Effective Human Resources (HR) and Human Capital management lies at the heart of business management as countries across Africa grapple with the transition from cash-based economies to more modern environments and look to update systems and processes accordingly.

Amid this changing environment issues like an ICT skills shortage, strict labour laws and high connectivity costs represent significant challenges to the development of HR.

Despite the size and diversity of the continent, experts in HR claim that these are issues that affect a number of countries. "Clients in the SADC region, as well as East Africa and West Africa are wrestling with similar challenges," says Gerhard Hartman, Head of Department, Sage HR Africa.

However, it is the recruitment and retention of top talent that frustrates many companies today.

"They are under pressure to do more and do it more efficiently, to meet the growing demands of lawmakers and regulators, and to attract, retain and enhance the performance of talent in the workplace, " Hartman continues.

This pressure has forced businesses to review their approach and strategy to HR.

Shifting into new gear

The fact is that HR practices have changed and the HR environment is radically different to what it was years ago. This is evident in how companies perceive the HR component and how readily they are willing to embrace technology trends.

Hartman says many companies are now investing HR solutions precisely because they want to focus more heavily on managing their talent as a strategic resource. He believes that forward-thinking HR departments across Africa view employees as leaders and shareholders, with the focus now on creating a sound employee value proposition to increase levels of loyalty.

Technology forces like the Cloud have not scuttled the progress in technology adoption and application it would seem and Hartman says African businesses are, if anything, even more enthusiastic about the Cloud than counterparts in South Africa.

"For smaller business with limited access to capital, they recognise it as a way to get up-and-running on the business solutions they need at a rapid pace and with minimal upfront spending," says Hartman. "Larger businesses and multinationals like the Cloud because it makes it easier to provision solutions to remote offices where they might not have ICT skills."

However affordable high-quality connectivity to facilitate the Cloud and electricity constraints remain challenges.

The value of engagement

Another trend that is impacting on HR is the issue of an engaged employee, or one who is entirely focused on their job, who believes they are very much part of the business and have a vested interest in the companies they represent.

The need to develop workplace environments that are conducive to foster this level of job engagement is certainly on the agenda across the continent says Hartman. He quotes a study published in 2013 by Emergence Growth in partnership with Aon Hewitt which found that 72% of employees in sub-Saharan Africa are considered engaged.

"An engaged workforce with the right skills and competencies delivers a vast return on investment for any business," Hartman adds.