Two of the most vital components in any business are people and technology. As an HR professional, dealing with both is a crucial part of your role. Dealing with people is the foundation of what you do. Yet, it is likely technology has become a more significant part of your day-to-day job in recent years. If you're not already using HR technology in your role, you will likely do so in the coming years.
Technology can help you address many of the challenges you face in HR, including measuring employee engagement and job satisfaction, performance management, and recruitment.
COVID-19 means we will see an increase in long-term remote working. Using technology and all the tools at our disposal to meet these challenges will be paramount.
Deloitte’s 2020 Global Human Capital Trends Report highlights the challenges facing HR in the coming years, how the profession is likely to develop, and the role technology will play in this.
What is HR technology, and why is it so important?
IBM was one of the first global brands to highlight the role technology would play in HR transformation. Today, there is no widely accepted and adopted definition of HR technology. However, in this article, we'll approach HR technology as a collection of AI, apps, and other smart tools to augment, optimize, and automate HR processes.
Despite McKinsey highlighting that technology can perform around 50% of all HR functions, not all companies are fully leveraging available technology.
The reasons for this vary between businesses and even between members of HR teams in the same organization. However, some of the common causes are likely to be:
- A lack of budget for HR technology tools.
- A lack of training and knowledge surrounding how best to use and deploy specific tools.
- A lack of understanding of how technology can be critical to a function driven by people.
One critical thing to understand about HR technology is that it won’t replace you. Instead, HR technology will improve how you work, automating processes and data gathering activities, giving you more time to focus on people.
What outcomes will a high-performing HR tech stack deliver?
When you choose high-performing HR tech tools, you’ll open up the potential to achieve several benefits.
- The ability to optimize employee performance and improve job satisfaction.
- Improved workplace culture and productivity.
- Optimized recruitment processes.
- Sustainable talent sourcing pipeline for succession planning.
- Better talent retention rates.
- Enhanced performance management systems and metrics.
- Access to analytics, data, and reporting around your HR performance.
- A more diverse workplace.
- Happier teams.
Use these points as a checklist when building your HR technology stack, depending on where you see these tools playing a role in your business.
If you don't already use HR tech, businesses that do are moving ahead of you in achieving the above benefits. Can your business afford to wait any longer?
What types of HR tech are available?
Several types of HR tech are available, which can help you address specific needs and processes.
Candidate sourcing, acquisition, and recruitment management
Recruitment is a core function of most HR roles, often the one that takes up the most significant amount of time. Recruitment software can range from sourcing tools to applicant tracking systems that include features like skills and personality tests and AI-powered resume assessments.
Using tech in your recruitment gives you back time to build relationships with candidates and ensure you're better able to find the best talent for your vacancies.
Automation of HR processes
Recruitment isn’t the only HR process that tech can automate.
Various tools use automation to help you to:
- Manage the talent onboarding process for new hires.
- Process employee timesheets and payroll.
- Calculate annual leave entitlement, process leave requests, and manage your leave calendar.
- Undertake performance management processes, from annual appraisals and reviews to disciplinary and other negative performance challenges.
- Conduct exit interviews when employees leave your business.
Although specific HR analytics tools are available in the marketplace, the best HR tech tools will include a rich suite of analytics features. These should help you visualize your data and identify where you can make improvements in your processes.
When taking advantage of HR analytics, you’ll find a wealth of opportunities to get improve your process, including:
- Identifying bottlenecks in recruitment and how you can better attract talent.
- Better time management through knowing how long tasks take, which can be particularly crucial in industries like IT, where there are many stakeholders and demanding deadlines.
- Understanding triggers for falls in employee satisfaction and what leads to team members looking for another role.
HR and broader business performance optimization
Several HR tools, including Culture Amp and StaffCircle, focus on performance optimization as their main selling point. However, the best HR technology will allow you to optimize performance across your department, team members, and your whole company. Using HR technology in this context strips away any bias, unconscious or otherwise, allowing you and your business' leadership to make data-driven decisions.
Development of broader business strategy and growth
PwC’s Talent Trends 2019 report found 79% of CEOs felt their employees lacked the essential skills that would facilitate business growth. With such vast skills shortfalls knowingly allowed to develop within businesses, ensuring your CEO isn't in that 79% will put your company at an enormous advantage in your industry.
Use HR tech to help you develop and deliver a training plan to your teams. Investing in employee skills development won’t just aid your business growth strategy; it will help your internal succession planning, too.
Online skills assessments
Online skills assessment platforms like TestGorilla offer an effective way to assess and shortlist candidates more efficiently. TestGorilla offers multi-measure tests which research shows are more predictive of job performance. These assessments can be implemented at the top of the hiring funnel to ensure that your spending your time on qualified candidates.
Additionally, the ability to remove identifying information for test-takers will help reduce the impact of conscious and unconscious bias in the hiring process.
What to consider when choosing HR tech tools
While HR tools can deliver enormous benefits, you must dedicate time to choosing the right tool, or stack of tools, for your HR department and overall business.
Here are five considerations you must make when building your HR tech stack.
Does your business need a specific HR tool?
HR tech isn't just for large and enterprise-level businesses. At the same time, you shouldn't invest in a tool just for the sake of it. Although HR tech can deliver an array of benefits to your business, if you're a small organization and you're not ready to adopt HR tech in your journey, that's okay!
If you decide to go ahead and search for HR tech tools, pay attention to whether tools are labeled as suitable for "enterprise-level" or "small businesses." This approach will help you identify the tools likely to be most relevant to your needs as a company. However, the best HR tool developers understand that a small business doesn’t want to be a small business forever. Therefore, the best approach is to find a tool that offers several tiers of pricing and features, enabling you to start small and allowing your tool to grow alongside you.
You should also start to think about things like return on investment (ROI). If an HR tool uses automation but will only save you a few hours a month, is it worth paying for a subscription?
Will an HR tool make your business better?
When it comes to achieving a return on investment with your HR tool, this is a crucial consideration.
If you are starting to look for HR tech and aren't sure where the shortcomings are in your HR processes, you should put on the brakes. Conduct an HR audit to understand how you’re currently performing.
Then, when you know where you have the opportunity to improve, you can focus your search on the HR tech you know has the greatest potential to have the most significant impact.
- Your overall business and HR objectives.
- How HR tech will specifically improve your HR processes.
- How these improvements will facilitate the evolution of your HR team and wider business.
- The benefits and features of specific tools and how you would use them.
It's easy to find a fully-fledged ATS that can help manage your entire recruitment process, but if you'll only use one or two of the features, is that good value?
All in one HR tools vs. tools with integrations
Integrations are a significant selling point used across the software niche, not just in the HR tech space. Integrations can be a valuable benefit if you’re already using some HR tech tools and looking to add to your stack. Using integrations allows you to access all your data in one place without exporting and importing across tools.
However, if your business is new to using HR tech, and you’ve identified areas for improvement across your HR process, an all-in-one tool might be better. All-in-one tools, like KissFlow and Personio, can remove the need to worry about integrations with other HR tools. That said, you may still wish to integrate these with additional tools to align your HR processes with your broader business activities and aims. Choosing an all-in-one tool also means you don't need to build an HR tech "stack," but can rely on one tool for all your needs.
One vital consideration to remember is that specific HR functions may have unique needs. This factor may also influence whether you opt for an all-in-one tool or choose tools with a narrower focus on a particular component of HR.
Focus on the user experience HR tech tools provide
You will spend much time identifying the shortcomings in your HR processes and researching the best tech to address those.
However, if an HR tech tool doesn't provide an outstanding user experience, your fellow HR team members are unlikely to buy into using it. Even people skilled in dealing with change management may resist change themselves!
What an outstanding user experience looks like will depend on your needs. As a minimum, look out for tools:
- With attractive and intuitive dashboards.
- That are easy to use without the need to spend hours on training or tutorials.
- That provides easy to use data and reporting.
- That your teams will enjoy using because it’s clear how doing so makes them more effective.
The best way to achieve buy-in with HR tools is to involve your teams in choosing them. You might conduct the HR audit and initial research, but when it’s time for demos of tools, get as many people as possible on the call. As well as helping your team understand how these tools can help them, the questions they ask may open your eyes further to your teams’ needs.
What support do providers offer?
Your HR processes and performance will only be as good as the tools you choose and how effective you are at using your HR tech stack.
As part of your search for HR technology, place a premium on the support functions and ongoing training providers offer. Don’t take vendors’ websites by their word, either. They’re all going to say they provide exceptional ongoing support and training! Visit review sites like Software Advice and PC Mag to read real-world reviews from users.
Look to find HR tools from businesses with whom you want to build an ongoing relationship, and that will help develop your HR processes and overall business.
How to stay on top of developments in HR technology
The first way to do this is to take advantage of any training and events your HR tools providers offer. These will help you get the most out of your HR tech stack and ensure you're always able to maximize the use of any new features as they roll out.
It's also worth keeping an eye on the HR tools you thought about using but didn't. What new benefits and features are they adding? Are your tools still on par with those? You don't want to put yourself in a situation where you're changing the tools you use twice a year. Still, it never hurts to let your account managers and contacts know you're aware of the broader market!
Beyond this, blogs like HR Technologist and HR Tech News are excellent sources of news and developments. You might also consider attending events like the HR Technology Conference to learn more about future products in the HR tools space.
Choosing your HR technology stack
Using HR tech can have a profound and lasting impact on both your HR processes and your business. However, before jumping into building an HR tech stack, you must understand your HR processes' existing shortcomings and how you want HR tools to influence these.
Place a premium on understanding the ROI of HR tools. Ask yourself:
- What processes will using HR tools improve?
- How much time will using HR tech save my team members?
- How will we effectively redeploy these time savings into other HR tasks?
By answering those three questions, you’ll begin to paint a clear picture of how HR tools will change how you work.
Remember that the use of HR tools is an opportunity to reconnect with the foundational roles and functions of human resources. These tools will make it easier to manage recruitment and other processes, but you will always need to continue to drive rapport and relationship building, and connections across your team.