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Stefan Ries, the chief human resources officer and managing board member, SAP SE. Photo: Hemant Mishra/Mint
Stefan Ries, the chief human resources officer and managing board member, SAP SE. Photo: Hemant Mishra/Mint

SAP sets aside €140 million for employees to learn

Ries says if you don't give access to lifelong learning opportunities, you will definitely fall short when it comes to innovation, speed and agility

Bengaluru: The world’s third-largest software maker SAP SE’s ability to transition from being a pure enterprise software maker into a business driven by cloud computing, rests squarely on the shoulders of its employees.

As if to underscore the importance of people to the business transformation, Stefan Ries, the chief human resources officer and managing board member, is being elevated to the executive board of SAP in April. It is this board that retains the ultimate responsibility for deciding on the company’s activities.

“HR (human resources) is now in the driving seat," said Ries in an interview. He rejoined SAP in 2014 and he believes the learning ability of its employees is going to play a key role in carrying this €20.8 billion company into the digital age.

At a global all hands meet last year, SAP’s chief financial officer and chief operating officer Luka Mucic and Ries together said the company will be investing €100 million for providing learning opportunities for employees around the globe. And in 2016 they increased that commitment to €140 million (about $155 million) for the year, the highest it has ever spent on learning and development.

In the US, in 2015, companies spent a total of $70.6 billion on training and development, and large companies spent an average of $12.9 million, said the 2015 training industry report, published by Minnesota, US-based Training Magazine. General Electric Co. is among the top companies that promote learning, spending a billion dollars a year.

“Learning is very central to our HR strategy. If you don’t give access to lifelong learning opportunities especially in our industry, you will definitely fall short when it comes to innovation, speed and agility," said Ries.

To improve adoption, he is looking to change the learning consumption model by enabling massive open online courses with Harvard Business School professors and bringing all learning content into a single platform that can be accessed over any device that can accessed anywhere.

For a company to be able to transform to cloud, every employee in the value chain needs to be trained to think cloud, says Rajat Kohli, engagement manager, digital practice, Zinnov Management Consulting. “From R&D to sales to support function, all employees across all levels need to be skilled in this. Skilling is one of the most important aspects of driving the business towards cloud," said Kohli.

It is not just the organizations, but employees too need to meet the company half way, points out Sandeep Chaudhary, chief executive of Aon Hewitt Consulting. “In the digital world you need huge amount of reskilling, if employees don’t reskill there will be mass redundancies,"he says.

Ries also feels that deployability has become a bigger challenge now than ever before.

“Deployability is a big concern in countries like India where there are millions of graduates," says Ries. He finds that mostly early talent come with one domestic core expertise like coding, but they need to develop expertise within a special function or in an industry to stay relevant. In fact, both individuals and companies now have to invest 50% more time and money to improve deployability, he says.

Besides investing in learning, SAP is also looking at making HR more data driven.

“I’m jealous of the people in the finance function," declared Ries. He says HR as a department works on very qualitative functions and he wants to change that. For this, it is digging deep into its own kitty of products. Its high-performance analytic appliance, popularly known as HANA, helps power real-time insights across business. And the German company has been using it to power HR over the last two years.

From looking at finding out what kind of people are likely to leave the organization to finding which universities are likely to churn out the best talent, Ries sees endless possibilities in the kind of predictive analysis HANA can churn.

Especially, when combined with social media like LinkedIn, Facebook and Twitter, he says data can help find the right pool of talent and help customize roles and responsibilities for that specific pool.

The company already does 50% of its lateral hiring through social media, depending on the roles and geographies. Ries added that SAP expects to increase its hiring using social media to 80%, in two to three years.

SAP is not an early adopter when it comes to this. Companies like Google, since 2007, have been at the forefront of using data for HR and routinely experimented with algorithms to solve HR questions like what is the optimum number of interviews to finding talent from rejected applications.

“With this HR can now be a hard data science. In fact companies that are going digital don’t really a choice on whether to adopt or not adopt predictive analysis," says Chaudhary.

As a consequence of this push towards data, Ries warns that HR professional who don’t skill themselves in these areas will not be relevant.

“In the next 5 to 10 years, HR should be able to work with facts and figures and draw necessary conclusions out of that. If you’re not close to being a data scientist, you may not be deployable in the future anymore."

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