Imagine the future of HR. You get a message on your phone. It says that, as a result of a recent organisational reshuffle, you’re going to need to hire someone new. The message suggests a shortlist of half a dozen candidates, all of whom are well-qualified and a good fit with your organisational culture. Better still, every one of them can start within a month. All you have to do is choose those who are best suited for interview.
Most of this future is already here. Platforms such as Employment Hero offer sophisticated AI tools that help SMEs manage HR and recruitment, and this extends to predicting future needs and proactively suggesting potential candidates.
“What we do is run AI tools across our clients’ businesses, and look at areas such as the organisational structure, how often they have people leave and how long it takes them to hire,” says Kevin Fitzgerald, UK managing director of Employment Hero, a global employment management platform that is using AI to make doing business easier for SMEs. “We use that information to make suggestions like: ‘Should you be thinking about hiring now?’ or ‘Is somebody getting ready to move on and have they officially resigned yet?’”
This sort of workforce planning is immensely useful and not something SMEs have traditionally had access to (because it has required costly in-house HR and forecasting functions). In fact, in terms of recruitment and staffing, smaller companies have long been at a significant disadvantage. Now, they can access the sort of expertise and support that larger companies and multinationals use.
So how does this help smaller companies and startups? On a day-to-day basis it might mean that job descriptions are drafted and ready to go the moment someone hands in their notice. Over the medium term, it could mean that budgets can be agreed knowing headcount is likely to increase. And in the long term, it might mean planning for strategic senior hires who take a year or more to identify and recruit, or even looking at workplace premises based on future headcount expectations.
Predictive HR can be particularly useful for high-growth SMEs. Their founder-managers often have little time to strategically plan staffing and so everything is done ad hoc – and results may be sub-optimal. “When we look at rapidly expanding companies, we can often see that a team or teams may need a manager or leader soon if one isn’t already in place,” says Fitzgerald. These kinds of insights are a step-change for many smaller firms. “We get clients saying they logged on and an AI-generated message arrived saying that it’s time to think about increasing staffing in this area. This is very new and exciting for us.”
However, staffing forecasts are only the beginning. Looking ahead, AI-enabled HR platforms will be able to automate much of the employment management process. This will take in areas ranging from employment terms, bonus structures, pension contributions, holiday allowances and salaries, many of which are currently difficult and time consuming for SMEs. It will make work more efficient, but also more transparent and fair.
Bun Baillie, head of people at the mobile marketing agency ConsultMyApp, says Employment Hero’s platform has already transformed her recruitment process. “It sets up the job spec and screens initial candidates,” she says, adding that it is especially useful when dealing with inclusivity among the talent pool. “It ensures that you’re widening the net and not excluding any sort of demographic.”
Baillie adds that salary benchmarking is also very interesting. “It’s useful to see what’s out there and make sure that what you are paying is aligned with your market.” Here, Employment Hero’s SmartMatch Employment Reports provide a detailed look at wage and employment trends specifically for SMEs, using real-time data to provide insights across industries, regions, and age groups.
This benchmarking is particularly valuable for smaller businesses. They often struggle with setting the right pay range for a particular job. Typically it has involved asking around contacts, using dated survey information and gut feel. There may also be complicating factors specific to the business. For example, salaries may vary depending on who is funding the business – banks, venture capitalists or private individuals, or some staff may have equity stakes and receive lower pay as a result. But setting the right salary is key to attracting the best candidates and retaining the good staff you already have. A major study by UC Berkeley and Princeton researchers found that people often care more about how their salary compares to their peers than the actual number itself.
In a similar vein, jobseekers are becoming increasingly sophisticated when it comes to looking at the whole package companies offer – benefits such as pension, holidays, health coverage, travel, childcare and so on. This makes life even more complex for SMEs. But, again, data-driven benchmarking can help. “To remain competitive, we need to know what other companies are doing to hook the best candidates,” says Baillie. “People are no longer just looking at salaries.”
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