The CHRO's Guide to HR Technology


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Monday, February 8, 2021

HR departments are under more pressure than ever, with professionals having to juggle a wide range of responsibilities to meet the demands of the business. But as new technology emerges, HR leaders must consider investing in HR tools to help their teams manage this increasing workload.

Article 15 Minutes
The CHRO's Guide to HR Technology

There was a time when HR’s function was largely to organize paychecks and hire new employees. But in today’s working world, jobs are more than just a way to make a living. Today’s professionals are more particular about what they do and the company they work for. This has led to an increase in the responsibilities of HR, who must now juggle a wider range of roles from recruitment to maintaining a positive culture and encouraging feedback.

This has placed increasing pressure on HR teams across various functions, with many organizations now choosing to invest in HR technology tools to manage this increasing workload more efficiently.

But if you’re yet to harness the power of these HR tools, we’re here to tell you why now’s the time to do so. In this HR tech guide, we'll cover the following chapters:

  1. What is HR tech?
  2. Why HR technology is vital
  3. The HR tech landscape
  4. Benefits of using HR software
  5. How technology is shaping the HR landscape
  6. Impact of automation and AI on HR
  7. 10 tech tools every HR professional needs
  8. Why invest in an integrated HR system

What is HR tech?

HR technology (HR tech) is an umbrella term for all software and its associated hardware that are used to automate various HR functions. For example:

  • Recruiting technology
  • Employee payroll and compensation
  • Performance management
  • Workforce analytics
  • Cloud-based HR technology

These HR tools can take on some of the more labor-intensive roles by automating routine processes. They also help to increase efficiency and deliver a better employee experience by offering detailed analytics and insights.

Why HR technology is vital

For some organizations, HR tools can be a significant investment. Therefore, it’s crucial to understand why HR tech is vital and how it can add value.

1. Employees are an organization’s most important asset

Employees are the lifeblood of any organization. They’re the key to success, but how well they perform is largely based on how well they’re managed. As such, HR technology tools are vital for providing a seamless employee experience, from the moment they join to the moment they leave.

2. Managing HR operations manually is no longer feasible

Nowadays, HR and technology go hand in hand. Gone are the days where desks were covered in paperwork and surrounded by rows of filing cabinets. As the number of employees has increased, so has the need for automated systems to take some of the burden of manual administrative tasks. Growing companies simply can’t function without them.

3. HR technology could be crucial for beating the competition

You can pretty much guarantee that your competitors are using HR tech in one way or another, so if you don't embrace it, you could get left behind. An example of this is AI and HR technology, which can help teams predict what staff they’ll need in the future. It can also help them offer a better employee experience by providing more flexibility and choice to the workforce.

For example, cloud-based HR technology makes it easier for HR teams to continue communicating and sharing information with employees through mobile devices. This is something that talented professionals are going to be looking for. But if you want to hire the top talent and beat your competitors, you need to give them a reason to choose you.

It’s important to choose the right tech

HR technology isn’t going to work in your favor unless you choose the right software and systems. As such, you must take your time to work out what HR functions are most time-consuming and which areas of the organization need to run more efficiently. That way, you can ensure you choose and invest in the right HR tech stack for your teams.

The HR tech landscape

More organizations are investing in HR tech and as an industry, it’s growing exponentially. As of 2019, the HR tech market was valued at over $16 billion and this is expected to increase by at least 11.7% by 2027. And with 74% of HR and IT leaders saying they expect to see their spend on HR tech increasing over the next two years, these figures are hardly surprising.

HR technology market size, by software is growing year-on-year

Why HR tech is on the rise

There are several reasons why HR tech is on the rise. Firstly, IT advancements mean that new HR technology and software are always emerging and always finding new ways to help HR teams.

Secondly, HR tech can help organizations to solve some of their biggest management and administrative challenges, like attracting and hiring the top candidates, human capital management and aligning organizational strategies. This is why so many are choosing to invest in these tools right now.

Benefits of using HR software

Whether you’re looking to reduce costs or improve the day to day running of your department, the right HR tools can help you achieve this. Here are a few key benefits of HR technology and how these can positively impact your business.

HR software can automate and free up time

Automation in HR can be used to take on time-consuming and repetitive tasks, such as importing documents, filling in spreadsheets, maintaining files and organizing information. This frees up time that can be better spent on tasks that’ll help support employees and drive the business forward. This in turn can help to boost their productivity.

It can enhance employee experience

Investing in HR tech can also help to empower employees, which can be hugely beneficial for businesses. For example, cloud-based systems can be accessed anywhere, which encourages workers to have a more self-led approach and gives them better ownership of their personal data. Alternatively, chatbots and automated systems can quickly deal with queries or vacation requests without long, messy email chains. All of these aspects together can have a positive impact on employee wellbeing, happiness and retention. They also free up time for HR professionals.

Improved security and regulatory compliance

Another benefit of HR software is that it can maximize accuracy and improve security in HR functions. Some HR solutions can give you full document management so you can see who reads what and if any changes or different versions have been made. What’s more, cloud-based HR software comes with additional security features that can protect your data from physical catastrophes such as fires or theft.

Finally, HR technology tools can play a huge role in compliance, alerting HR professionals when action needs to be taken, such as reporting on the gender pay gap or staying GDPR compliant.

How technology is shaping the HR landscape

With new HR software and technology solutions being created all the time, we’ve seen a tech boom over the last few years that’s reshaped the way HR professionals work and the way we think about HR and its role within an organization.

Diversity and inclusion

Diversity and inclusion (D&I) in the workplace was once the job of HR and often wasn't one that took priority. But there’s been a huge shift in the last decade as evidence has shown that diversity can improve a company’s innovation and profitability. This has led many to prioritize D&I.

However, it’s one thing to say you're implementing D&I initiatives, but it’s another to actually take action, something that HR professionals are now having to come to terms with.

That said, thanks to new diversity and inclusion technologies, HR teams are taking back ownership of D&I initiatives, using these tools to support them in their goals. Better analytics and new HR technologies are boosting diversity and inclusion and helping these initiatives come to fruition through:

  • Screening and sourcing tools which open them up to wider and more diverse talent pools
  • Rewards and recognition schemes that promote visibility across the workforce
  • Feedback and Voice of the Employee (VoE) platforms letting staff have their say and tell the real story

Performance management

Performance management is one of the biggest and most complex jobs for HR teams. Luckily, HR technology has streamlined these processes: performance monitoring, conducting reviews and asking for feedback and helped to eliminate a lot of unnecessary steps.

These tools have made it possible for HR professionals to gather people analytics and use this raw data to create more targeted, actionable insights, which ultimately will be better for the business and the workforce. These data-driven decisions could include promotions, bonuses, succession planning and more.

Smarter recruitment through AI

One of the biggest ways in which tech is shaping the HR landscape is how it’s transforming recruitment. The hiring process can be one of the most time-consuming and costly HR functions, but thanks to AI and automation, it’s becoming easier for teams to source and hire talented candidates. In fact, AI is starting to outperform humans when it comes to evaluating hard skills.

These tools aren’t only changing the way that HR teams recruit but also how they onboard new employees. They also free up extra time for hiring professionals to do more important tasks like building relationships with top candidates and new hires.

Impact of automation and AI on HR

The automation of HR processes is important because it can increase efficiency and reduce the risk of human mistakes. It also eliminates the need to waste time on mundane tasks, which is why AI and automation are set to be the future of the workplace.

In the short term these tools will improve accuracy, save money and improve user experience. In time, this will lead to better predictions and analytics for businesses, and in the long term will allow for better decision making and a boost in human activity.

What do AI and automation mean for the workforce?

The relationship between HR, automation and AI is a delicate one. As new technologies are emerging, people are understandably concerned that their jobs could become obsolete. But while HR may change, these roles won’t be destroyed; instead, they’ll evolve and change.

And what does automation and AI mean for the rest of the workforce? A study from Deloitte suggests that no matter what new technologies come into existence and whatever businesses choose to invest in, it’s how AI and automation are implemented that counts. This will ultimately influence how professionals feel about their employer. By automating the right processes and elements of human capital management, HR teams should find themselves with more time to invest in the tasks that demand a more human touch.

The best way to get this right is to find out what’s important to employees and devise an AI and automation HR strategy based on their feedback. Otherwise, the workforce could feel displaced or like they’re only ever dealing with robots.

What exactly are we talking about here?

Below is by no means an exhaustive of some of the key functions that are likely to be taken over by AI and automation:

  • Resume screening
  • Generating candidate shortlists
  • Pre-hire assessments
  • Employee engagement surveys
  • Workforce scheduling
  • Database management

Welcoming the augmented workforce

Even when these processes become automated, it doesn’t necessarily mean job losses. It simply means that employees and bots will be working together on tasks. This is what’s become known as an augmented workforce. The key benefits of this are that it reduces the risk of error, frees up time and allows the workforce to focus on being more creative, which can increase productivity as a result.

Despite many being concerned, a study from Conversica highlights that 96% of executives believe that they could implement AI to increase team productivity without having to reduce headcount in their workforce. It was also estimated that AI would create around 2.3 million jobs in 2020, while only eliminating 1.8 million, so it’d actually create more work than it cost.

While it’s understandable that people are concerned about losing their jobs to bots, automation can elevate the workforce. Robots are there to strengthen the human workforce, not replace it. They do this by creating more interesting roles, reducing negativity towards mundane tasks and making the business run smoother as a whole. This can create a much more relaxed and stress-free workplace for everyone.

10 tech tools every HR professional needs

HR tech vendors disrupting the market

Are you looking to add to your HR tech stack? We’ve pulled together a list of tech tools every HR professional needs to work more effectively and improve the employee experience:

1. Application tracking software (ATS)

Some tools make recruitment a lot easier for HR professionals and applicant tracking systems (ATS) are one of them. This software manages candidate sourcing, evaluation and hiring. It allows HR teams to scan through mountains of resumes and quickly find candidates with the best qualifications and skills for the role, taking out a lot of the hard work.

2. Video interview software

Before the 2020 Coronavirus pandemic, in-person interviews were the norm. Many organizations now conduct virtual interviews to continue finding and hiring top talent. Video interview software has many benefits. It can cut both the time and cost per hire and remove the boundaries of location, meaning that HR teams can interview remote candidates, opening them up to a bigger talent pool.

3. Employee assessment software

Employee assessment software can be used to help HR teams decide whether a candidate is well-suited for an open position. This can save them time during the hiring process which can dedicate to other important tasks.

4. Time and attendance

Attendance management software has increased in popularity in recent years as it allows individuals to proactively manage their own working time. This means they can request leave, overtime or additional hours through the automated system. This is great for employees but also frees up more time for HR professionals.

5. Payroll, compensation and benefits

Financial software like payroll used to be very time-consuming but thanks to new automated technologies, it’s no longer necessary to write time cards, print checks or go through monthly payments manually.

6. Performance management

Performance management software can take on a number of important functions. It can help HR teams to assess employee’s performance, give 360-degree feedback and track their attendance. This can be very useful when it comes to giving appraisals and promotions.

7. Learning management system

A learning management system (LMS) is software designed to create, share and manage educational content among employees. This can help improve learning among the workforce and it can be more cost-effective and trackable than other methods.

8. Employee engagement

Employee engagement software is used to increase employee job satisfaction and help retain talented workers. They do this by strengthening the company culture and helping workers get on board with the overall missions and values of the business, therefore making them more passionate and productive.

9. HR and people analytics

People analytics enable managers to make better-informed decisions about their workforce by taking the guesswork out of HR and people management. This software provides analytics and insights that can be used to make more effective and beneficial decisions.

10. HRIS

A human resource information system (HRIS) is a form of HR software that integrates HR activities and enables the automation of tasks such as data entry, data tracking and payroll. This has many benefits such as time-saving, analytics, mitigating the risk of mistakes and employee empowerment.

But this isn’t to be confused with human capital management (HCM), as these terms are often used interchangeably and have very crucial differences. While both are systematic approaches to managing employees and maximizing human potential, the difference is that HRIS falls under the umbrella of HCM, as these HCM suites usually include all the HRIS processes and do even more.

Why invest in an integrated HR system

It’s estimated that HR professionals could be spending over 366 hours a year manually checking, responding and staying on top of multiple HR functions. One of the major causes of this is a lack of unification. Many organizations are using different platforms for their functions, including employee communication, recruitment and performance management.

Unification is one of the key benefits of investing in HRIS and there are several other positive effects to be had from these systems:

  • Using one vendor means you reduce the time spent communicating with multiple vendors and service providers
  • They provide a common interface making it easier for users to learn and implement new systems
  • It makes integrating data from multiple HR functions much easier
  • It can be more cost-effective than using multiple providers
  • Reduces the need to manage multiple technological architectures as everything is in one place

In summary

The benefits that can be gained from HR technology are huge and can transform your department and the business as a whole. But this can only be achieved if you choose the right HR tools.

Therefore, you need to make sure that you’ve done thorough research into which HR technologies and software are right for your team and employees. Before making any decisions, there are several critical questions that managers and HR professionals must also ask themselves.

Take your time and get this right so you can invest in and introduce an incredible tech stack that helps to increase efficiency, keep employees happy and drive the business forward.


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