The Impact of COVID-19 on Human Capital Management (HCM)

The Impact of COVID-19 on Human Capital Management (HCM)

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By Luke Marson, President, Americas at iXerv

COVID-19 has had a profound effect on the world in a way which many of us have not seen before. The human and economic impact is wide ranging and the consequences will be far-reaching and could continue for months or even years.

In many countries and across multiple states in the United States, non-essential retail, restaurant, and bar businesses have been forced to close or minimize operations to only take away/collection or delivery. In some cases, businesses are not able to offer these types of services and remain completely closed with no operations. Other businesses have enforced social distancing policies and, as such, have had to close operations. Manufacturing businesses are heavily impacted. In other industries – such as healthcare and logistics – business can be booming. All of this means that every business has had changes to their operations enforced on them almost overnight without any time to plan for such a largescale event.

What is the impact on human resources (HR) and SAP customers?

HR is under heavy strain at the moment due to a number of challenges:

  • Managing the health of the workforce and ensuring optimal business-as-usual.
  • Working through furloughs and workforce reductions, etc.
  • Rolling out guidelines and procedures and providing support to the rollout of technology to enable employees to work from home.
  • Reviewing and implementing legal changes with regards to sick pay, payroll, and more.
  • Understanding the options regarding government support, such as payments or loans to cover loss of revenue or cover the costs of maintaining the workforce.

As a result, HR departments are largely postponing new projects and – in some cases – canceling or postponing existing projects. HR’s workload has increased significantly and the resources and budget required for projects that are typically lower priority than others at companies is no longer available. With companies seeing revenues rapidly disappear, conserving cash flow is being viewed by many as a more critical need than delivering HR projects – no matter what the ROI on those projects.

Another aspect to consider when trying to manage employee health is that collecting employee health data is subject to regulations in different countries and regions. The Health Insurance Portability and Accountability Act (HIPAA) in the United States and the General Data Protection Regulations (GDPR) in the European Union (EU) both provide regulations that may make recording data difficult, if not impossible. Legal counsel should be consulted before deciding if recording data can be done legally, even if it is in the best interest of the employees who are protected by the laws in question.

What can HR do to manage the impact of the COVID-19 pandemic?

This is the hard part, as there is no “one size fits all” approach to deal with a pandemic of this nature. The important thing to do is ensure that you are able to make your employees as productive as possible while ensuring the safety of the entire workforce. The balancing act is a difficult one. Social distancing and stay-at-home orders mean that some businesses simply cannot operate.

It is also recommended to study the various legislation that has been enacted in each of the countries in which you operate. Much of the legislation that has been enacted includes rules, regulations, and payments from the government and/or to employees that have a direct impact on your business. Not only are the impacts going to impact how you treat employees, but also it will impact your payroll operations and may require urgent updates to your internal HR and payroll systems.

What is SAP doing to help its HCM customers?

SAP is doing several things to support its HCM customers:

In addition to these offerings, SAP employees are working remotely and SAP has canceled in-person meetings and restricted employee travel.

What are SAP SuccessFactors’ partners doing?

A few SAP SuccessFactors partners have begun offering complimentary services and solutions to customers. Some examples include:

Some other HR vendors have also offered functionality or products for free, such as ServiceNow and Benefitfocus.

According to experts, the current global disruption to businesses and employees is expected to continue in the coming months. SAP customers should continue to monitor the offerings SAP develops and the updates they announce in the coming weeks as information that may impact their systems and business processes is changing daily.

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