the workplace: This is our sense of control over events. For example, managers often micromanage, and therefore do not give employees a sense of autonomy.
  • Relatedness – the need for human connection, support and empathy: This refers to how people relate to their peers. For example, managers often do not connect with people on a personal level for fear of being too close to them. And yet, this ‘closeness’ is vitally important.
  • Fairness: the need for consistently equitable treatment: This refers to the degree of fairness we perceive the exchanges between people to be. For example, managers do not understand the importance of a sense of fairness, so they keep things secret.

Based on extensive research

Rock’s SCARF model is based on extensive research showing how these five levers activate the same threat and reward responses in people’s brains that are used for physical survival. In other words, it is about an organisation minimising threats to employees and maximising rewards.

“Ultimately, this boils down to empowering people with more opportunities to make a meaningful difference to the organisation, and recognising them for it,” says McAlister. “This reward does not necessarily have to take a monetary value but can be something as straightforward as heralding them at a staff meeting or even taking them for lunch to more actively engage with them.

“It has become too easy to throw technology at the problem in the hope that it will remedy all organisational ills. But there is something to be said for organisations who are prepared to listen to their employees, relate to them, and develop strategic interventions that make them feel like an integral part of the business.

“Pioneering organisations are increasingly challenging the conventional role of performance management in the employee engagement space and seeking alternatives that serve to better inspire employees. It’s about turning the traditional staff appraisal on its head and coming up with more innovative ways of measuring performance. This is also where initiatives like employee wellness come in.”

It’s also about leveraging continuous and collaborative conversations with employees around shorter term goals and identifying and resolving barriers to achieving goals rather than simply ticking boxes to what makes a good employee, McAlister continues.

“Management should harness ideas around how to manage the things employees are threatened by and show them that they do care about them as individuals, not just as cogs in a machine. An employee engagement strategy that seeks to better inspire and motivate people should incorporate an emotional and ‘human element’.”

In a world where digital solutions and technology have become such a natural part of our working environment, organisations who are willing to reintroduce the ‘humanness’ of their relationships with employees will not only create a more engaged workforce, but also drive future business growth. And the advantage of this new way of approaching talent management is that it is without any risks to the organisation.

“Employee engagement is not a glorified human resources tactic. It is a fundamental component of the successful business today. This will help instil an organisational culture ripe for success that will attract the best talent, the best customers, and the best business benefits.”

For more information on the tactical elements required to drive employee engagement and to read more about the SCARF model, please contact us. We also provide thought starters on how best to conduct a survey with your staff and obtain the necessary information to affect organisational change.