Technology can play a crucial role in empowering employers and human resource professionals to meet the demands of the labor force in Southeast Asia. By leveraging HR technology, they can automate administrative tasks, streamline processes, and offer self-service access to an array of HR functions through a platform. This shift enables HR teams to focus on strategic initiatives and engage in more personal interactions with employees.
Digital tools can also provide employers with insights into employee engagement, performance, and well-being. These insights can allow them to better address concerns and enhance employee satisfaction, fostering an environment that meets the evolving needs of the labor force.
Holistic and localized HR management
HR functions encompass various activities related to managing an organization’s workforce. Common HR functions include recruitment, employee onboarding, compensation and benefits, employee engagement and retention, employee relations, and performance management.
Most organizations seek solutions that can manage these functions on a single, holistic platform. However, localization can be a complex process. Each market follows its own unique set of labor laws and operations. Depending on the country of operation, organizations may need to collect different types of employee data and set up distinct workflows and payroll calculations.
Several companies are developing solutions to address this complexity.
For example, Malaysia-based company BrioHR is creating an all-in-one HR solution for small and medium enterprises by localizing its platform-based solution to each country’s unique employment practices and regulations.
Sprout Solutions from the Philippines helps companies navigate the country’s labor regulations with its own platform. It acquired process automation platform Linnia in 2020, enabling the incorporation of automation for repetitive HR and procurement tasks onto its platform.
Singapore-based HR tech startup Skuad has gone a step further by adapting its platform for remote hiring. Skuad allows companies to hire, onboard, and compensate employees and contractors without the need for local entities. It can help clients handle local compliance requirements, adhere to regulations, and provide localized benefits and insurance packages.
Apart from streamlining different functions together, HR tech startups are also innovating to optimize individual functions. One example of this is the transformation of talent acquisition processes using artificial intelligence.
AI in talent acquisition
Manually reviewing a large volume of applications with traditional recruitment methods can result in missing out on top talent. In contrast, AI can review application materials at scale to identify candidates with relevant qualifications and skills for a particular position. It can also analyze social media profiles and publicly available data to gain a better understanding of a candidate’s capabilities and experience. Using AI, recruiters can cut through the noise and spend more time engaging with high-potential candidates.
For example, Singapore-based startup Impress.ai has created an AI-powered platform that automates the entire recruitment process. In 2021, its virtual recruiter solution reduced DBS Bank’s time to hire by 75%, saved up to 40 staff hours each month, and resulted in more than 880 successful hires across Asia.
Thai startup Manatal also provides an end-to-end recruitment and onboarding software-as-a-service solution for SMEs. Its AI-powered applicant tracking system has the potential to help companies to hire faster, better, and cheaper. According to Forbes, it is working with several thousand employers in 130 countries.
One of the promising aspects of AI in talent acquisition is its predictive capability. By analyzing a large volume of data, including candidate behavior during the hiring process, AI can forecast which candidates are likely to succeed in a specific role.
Despite the increasing usage of AI in the recruitment process, Kerry McInerney (née Mackereth), a researcher at the University of Cambridge’s Centre for Gender Studies, cautioned against the efficacy of AI recruitment tools. McInerneypointed out that attributes considered crucial for being a competent employee may be intertwined with gender and race. Biases may be embedded in historical hiring data used to train AI algorithms, and could therefore perpetuate such biases in the tools’ outcomes.
An illustrative case occurred in 2018, when Amazon decided to discontinue the use of an AI recruitment engine after discovering its tendency to discriminate against female candidates.
Moreover, AI interviews can make a company seem cold and impersonal. Such tools can also be susceptible to manipulation by candidates who recite “textbook” answers to questions instead of expressing themselves genuinely.
Improving employee wellbeing
It is not sufficient to just attract talent—companies must retain them as well. Gallup estimated that low employee engagement could cost the global economy USD 8.8 trillion, equivalent to 9% of global GDP. This is why the focus on workplace wellness is on the rise.
In Singapore, workplace analytics startup EngageRocket has automated the employee feedback process to deliver real-time insights and actionable recommendations. The insights also serve as an early warning system for talent disengagement.
Adjacent to EngageRocket is Singapore-based mental health startup Intellect, which works with companies to provide better mental health support to employees. Through its platform, users can access services such as telehealth coaching, therapy, psychiatry, and self-guided cognitive behavioral therapy programs.
In Thailand, Ooca is partnering with local Thai companies to offer virtual counselling and psychiatric services to their employees. It also provides client HR teams with tests, surveys, and feedback to help them gain insight into the mentality of employees, as well as identify areas of high stress within the company.
Payroll on-demand
Southeast Asia has a substantial number of unbanked or underbanked individuals who live paycheck to paycheck. For these people, receiving their monthly wage on time might not suffice.
Earned wage access (EWA) is a financial service enabling employees to access a portion of their salaries before the scheduled payday. EWA provides financial flexibility, serving as a safety net for contingencies, and reduces reliance on predatory lending and high-interest loans, thereby alleviating financial stress.
Several startups in Southeast Asia offer companies a way to provide EWA to employees, tailored to their specific needs.
Founded by Deloitte alumna Zoey Tong, Singapore-based startup Octomate has a suite of HR modules that include automated salary disbursement and claim reimbursement, and EWA services.
A number of startups in Indonesia also offer EWA services, including GajiGesa, Wagely, and Kini. Users can pay for their utility and phone bills as well as other types of expenses directly using their apps. According to GajiGesa, its services have enabled over 80% of their users to stop using informal lenders.
In Vietnam, Gimo provides local workers with on-demand access to earned wages, while Nano Technologies enables employers to offer flexible pay to their employees. The latter focuses primarily on the retail, food and beverage, and textile manufacturing industries.
HR tech is here to stay
Southeast Asia may be emerging as a technology hub, but it’s a region where the potential of HR tech has been somewhat overlooked. Although it was once expected to become the next global HR tech hub, this idea has lost momentum since.
Nevertheless, HR tech is here for the long haul. The ‘quiet quitting’ phenomenon alludes to growing employee dissatisfaction in many parts of the world, emphasizing the need for companies to prioritize employee well-being and engagement.
By effectively harnessing technology, companies can improve employee retention, gain a competitive edge in talent acquisition, and boost productivity.
About the authors: this article is co-authored by Seah Gek Choo, Tan Shuo Yan, Teo Zhixin, and May Lee. Seah Gek Choo leads the Deloitte Southeast Asia Innovation team, a cross-function, cross-country unit dedicated to driving innovation as a long-term value creator across Deloitte’s Southeast Asia operations. This article was co-written with Tan Shuo Yan, Teo Zhixin, and May Lee, members of the team.