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The what, why, and how of HR technology

Amrita Kar

Last Updated: 22 March 2023

In this article:

If you are an HR leader, you’ve likely already invested in technology to enable and empower your team and the enterprise workforce. The nature of technology, however, is such that it is ever-evolving — demanding constant re-evaluation. You need to ask and answer constantly: Is it serving your intended purpose? Is it providing an optimum return on investment? Are your employees valuing the addition? 

Here’s a drill-down on everything you need to know while choosing an HR technology for your business - What is it? Why is it useful? What is the role of AI and automation, and what are the best practices for choosing the right HR technology for your organization?

What is HR technology?

HR technology includes software and products designed to streamline and automate HR processes. The primary goal? To directly impact the overall employee experience, increase engagement, and reduce administrative tasks. 

McKinsey estimates that approximately 50% of work could be automated with existing technologies. These tools or services enable the professionals to manage employee data, recruitment, benefits administration, payroll, and compliance, perform onboarding and offboarding more efficiently, gather continuous feedback data, and enhance data analytics for the enterprise. 

The urgent need to adopt HR technology

With the rapidly changing work environment, HR professionals face several challenges like manual processes, lack of data and insights, and attrition among others. 

Here are the top 10 challenges that emerged in an HR Tech Survey by PWC in 2022.

As an HR professional, you can use HR technology to overcome these challenges and improve efficiency in your organization. 

1. Reduce repeated manual tasks and improve HR efficiency

Several functions of an HR team still rely on manual processes and spreadsheet-driven techniques to manage the workforce. G&A Partners report that without automation, HR teams end up spending up to 73% of their time on administrative tasks 

With HR technology you can optimize the time and resources spent on manual processes and instead invest in strategic activities. As per Amber’s 2022 report, HRBPs saved ~11,000 hours through the use of automation and AI. This data is evidence enough that HR automation is the way forward. 

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2. Improve decision-making through data

HR professionals need access to real-time data insights to make informed decisions about workforce management. However, expecting your team to curate real-time insights after collecting and analyzing data is unrealistic. 

HR technology not only gives you data on your employees but does it in real-time. You can use this information to make better decisions, revisit your strategies, and ideate on course corrections as they happen. It's like having a crystal ball for your people strategy.

3. Improve employee experience through automation and AI

The third and most crucial reason for upgrading your HR technology stack is the massive impact it can have on your employees' experience.

With AI technologies and predictive analytics, HR leaders can not only enhance the overall employee experience but also identify those who are disengaged, predict attrition, and retain their top talent. This means your employees will feel more valued, supported, and motivated to work for you.

Types of HR technology you should know about

Every HR process is an opportunity to deploy HR technology. However, Gartner says that a majority of enterprises are concentrating efforts on HR operations (40%), talent acquisition (38%) employee engagement monitoring (38%). Other fields drawing attention to technology deployment include learning and development, skills management, workforce planning, and performance management.

1. Workforce management platforms

It provides a centralized platform for managing employee data, payroll, rewards & recognitions, benefits administration, and compliance. 

2. Applicant tracking systems

This category of technology helps streamline recruitment by automating job postings, resume screenings, and candidate communications. These systems enable HR professionals to identify the best candidates and reduce time-to-hire.

3. Employee experience platforms

The platforms improve the overall employee experience by encouraging communication, collaboration, and feedback in real time. 

4. Performance management systems

These tools enable HR professionals to set goals, track progress, and provide guidance to upskill and improve employee performance.

5. Learning and development platforms 

An L&D platform is a digital learning solution that allows you to manage all your training, education, and performance goals in one place.

5 things to consider before choosing the right HR technology

To successfully deploy HR technology, it is important to consider various factors beyond just selecting and implementing the system. You’ll need to navigate employee preferences, how the business operates, scalability, integrations, and meet stakeholders' expectations.

1. Evaluate your HR processes and needs

What are your current processes, what are the challenges you face, where do you urgently need enhancement, and how would you want the technology to enable your team? 

Answering these questions will help you prioritize your investment. This will also help you identify the specific features and capabilities you need in the HR technology solution. Once you have decided on the purpose and intended outcome, the next step is to consider scalability and integration capabilities. 

2. Shortlist a list of vendors and compare 

The next step would be to start shortlisting vendors that meet your specific requirements. This process should involve a thorough comparative analysis through review sites and case studies that demonstrate ROI. You should also use this time to consult with your team (also the end users of the product) to share their findings and point of view. 

Once you have outlined the details of each shortlisted platform and have your questions ready start scheduling demo calls to get more details and understand the ROI and cost implications of the platform.  

3. Look for scalability and integration options 

As your organization grows, your HR technology needs will likely change, and the technology you use will either need to be upgraded or changed. Keeping this in mind, selecting a solution that can support your enterprise and team requirements in the long run while enabling you to meet short-term goals and remain within budget is essential.

It is also critical that any new service you invest in seamlessly integrates with tools you already have within your enterprise. For example, investing in an AI-powered onboarding solution would be wise to check if it integrates with collaboration and communication tools, such as Slack, or organization solutions, such as Notion or Trello. 

4. Secure buy-in from your IT and cybersecurity teams

Your IT team will be more aware of the limitations within your enterprise architecture and guide you with specifications before you start your hunt for the most suited solution. They can also help you evaluate a software’s capabilities and inform you of potential roadblocks and security issues. This ensures that the solution meets the needs of both HR and IT departments and can be effectively implemented and maintained.

5. Position HR technology as a business driver

HR technology is central to developing a digital workplace and requires cross-team collaboration and agreement. Gaining confidence from your top management and CXOs is imperative for any technology deployment to be successful. 

Painting the bigger picture 

HR technology is critical for an enterprise that wants to successfully and effectively manage its workforce. By automating and streamlining administrative tasks, HR professionals can focus on more strategic initiatives, such as employee engagement and retention — ultimately protecting enterprise growth, revenue, and employee turnover. By selecting the right HR technology solution and following best practices, your team can enable your organization to unlock the full potential of its workforce and build a thriving and engaged workplace culture.

"We have implemented some amazing platforms like the Amber chatbot and all these investments have actually come from my CFO." - Dr. Vishwanath Joshi, Chief People Officer, Hexaware

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