3 HR tech trends that will deliver the best ROI in 2023

3 HR tech trends that will deliver the best ROI in 2023


From hiring the best people to providing employees with opportunities to produce their best work, technology has revolutionized the human resources industry. 

Companies that have stayed on top of HR technology trends have realized substantial returns on their investments.

As Joe Monaghan, a principal at Mercer, said to Human Resource Executive, “As we move post COVID-19, it is likely that HR will continue to improve HR technologies to further enable online learning and career development, feedback and engagement, hiring and onboarding and many other key functions.”

So as we move into 2023, these are the three biggest HR tech trends you need to keep an eye on.

Table of contents

1. The rise of remote work technology

“As more and more companies adopt remote work options and increased flexibility for employees, HR technology must adapt to the changing workforce by becoming more accessible and convenient for these dispersed teams. On-demand, online platforms will become increasingly relevant and legacy software must adapt to these new use cases.” said Tom Griffiths, CEO and Co-founder of Hone

Remote work offers a number of benefits to employers and employees.

Employees prefer working remotely

With the advent of COVID, most people have already developed a habit of working from home and they’re enjoying the flexibility offered by remote work.

According to Buffer’s 2022 State Of Remote Work report, 97 percent of their remote worker respondents would like to continue to work remotely. This figure is also supported by Gallup’s State of the Workforce study, where 91% of workers in the U.S. who work at least some of their work hours remotely expect the same arrangement even after the pandemic. 

Google, Reuters, Microsoft, Zillow, Uber and several other companies have already announced plans to continue to offer remote work opportunities at least through 2020.

According to Mark Dixon, Chief Executive at IWG, “If you offer workers the chance to work where they need to be, and not where they are told to go, it completely transforms their view of the company, they are more productive.” 

Remote working is both cost-effective and easier to manage

Recent survey data shows that more than a third of workers are ready to reduce wages by up to 5% in exchange for the opportunity to work remotely, and a quarter is ready to cut wages by 10%. 20% of workers are ready for even greater reduction in return for schedule flexibility.

And with a plethora of cloud-based HR systems, ATS systems, video conferencing softwares, and other management tools available, it’s now easier than ever to manage large remote teams. 

But it’s not all rainbows and sunshine

However, remote working does not come without its challenges. 

With Facebook and Quora hunting for a ‘Head of Remote Work’, companies are quickly realizing that they need help to make the transition to remote work and manage remote teams. 

Team collaboration is also taking a hit with remote working. As in a recent survey, 35% respondents said their team’s ability to collaborate has taken a turn for the worse. 

Talent risk has also become a huge concern for companies in these times of remote working. As Godelieve van Dooren, partner at Mercer says, “With the uncertainty surrounding the COVID-19 crisis, some organizations may be taking stringent measures to manage their current costs, however they cannot be short-sighted in their approach. They must consider the resources needed to ensure the organization can rebound to growth post-crisis.”

Key takeaway

So while remote working has its benefits, measures will need to be taken by companies and their HR teams to ensure better team engagement, team collaboration and potentially seek help to make for an easier transition.

Companies will have to develop the right mix of cloud computing solutions, business apps, mobile tools, unified communications, project management tools, and video conferencing software to face these challenges.

2. Technology solutions to improve company culture

Over the last decade, there’s been a growing understanding of the importance of company culture.

In fact, a Berwick Partners study found that 85% of UK workers value company culture over financial incentives. Having a culture that attracts high-talent can lead to 33% higher revenue and companies are now scrambling to improve their company culture.

The challenges presented by the pandemic have further highlighted how essential company culture is to organizational success.

Here are some important considerations to keep in mind.

Leveraging data to improve company culture

As technology gives companies access to more and more data, it has become easier to quantify employee culture metrics such as employee retention, employee lifetime value, and employee engagement. It is now more important than ever to leverage this data to create a thriving company culture.

According to one of Forrester’s recent reports, data-driven businesses are growing at an average of more than 30% annually. And with a plethora of real-time data software solutions available, companies can now easily get information faster than ever before, which can help solve problems as soon as they arise. 

Employee retention is now more important than ever

Employees are 26% more likely to leave a job if they feel there is a lack of respect between colleagues. And companies are quickly catching on to this fact. 

Josh Bersin of Deloitte says the cost of losing an employee can range from tens of thousands of dollars to almost two times the employee’s annual salary. So there’s an urgent need to invest in tools that boost employee retention. 

Empowering employees to increase productivity is critical

Widening the gap between employers and employees can lead to a lot of problems. A great company culture translates into empowered employees who produce better work. 

As PJ Hough, Chief Product Officer of Citrix says, “When employees feel empowered by the tools they use rather than encumbered by them, they can focus, innovate and deliver value.”

However, there are dangers to hiring for culture fit

While recruiters and HR specialists prefer hiring employees that fit well in their culture, hiring for culture fit alone can cause problems. 

Recruiters need to pay special attention to the skill set, qualities, and problem-solving abilities of a candidate, instead of just their personality. 

Focusing too much on culture fit employees can lead to a lack of diversity in a company. Aside from the ethical problems with that, a McKinsey report showed that in the US, for every 10 percent increase in diversity amongst leadership, earnings rose 0.8 percent.

Another study showed that diversity and inclusivity improves employee engagement, which in turn increases retention by 19 percent and collaboration by 57 percent.

Adding people with exactly the same values, ideas and approaches as your team can be dangerous. It’s easy to create a “me-too” environment where everyone thinks and acts in the same way, not typically an environment where ideas and innovation flourish.

Why You Should Hire for “Culture Add” Not Culture Fit

So a company’s workforce needs to be diverse to thrive, and recruiters and HR specialists need to strike the right balance between culture fit and diversity when hiring. The way to do this has been described as focusing on looking for a “culture add” instead of a culture fit.

This means that, instead of focusing on candidates that fit into your current culture, you look for candidates who will add to your culture.

Recommended reading: Culture add vs. Culture fit: Why culture add is the new way forward

Key takeaway

Hiring for culture add can be tough. But with the rise of remote work, it’s more important than ever to focus on improving your company culture however you can. To help you do it, TestGorilla offers a Culture Add Test so that you can find people who will thrive in and add to your current company culture.

3. Increased focus on technology to reduce hiring discrimination

Recent events in the United States have led to a social outcry again discrimination, and Americans have begun calling companies out for hiring discrimination and lack of diversity more than ever before.

“If D&I wasn’t already a top priority for HR, it is now—and it must be, in order to stay competitive. Management and HR are going to be held more accountable by increasingly vocal internal activists who demand real progress, and employers will need to transform processes like recruiting, internal mobility, compensation, and learning and development to root out bias and to create more equitable outcomes by design.” 

Ben Brooks, founder of HR tech startup Pilot in an interview on on Human Resource Executive

Companies working to reduce discrimination

With Wells Fargo paying up to $8 million and Walmart paying a whopping $20 million to settle hiring discrimination charges, companies are quickly working to reduce discrimination. 

Several big companies like Target and Best Buy have pledged to increase the percentage of racially diverse and female employees in coming years. And companies are also investing in diversity training to avoid lawsuits.

US companies spend approximately $8 billion every year on diversity training and one in four hiring decision makers are optimistic that they will make progress towards achieving their diversity and inclusion goals in the next year according to a survey from Glassdoor.

Rise in HR tech tools to combat hiring bias

Artificial intelligence tools like Entelo and Textio are gaining popularity as tools at the forefront of the fight against hiring discrimination. However, employers need to be wary of untested AI, as these tools are often dependent on what you feed them as Amazon learned in it’s 2015 AI tool’s sexist hiring debacle. 

As Entelo’s chief marketing officer, Mike Trigg said, “If the machine is learning from a biased recruiter, that has the potential to reinforce bias rather than remove bias from the hiring process. You run the risk that it is going to mimic the biases that individual recruiters may have.” 

While these tools can help a great deal in combatting hiring discrimination, the end result depends on how recruiters analyze this data and what they do with the insights offered by these tools. 

Key takeaway

It may be impossible to fully eliminate unconscious bias, but many tools exist to help reduce the impact of hiring discrimination. Companies like Entelo, Textio, and others are offering companies new ways to increase diversity and reduce hiring bias.

A lot has changed in the HR technology landscape in 2022 and more change is coming in 2023. It’s important to be aware of what’s coming next so that you’re ready to lead your organization in the coming year.

With TestGorilla, you’ll find the recruitment process to be simpler, faster, and much more effective. Get started for free today and start making better hiring decisions, faster and bias-free.

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