This article first appeared in Digital Edge, The Edge Malaysia Weekly on June 21, 2021 - June 27, 2021

When WorkSmartly Digital Sdn Bhd started out in 2009, it was a traditional payroll outsourcing company. Three years later, the company faced many unexpected difficulties trying to scale up. Its CEO and founder Victor Phang shares that customers would complain about tedious human resource (HR) processes, demanding faster and better solutions.

This was in 2012, and HR solutions then were not as comprehensive as they are today, as most were desktop-based solutions with on-premise data servers. Phang says these existing solutions made it difficult for WorkSmartly to integrate data and work with their clients.

With his tech and HR expertise, Phang decided to take things into his own hands by setting up a team to build WorkSmartly’s proprietary HR solution.

“We already had three years’ experience with HR processes and operations, but we lacked a technology expert. So, I found a fresh graduate who was a master’s degree holder to become our chief technology officer (CTO) and help us build the first generation of our HR system,” says Phang.

It took the company about a year to research and make decisions on the kind of technology platform it wanted to build as well as identify its target clients. Phang says many people at the time did not trust cloud-based solutions because of privacy and security concerns. So, the company had to decide whether to develop a desktop and server-based solution or venture directly into cloud solutions.

Cloud technology experts were scarce, too, which was why Phang decided to hire a fresh graduate as the company’s CTO, as he would have fresh ideas.

“We didn’t want an experienced CTO who was stuck on legacy systems. The feedback we got was not to trust experts who were pushing away cloud solutions and many were convinced the software-as-a-service (SaaS) pricing model would not be accepted. We wanted to really look beyond this noise.

“Cloud was a sexy word at the time, just like how big data and artificial intelligence (AI) are making waves today. So, we looked at what was being done in the West, signed our CTO up for seminars to learn about cloud technologies and built our system.”

The SaaS pricing model was the next issue that cropped up, as companies preferred one-off purchases for software and hardware. After pricing, clients were concerned about security. Phang said, over the years, WorkSmartly worked to address the negative impressions associated with cloud solutions and alleviate customer concerns.

Even today, he says, there are still concerns and hesitations around cloud services, even though many solutions out there are now cloud-native. Small and medium enterprises (SMEs) are more open to cloud-based solutions, he adds, but the pandemic last year forced larger companies to look into this area as well because their business risk assessment requirements had also shifted.

“We get a lot of questions from CTOs and chief information officers (CIOs) about what kind of cloud hosting we use and whether our solutions can be hosted on-premise. We still need to fulfil certain requirements, where they will give us a checklist of things they want to know,” says Phang.

WorkSmartly has grown to become a HR solutions provider, addressing fundamental HR requirements such as payroll, leave application or staff attendance as well as providing employee engagement and support while working remotely. In addition to Malaysia, the company has established a presence in the Philippines, Indonesia, Vietnam and Singapore.

Phang says the sophistication of its solutions has grown with its client base because, as companies grew, they required more personalised and specific solutions. He attributes the company’s success to its ability to scale, adapt and respond quickly to technological change as well as customer demands.

Adaptability is a crucial element in WorkSmartly’s offerings, especially last year when tax and Employees Provident Fund (EPF) contributions had to be adjusted frequently because of the different incentive programmes that the government introduced because of the pandemic.

“The ability of the system to adapt to changes is very important. Some legislation is made overnight, such as tax extensions and a reduction in EPF contribution, and the system needs to be able to incorporate these changes quickly.

“These changes may be fairly straightforward if a company has only 10 to 20 employees, but it would be much more challenging in companies with, say, 500 to 1,000,” he says.

Phang notes that companies tend to focus digitisation efforts on revenue-generating departments such as sales and finance, whereas HR is one of the last departments to be digitised. And it is always a challenge to explain to CEOs why they need to start with HR and taking care of their employees first.

“The pandemic has helped companies realise that HR needs are equally as important to digitise, as they cannot interact with their employees daily now. Some companies have adopted an automated HR process solution, but not many.”

WorkSmartly’s solutions uses mainly robotic process automation technology to automate simple HR processes such as leave applications and claims. Phang says these processes may replace manual administrative work entirely in the future, especially if a process has clear criteria to be met.

He points out, however, that companies have recently shown interest in big data analytics to understand their employee’s needs and behaviours, in order to gain a holistic view of their human capital.

“Data — such as the time most employees log into the HR system, when employees take sick leave and what kinds of support they look for — can be powerful for an organisation, especially when working remotely,” he says.

“HR systems have evolved from just being about administrative work to encompassing analytics for better employer-employee engagement.”

Mobile HR solutions are also picking up, says Phang, because not only can they allow HR personnel to carry out administrative work on the go if needed, but it can also provide both the employer and employee with a personalised engagement experience.

“For example, a manager or head of department can schedule ‘Good morning’ messages to their team to check in and boost their morale while working from home. This interaction is then recorded and used to understand the employee’s needs. Now, HR is all about engagement.”

While HR solutions have made it easier for companies to navigate a work-from-home arrangement, Phang says a survey conducted among WorkSmartly’s clients found that about 50% of companies would like to return to working at the office or have a hybrid work arrangement. This is due to a variety of factors but, most importantly, because many companies fail to respect an employee’s space after they have clocked out for the day.

“Quite a number of companies are doing this and it’s not healthy. This also results in bad engagement between the employee and the company.”

The government’s MyDigital initiative is very much welcomed, says Phang, especially the government’s commitment to inviting global data centre players to Malaysia. This is because many companies, especially government-linked ones, would prefer that their cloud data be stored locally. Currently, WorkSmartly’s data is stored in Singapore.

The entry of global data centre players will also be able to adequately support the local technology ecosystem, which is very much needed, says Phang. Local players will also have the opportunity to learn and share expertise with these bigger players.

“I really hope our country will have a more unique position in the region with the entry of these players. I think it’s very important, especially when it comes to getting foreign direct investment into the country,” he says.

Phang notes that MyDigital is ambitious and, possibly, lacks focus. He says the government should look to countries such as Singapore and try to emulate their digitalisation roadmap, which focuses equal efforts on building infrastructure and increasing awareness of tech adoption.

“What is the point of promoting agritech solutions to farmers when they don’t even have the proper infrastructure in the area to support the solution? While campaigning for the awareness of tech solutions is good, it needs to be inclusive as well as holistic.”

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