HR and Technology Adoption

It is no more a revelation to say that effective human resource management is positively correlated with the financial performance of an organization. Companies that have contemporary HRM tools and supporting policies find the necessary lubrication to chug along in the corporate world, where hyper-competition and technological evolution have often left companies scrambling to catch up.

The situation in Singapore
In a country like Singapore, where technology is always at its most advanced, companies just cannot afford to be left behind. Whether this means using the updated version of an HRMS or converting legacy systems to something more advanced, Singaporean companies have a special need to stay ahead of their competitors.

The unique combination of a quirky business culture and the need for superior technology adoption have influenced Singaporean companies’ HR policies and corporate culture. Not surprisingly, Singapore is one of the largest markets for HRMS or Human Resource Management Systems. Countries like China, India or Vietnam have a lower penetration of HRMS when compared with Singapore.

Leadership qualities, HRM and financial success
There are a few published studies that have found a strong correlation between technology adoption and the openness and knowledge of CEOs. This correlation is particularly important in a place like Singapore, where technology adoption is initially slow but soon catches up with international standards. Let us take a look at two studies that provide significant insights:

Irene K.H. Chew from the Nanyang Business School teamed up with Basu Sharma of University of New Brunswick to study the effects of HRM practices and culture on companies’ performance. They noted the importance of human resource effectiveness and organizational culture on financial performance. The study also revealed that the companies that were involved in acquisitions and mergers revealed a better financial performance when they had a suitable organizational culture and effective HRM. Effective HRM can result only when companies adopt contemporary HRMS.

Chew and Sharma (2005) also found that whenever organizations and companies were headed by elite leadership skills, human resource effectiveness was higher, along with an improved financial performance. The study seems to imply that those leaders who are open to new ideas are more capable of bringing companies to financial success by adopting new technologies such as HRMS.

We have already come to realize that in Singapore, organizational culture is heavily dependant on technology adoption. The reason why Singapore is one of the most advanced countries in Asia is because of the thrust it gives to technology adoption, though it may be initially slow. With the government too encouraging SMBs to adopt data analytics and infocomm, it is only a matter of time before we see more pervasive adoptions of tools like HRMS.

Innovative and open CEOs help in technology adoption

In an article titled “CEO characteristics, organizational characteristics and information technology adoption in small businesses”, J.Y.L. Thong and C.S. Yap describe how the personality characteristics of CEOs influence technology adoption in small businesses. Their results are consistent with the study undertaken by Chew and Sharma (2005) at the Nanyang Business School.

Thong and Yap (1995) explored the importance of IT way back in the 1990s. They also described the initial hesitation among Singaporean SMBs to adopt information technology, a trend that we see often today when it comes to adopting robust HRMS tools. What sets this study apart from the previous once is that they describe two different reasons which influence the adoption of IT in SMBs: individual characteristics of the CEO and also the characteristics of an organization in general.

The study concluded that small businesses were more likely to adopt IT if the CEOs were innovative and open to new ideas. The authors also concluded that SMBs are more likely to adopt IT if the CEOs have a positive attitude towards IT and had greater knowledge about information technology processes. If we were to connect the findings of this study with the previous, it becomes clear that companies that are headed by innovative CEOs who are open to learning are more likely to adopt new technologies.

These are the same companies that will also report better financial results at the end of the year. Chew and Sharma (2005) concluded that innovative leaders at firms and companies tend to adopt better human resource management techniques, which is positively correlated with financial performance as well.

What if the CEOs are not open to technology adoption or innovation? The Singaporean government intervenes:

The Singaporean government is working towards getting companies to adopt technology, regardless of how open or innovative their CEOs are, or not. Most Singaporean companies are ahead of companies in other Asian countries, especially in South and South-east Asia. Nevertheless, Singapore has to play catch-up with companies in Europe, North America and Japan. With that in mind, the Singaporean government has begun to lure local small to medium business (SMBs) to adopt new technologies that may help increase productivity.

Singapore offers SMBs subsidies and tax rebates, when it comes to technology adoption. It was announced that the government will hand out almost $400 million over the next three years so that SMBs begin to adopt infocomm technology. One of the key goals of Singapore’s government is to help SMBs adopt information technology in a way that will boost national economy.

The funds will be distributed through Infocomm Development Authority of Singapore (IDA) and will encourage companies to adopt high-speed connectivity, cloud computing, data analytics and participate in the national free Wi-Fi network. The plan is an ambitious one, but it reflects the importance that Singapore has given to adoption of technology. It is no wonder then, that Singapore’s culture places emphasis not only on technology adoption but also on effective management styles that boost productivity at large.

Linking the two studies with HRMS adoption in Singapore

The first study describes how better human resource management techniques lead to better financial performance. Certain leadership qualities such as innovation, openness to new ideas and eagerness to learn and adopt technology are crucial to a company’s financial health. Effective human resource management, which includes adoption of HRMS, is central to this path to success. Similarly, the second study highlights the importance of a CEO’s characteristics such as openness and positive attitude towards IT, when it comes to adoption of information technology. It also highlights the importance of an organization’s characteristics as a whole as well, when it comes to adoption of IT.

What must CEOS do?

If we were to evaluate HRMS technology adoption from a Singaporean perspective, CEOs need to be more attuned towards the benefits of HRMS and other technologies while having a positive attitude towards information technology. CEOs must also ensure that they expose their staff and employees to newer technologies so that the process of adoption is smooth.

With the Singaporean government pushing a ‘technology-first’ agenda, it is only a matter of time before human resource management is synonymous with HRMS. If you run a small or medium sized business in Singapore, adopting HRMS will ensure that your company is perceived to be open and flexible towards emerging technologies. And that can work as a great image-booster in the corporate world.

References:

1. Irene K.H. Chew, Basu Sharma, (2005). The effects of culture and HRM practices on firm performance: Empirical evidence from Singapore. International Journal of Manpower, 26 (6), 560 – 581.

2. J.Y.L. Thong, C.S. Yap, (1995). CEO characteristics, organizational characteristics and information technology adoption in small businesses. Omega, 23 (4), 429-442.